A child plan is a sort of life insurance that aids in securing your child’s financial future. It guarantees that even if something unfortunate happens to the parents, the child will receive financial support from the insurance. A child insurance plan provides flexible payouts for significant turning points in your child’s life and gives life insurance. Additionally, some of the best child plans are created with the understanding that life is unpredictable. It aids in the development of a corpus, which will aid the parents in managing significant costs associated with children, such as higher education. Even sad occurrences like the sudden death of parents might be handled with the help of this corpus.
Let’s examine a few benefits of purchasing child policies.
Fund for Child’s Education:
A child insurance plan’s main goal is safeguarding your child’s future. The money that has accrued over time can be utilized for your child’s higher education or for significant occasions like a wedding. A child plan assists in addressing these needs while the price of pursuing higher education is steadily growing. As they provide benefits on the overall premium paid over the policy’s lifetime when it matures, the best kid insurance policies also account for inflation.
Medical Emergencies and Liquidity:
One benefit of a child plan is that it allows for partial withdrawal. Since the child is hospitalized due to an accident, illness, or other significant medical condition, the money can be withdrawn in an emergency. In a manner, child plans lessen the financial strain brought on by unexpected medical costs.
Offers Child Income Protection:
This benefit is especially for kids who start working young. It safeguards their income and offers the long-term benefit of capital growth for a child plan. This is primarily helpful for young musicians, performers, and actors. Collateral for Education Loan: The monthly savings would never be enough to meet the soaring cost of higher education, be it in India or abroad. Thus, arises the need for taking education loans. Child plans can help secure a loan for higher education as they are allowed to be used as collateral for a loan and other child-related borrowings.
Collateral for Education Loan:
Whether studying in India or abroad, the rising cost of higher education would never be covered by the monthly savings. Thus, the necessity for student loans arises. In addition, the ability to use child plans as collateral for loans and other borrowings related to children can aid in obtaining a loan for higher education.
Financial Support in the Absence of the Parent(s):
It is only natural for a child to be surprised and devastated in the event of the untimely death of one or both parents. In the event that the policyholder dies while the child plan’s policy is still in effect, insurance companies offer a premium waiver rider. The plan, however, does not stop at this point, nor does the insurance coverage expire. In these situations, the kid is entitled to the lump sum payment that was promised at the time the child insurance was purchased without having to pay the remaining premium. The rider allows the insurance to continue uninterrupted and places the onus of covering the remaining premium payments on the insurer.