As a parent, you might be constantly worried about securing your children’s future. However, due to multiple risks and market instability, you might only be able to come up with certain investments to offer your child in the future. An insurance policy is an ideal option for investing money. By purchasing a child insurance policy, you can conveniently secure your kids’ financial future, irrespective of any unfortunate incident
Understanding of Child Insurance Plan
A child insurance plan is an insurance policy created to secure the financial future of children. Usually, these plans come with an age range of 5–12 years, and you can only purchase a child insurance policy if your child’s age falls within this range. Hence, before you purchase any insurance plan, ensure that you compare and verify the multiple plans available in the market to make a wise decision and get your hands on the maximum coverage with the lowest amount.
Top Features To Consider In a Child Insurance Plan
The procedure for getting a child insurance policy is quite simple, and you only require certain documents. However, there are multiple important factors that you must know before you purchase a child insurance policy. Some of the most important factors of a child insurance policy to be acknowledged before purchasing one are given below:
Low Premium
Low premium is one of the most attractive features of any child insurance policy. These policies come with a low premium amount, even though the insured money is high. The low premium is due to the child-focused nature of these plans. As there are many subsidies for child insurance policies, the premium amount eventually decreases.
Health or Life Cover
Life coverage is a mandatory feature in every child’s insurance policy. When considering a child insurance plan, you must prefer high coverage by giving a higher premium. You can also prefer any child insurance policy that is accompanied by multiple health benefits.
Assured Return On Investment
The major issue of investing in high-return investments is they do not offer an assurance on your capital, let alone the returns. As maximum returns are generated because of the volatility of the market, there is no assurance for capital investment. Hence, consider a child insurance plan that comes with a guaranteed return on investment.
Long-Term Investment
Usually, your child will need money once they are 18 or above. Hence, many financial advisors advise investing as soon as possible in a child insurance plan for the purposes of child education planning, to gain the benefits of lower premiums and higher returns. By following this advice, you will enjoy a long investment duration, eventually resulting in higher returns due to capital and interest compounding.
Future Investment
Many people utilise child insurance plans to invest in the future of their children. They invest a good amount of money when the child is young to collect enough money for the future. Parents can also use this money on their children’s major occasions, such as marriage or studies abroad.
Tax Savings On Returns And Premiums
Another major feature of child insurance policies is that the government provides tax exemptions to the policy payer to invest in child insurance. Moreover, the returns that you receive on the maturity date of the child insurance policy come with tax exemption, offering you tax-free returns and tax-free premiums from the same child insurance policy.
However, you must remember that tax deductions are made according to the present tax laws that might change from time to time.
Inflation Rate and Child Education Planning
When considering the amount you need to accumulate for the secured future of your child, you must also calculate the cost of your child’s education according to the inflation rate. Hence, considering the present inflation rate, you must calculate the amount your child might need for their future education, which is 10 to 15 years ahead of now. You can also select the best child education plan for your children’s education.
In-Depth Comparison Of Child Insurance Plans
To select the best and most beneficial child insurance plan, ensure that the multiple plans available online are carefully compared. The process is paperless, seamless, hassle-free and convenient. Multiple sites offer 24×7 assistance to clear all your apprehensions and doubts. Hence, carefully compare and then purchase a policy that saves you time and helps you secure your future along with multiple benefits.
Summing Up
As responsible parents, you must purchase a comprehensive child insurance policy for your children. These plans let you stay worry-free about the financial security of your children. Now that you have acknowledged all the major features to check in before availing a child insurance plan, you can select one wisely.
FAQ on Child Insurance Plan
1. What is the main use of a child insurance policy?
Insurance policy focuses on offering financial assistance to your child in your absence. Its main focus is to minimise your financial burden for the future of your children.
2. Is it wise to invest in a child insurance plan?
Yes, as with the correct investment plan, you can secure the financial future of your children and ensure that you have saved enough money for them even in your absence.
3. Should I prefer a health insurance policy or a child insurance policy for my child?
You can prefer a child insurance policy that comes with health benefits to make yourself aware of both features.
ThePrint BrandStand content is a paid-for, sponsored article. Journalists of ThePrint are not involved in reporting or writing it.