How to Compare the Features of Child Insurance Policy?

The main reason for purchasing a child insurance policy is to ensure that your children are financially secure even when you are not around. A child insurance plan has numerous advantages over other types of traditional investments for financing your child's future. Child insurance policies provide death benefit coverage, in which the insurer pays for the policyholder's child's upkeep in the event of the policyholder's death. In addition, some plans maintain kid insurance coverage and waive future costs in the event of such circumstances.

How to Compare the Features of Child Insurance Policy?

There are various important factors which you must consider while comparing different child plans. Once you understand these concepts, you can simply compare the characteristics of several child insurance policies using the following criteria:

Must Read: Step by Step Guide to Purchase the Right Child Life Insurance Plan

1. Policy Tenure

   When purchasing a child insurance policy, it is critical to consider the plan's duration. For example, if your child is eight years old, he will require at least eight to ten years to decide what sector of school he wants to follow. You will then require funds to support him in pursuing his aspirations and goals. Keeping this in mind, you should select a plan with a maturity term of at least 10 years.  As a result, it is critical to choose the policy term based on your child's current age.

2. Choice of Funds

   Funding Options It is critical to understand that kid insurance policies can be ULIP or endowment-based. If you invest in a ULIP-based child insurance plan, you may choose between equity, debt, hybrid, or equity, as the money is invested in stocks, which is somewhat riskier but gives better returns than endowment-based child policies. In endowment-based kid plans, the premium is allocated toward debt instruments, and the insurer pays according to the profit produced. As a result, be sure to choose a child plan based on your risk tolerance.

3. Premium Payout Options

   When evaluating child plans, make sure to take the insurer's premium payment choice into account. In some insurance policies, the premium must be paid in one lump amount at the time of the policy start. Furthermore, certain programs allow you to pay it regularly and regularly for a short time. Premium payments can be made monthly, quarterly, yearly, or semi-annually. So, compare the plans depending on the premium payment choice and the one that is most suitable for you.

4. Maturity Amount

   The maturity amount should be selected with the future in mind. Factors such as inflation and interest rates should be considered. It is critical to evaluate these elements to guarantee that the total does not fall short of meeting your future needs. As a result, you may review the policy language and compare it to other plans.

5. Riders

   It is one of the most significant elements to consider when making a comparison. There are special benefit riders available to supplement your life insurance coverage. Always look for rider advantages like premium waivers, accidental death, critical illness coverage, accidental death, and disability coverage. Check to see if the premium waiver is included in the basic plan or if it must be purchased as an add-on. 

Conclusion

Child insurance policies enable you to fulfill your ideal of not allowing unforeseen events to jeopardize your child's future. Once you are aware of the many elements of a child's education plan, you may compare them using the aforementioned criteria. This will save you a lot of time and money while also ensuring that your child has the finest insurance plan available. This will assist you in selecting the most appropriate plan to help you guarantee your child's future without financial problems.

Also Read: Why Consider Purchasing Child Life Insurance Plan?

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.