HomeInsuranceChild Insurance Plans: Know All About Them

Child Insurance Plans: Know All About Them

Parents worry day and night about the future of their children. In an effort to ensure that their child gets the best of everything, parents go to lengths to secure their little ones financially. One of the key reasons to ensure financial stability is because it helps in adverse situations in life. If you too are a parent considering the purchase of a child insurance plan, know that it would be better to learn all about it in the first place.

What is a Child Insurance Plan?
A child insurance plan is an insurance solution that helps parents ensure that the future of their children is safe even in the most crucial stages of life, in case anything unfortunate takes place. In simple words, if anything goes worse, like the death of the parent, the Sum Assured under the policy is paid to the child. What’s best is that the policy continues without any interruption because the insurance company pays all the future premiums.

Key Benefits of Child Insurance Plans
Some of the key benefits of child insurance plans include:

1. It is the welfare of the child that matters the most in the case of child insurance plans. Most of the time parents have to compromise by picking a solution that does not deliver specific benefits to their children. However, in the case of a child insurance plan, it is not the same since child plans are specifically tailored to fulfill the expenses as and when they occur, thereby ensuring seamless coverage.

2. Insurance companies take over to ensure financial security of the child in case anything unforeseen takes place. For instance, in the event of the unfortunate death of parents, the insurance company offering the child plan continues to make payments on the policy, thereby ensuring long term security and benefits.

3. Child plans ensure protection of the child at all costs since they are discrete towards the interests of children, and least likely to get diluted/reallocated by the parent or by people managing the parent’s estate under unfortunate circumstances.

Major Limitations Under Child Insurance Plans
Some of the major limitations under child insurance plans include:

1. Child insurance plans are long term in nature and can vary between 10 to 20 years. It is alway a must for a parent to start early so that the complete potential of the plan can be fulfilled. A long term plan comes with significant features like lower premiums and higher returns at the time of pay-outs.

2. Child insurance plans come with restrictions on modifying the investment. This supreme feature gives the most benefit in cases when the market is volatile and you are unaffected with stable returns with minimal risks.

If you were confused between buying a child insurance plan or a standalone term policy, know that while a term plan may come at a cheaper price than a child plan, it may not serve your purpose in the case of protecting your children. While in case of a term plan, the policy will be terminated with the payment of the sum assured, the policy would continue and all the payment until maturity will be handled by the insurance company in case of a child insurance plan.

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