Our children are our pride and joy. Becoming a parent not only brings boundless joy, but also a lifetime of responsibility. We want to give them the best, especially when it comes to their education and key future milestones. But with rising levels of inflation, cost of child education, medical expenses, and marriage expenses, the overall standard of living is highly affected.
To prepare against any kind of untoward eventuality, it is strongly recommended to make a timely investment for your child’s future. As parents, it is important to consistently save for the many milestones that your children might want to cross in their lifetime.
To tackle such growing needs, life insurance companies offer specific solutions for children. Children’s insurance plans equip you and your child for a variety of milestone needs and, if chosen well, they have the ability to make sure your child’s future plans process smoothly, with next to no hiccups.
Most of all, these plans make sure that unfortunate and unforeseen events do not derail the children’s future.
With numerous child plans available in the market, it can become difficult to choose a perfect plan that best meets your child’s needs. Following are a few tips that will help you make an informed decision in choosing the right insurance plan for your child.
1: Early Planning: Start planning your finances and investing in your child’s future as soon as they arrive. Maturity benefits are often part of child plans where the payouts are released at crucial life stages from 18 years onwards. And since child plans usually offer a long horizon to invest, you can build the corpus methodically.
2: Inflation estimation: Since all child plans are targeted for a mostly distant future, parents, when investing in a child plan, must understand that the funds will have to take into the future cost inflations. Doing so, would allow you to invest wisely and build a good corpus. It is also essential to know the time frames when you need to get the returns.
3: Premium Waiver Option: Choose a plan offering premium wavier benefit. This stipulation, which will either be available as an option or as an essential feature, will make sure the plan will continue, even after your death or your spouse’s death. Thus, this option ensures that the maturity benefit agreed upon for the policy term will remain intact as planned. Most child plans provide premium waiver either as an option or as a crucial feature in the plan.
4: Premium amount and payment mode: The premium amount will highly depend on the assured sum and the maturity amount preferred by the policy buyer. Estimate the total sum assured, that you would need at the time when the plan matures and invest accordingly. Knowing the different premium payment modes is also beneficial. Accordingly you can opt to pay premiums on annual basis, half-yearly or quarterly basis.
5: Stage appropriate: The insurance policy term which you choose should be according to the financial requirements of your child at different stages of his/her life.
Buying a child insurance plan is a significant step in securing your child’s future. We suggest you make it a high-involvement purchase by researching the products available and probing the features, benefits and terms & conditions.