As future of the family, children are the core of attention. Not to be missed in the list of essentials is insurance cover for children. But how does child insurance qualify as a necessity. What age should children be insured. What are child insurance plans and what exactly is the need for providing insurance cover to children. Let us explore these questions today.
Catering for higher education and increasing costs
Lets face a fact. Higher education is expensive. Anything related to professional studies costs a lot of money. If there are plans for foreign education, be ready to have deep pockets. Such a scenario, parents start saving for children education early on. But there are other expenses to be taken care of. Plus inflation always eats into the secure investment avenues. Increasing costs also add on to the burden. Is there an option where you can save the same amount with a certain amount of risk and then get better returns on investment. The answer is a ULIP Child Insurance Plan.
How does a child ULIP plan work
ULIP is a combination of investment as well as insurance. Depending upon choice you can opt for high risk and high returns or secure investment with stable returns. Money is invested in the stock market in mid caps or large caps and debt instrument. There is also a choice between lumpsum payment or payouts at more than one intervals. Both policy duration can be chosen between 5 to 30 years and so is the premium payment. Premium payments can be made monthly or annually. This plan is like an online saving cum investment plan where you keep saving till 30 years and secure the future of your children. In case of untimely death of parents you will get the benefit of payout as well as continued monthly payments till the policy matures. The perfect plan to secure your children future till they are on their feet to earn on their own.
How does a child insurance plan work
If you do not want to risk investment but need just assured returns through insurance, go for a normal insurance policy. You pay regular premiums for the duration of the policy. At maturity, your child gets a regular payout at pre-decided intervals and bonus if applicable. In this case too if accidental or untimely death, your child gets the assured amount as death benefit as well as the maturity amount whenever due. Future premiums are paid by the insurance company.
Partial withdrawal – a great boon
Child insurance plans allow you to make partial withdrawals to take care of unforeseen circumstances. Terms and conditions for partial withdrawal are mentioned in the policy document and can be used to cover any contingency.
Child insurance ticks all the boxes at the right places. Some plans even have an assured monthly income to meet the expenses of your children till maturity. With the double benefits of investment as well as insurance, a child plan is the perfect investment option in your portfolio.