Is Having a Child Insurance Plan Really Worth the Cost? (1)

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Is Having a Child Insurance Plan Really Worth the
Cost?
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• When we talk about securing the future of our
  children, then a lot of investment instruments
  come in our mind in order to achieve the
  objective. As the upbringing of child is the
  major priority of every parent, it is important
  for every individual to do systematic planning in
  order to secure the future of the children.

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• In order to fulfill the parents intension about
  providing best facilities for their children,
  numerous insurance companies have come up with
  child insurance plans. But prior investing in
  these plans it is important to know that how much
  beneficial it is. Are they really worth investing
  in? What are the best investment options for your
  child? To help you get the answer of these
  questions here we have discussed in details about
  how benefit it is to have a child insurance plan.

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• Child insurance plans are investment cum
  insurance plans offered by insurance companies
  and are similar as endowment and ULIP plans.
  Although, these plans have one difference i.e.
  Unlike ULIP and endowment plans, the parents need
  to invest in the child plan right from the time
  the child is born. Unlike child insurance plan
  the insured person can withdraw the saved amount
  once the child reaches to his/her adulthood.

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• Like endowment and ULIP plan, in child plans a
  part of the premium paid goes towards paying the
  life coverage and the rest amount in invested in
  various investment instruments like equity, debt,
  etc. however, the portion deducted towards
  investment is very small, as the insurer deducts
  the premium allocation charge beforehand.
• Resulting this, a very few part of the premium is
  invested during the initial years of the policy.
  Moreover, if the insured choose an option for any
  additional features provided by the insurance
  company like switching option or waiver of
  premium then the charges for the same is also
  deducted from the invested amount. So, initially
  these plans offer very low return and even if the
  insured end the plan without completing the
  tenure of the policy he/she might end up facing a
  loss.

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One of the most important aspects of future
planning is to plan for uncertainties. As life is
uncertain, the parents should make sure that the
child should not have a financial crisis in case
of any eventuality. The insurance company offers
a premium waiver during the tenure of the policy
of a child plan if the insured passes away.
Another advantage of having a child plan is that
it protects the income of your children if they
start earning at a very young age.
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• A child insurance plan secures the educational
  future of the children. The child education plan
  offers the dual benefit of saving come
  protection. The plan is designed to offer
  financial security to the child so that their
  education may not hindered in the case of any
  unfortunate event in future. Child education plan
  provides 10 times more sum assured amount with
  the minimum premium payment option. The lump-sum
  amount paid on child education plan can be
  further used for education expenditure.

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Source https//www.policybazaar.com/life-insuranc
e/child-plans/articles/having-child-insurance-plan
-really-worth-the-cost/