As adults, we understand that doing a bit of financial planning beforehand is a smart thing to do. We do that for ourselves and our family by purchasing general and life insurance plans, to provide them with financial overage and security. However, not many people understand the importance of securing financial coverage to children from a young age itself. Their financial future can be taken care of easily with separate child insurance plans, which are tailor-made for children and cater to their future needs. If you are a parent of a young child and are still uncertain to invest in a child plan early on in your child’s life, then read ahead to know all the benefits of child plans:
Financial net for your child’s future and education
With the payouts you receive in maturity, a child plan ensures that the educational future of your young one is secured. The money will be accumulated by the time he/she grows up and needs it for his/her education. The unique thing about child plans is that they also take into consideration the market inflation, and they offer the advantage of total premium paid over the tenure on maturity.
Child plans in India give you the flexibility to choose between high-risk equity and low-risk investments. You can choose any combination of child plan that you think is most suitable for your child and your personal financial needs, taking into account the risk factor as well. As a parent, you can also regulate your own investment combination or else choose an automatic mode.
Security in times of need
The worst fear of any parent is passing away without securing their child’s future. However, even in the worst-case possibility when you are not around, a child plan will help secure your offspring with the premium feature waiver, along with the lump-sum death benefit at maturity. So you do not have to worry about future premium payment, even in any unfortunate, unforeseeable incident.
The child plan can also act like a child education plan if your child needs an education loan for his/her higher education in the future. You can simply use the child plan as collateral security for the education loan. Moreover, child plans also offer period payouts as a prefixed percentage of the sum assured (you can calculate this using the child plan calculator). So you can plan the payouts at different stages of your child’s life, for their short-term or long-term financial needs, such as managing school and tuition fees for your child.
If your child is a talented actor, singer, etc., and he/she starts earning at a young age, then a child plan will also act as a tool for income protection, and ensure that the financial security is covered even in this kind of situation.
These are the various advantages of child plans in India. Start planning for the financial future of your child, so that they reap the benefits even when you are not around to take care of them. After all, your child deserves the best.