Understanding Child Insurance Plans

 We are all aware of the value of education in our lives. So, as a parent, what plans have you put in place to ensure your children receive a high-quality education? If you are still unsure about saving for your children's future, child education plans in India can help. 

What Are Child Insurance Plans?

A child policy in India is an investment and insurance plan offered by insurance companies that provide financial security for your child's aspirations and goals. These financial instruments not only help to build a corpus to fulfil all of your child's financial needs, such as education, marriage, and so on but also function as a safety net in your absence. In addition, in the event of the policyholder's premature death, the company pays the remaining premium and ensures that the stipulated maturity amount is paid to the beneficiary. Continue reading if you want to learn more about some of the benefits and features of child plans in India. 

Features And Benefits

Some of the critical features and benefits of the investment plans for children are mentioned below.

• Flexible-Premium Payment

For premium payments, there are two basic alternatives. First, you can choose to pay in a lump sum at the start of the policy's term or in monthly, quarterly, six-monthly, or yearly instalments. 

• Segmented Pay-out

A policyholder can choose whether to get payment in a lump sum or yearly instalments with the suitable child plans in India. This type of arrangement supports the payment of dues such as college tuition, marriage expenses, further education expenses, appropriate money for beginning a business, and so on. 

• Premium Waiver Benefit

In case of the policyholder's untimely death, the sum assured is paid to the beneficiary while future premium payments are waived. The company makes these payments on behalf of the deceased, and the beneficiary receives the entire maturity amount after the policy matures. 

• Riders

With the insurance policy for children, specific riders are also available. There are three primary types: critical illness, waiver, accidental death, and disability. 

• Partial Withdrawal

In a financial emergency, a policyholder may make partial withdrawals from the plan. You can use child plan calculator to calculate your premium and be sure about your decision. 

• Tax Benefits

Every year, a policyholder is eligible for premium payment deductions of up to Rs 1.5 lakh. In addition, under Section 10(10D), maturity and partial withdrawals are tax-free. 

When and How To Buy The Right Child Plan?

A child plan is an investing strategy for the long run. The longer the money is invested, the better the returns will be. As a result, the most significant moment to begin investing in your child's education is when they are born. Because most financial support will be necessary throughout graduation and post-graduate studies, you should have collected a significant corpus by the time your child reaches the age of 18. To select the right child plan, follow the steps mentioned below.

• Step 1: Keep your goal in mind and the age you need the funds.
• Step 2: Investment options. You can select between the guaranteed and ULIPs.
• Step 3: Check the payout methods
• Step 4: Check the past performance of the fund
• Step5: Check the claim settlement and other ratios 

Based on the above parameters, you can select the child plan for education and marriage.

With unpredictable life events happening in front of our eyes, it is a brilliant idea to get a child plan. The plan not only functions as an investment vehicle, but it also secures your child's future even if you are not present.