All you need to know about child insurance plans

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All you need to know about child insurance plans
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• As a parent, your child is your biggest
  responsibility and you always want the best for
  your child. While you are aware about child
  insurance plans in theory, it has been found
  parents typically have misconceptions about the
  benefits they offer. For a starter, child
  insurance plans are basically insurance-cum-invest
  ment products that protect your childs future in
  your absence. These plans offer a death cover and
  ensure you save for your childs key milestones
  including higher education and marriage.

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Myth 1 Your childs life is covered in a Child
Insurance plan

• Reality Typically, parents are covered in a
  Child Insurance plan and the child is the
  beneficiary in case of an unforeseen event or
  untimely death of the parent(s).Buying a child
  insurance plan helps meet the increasing
  educational and other needs of your child. A
  child plan acts as a financial support when your
  child accomplishes various life stages such as
  primary and higher education, starting business
  or even marriage.

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Myth 2 Your child will have to pay the premium
in case of your sudden death

• Reality In the event of your sudden death, your
  insurer will pay a lump-sum amount to the nominee
  that can be utilised for meeting your childs
  future requirements. Typically, this policy does
  not get discontinued in the event of parents
  sudden death. Most insurers offer waiver of
  premium rider at the time of buying the policy
  and your child wont be required to pay any
  future premium in your absence. Instead, your
  insurer would take care of future premiums on the
  behalf of your child.

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Myth 3 Payments are made only if your child goes
for higher education and if marriage happens

• Reality If your child does not wish to pursue
  further studies or intend to not get married
  sooner, your child can still make a claim. The
  objective of a child plan is to secure your
  childs future by making funds available at the
  due date. Therefore, irrespective of the goal the
  money was tied to, the claim can still be made
  when the term of the policy ends.

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Myth 4 You can avail the payout only at the end
of the plan

• Reality You do not have to wait till end of the
  plan to avail the payout. In fact, Child ULIPs
  allow withdrawing a certain percentage of the
  fund value after completion of 5 years from the
  date of commencement. In the event of your sudden
  death, your insurer will discontinue the ULIP and
  pay the funds to your child.

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Myth 5 Your child insurance plan serves only to
insure.

• Your child insurance plan also serves as an
  investment tool. By investing in a child plan at
  an early age, you get optimal returns that may
  come handy as and when need arises. Opting for
  the unit-linked insurance plan would help the
  money grow over a period of time as your child
  would not require any immediate funds.
• Buy a child insurance plan when you think its
  the time, be it the day when your child is born
  or when your child steps into school. The sooner
  you start investing, the better your returns will
  be in the long-term.

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Sourcehttp//www.financialexpress.com/industry/ba
nking-finance/all-you-need-to-know-about-child-ins
urance-plans/186794/