Parenthood is bliss. The joy of holding your baby in your arms is incomparable. As you bring home the tiniest member of your family, there comes a huge set of responsibilities and duties as a parent. Parents get anxious not just about the new routine but also about the future well-being of their child. And since financial care often tops the concern list, it’s best to invest in a child plan.
An integral part of any parental journey, let’s understand what child plans are.
They are life insurance cum child investment plans to offer financial security to your child and to provide financial assistance at key milestones in your child’s life, such as schooling, higher education, marriage, etc. With the ever-growing expenditures, it’s impractical to depend on your regular income to meet the varying needs and demands of your child. It is therefore recommended to get into the practice of saving early and building a corpus to achieve goals that may otherwise seem impossible.
A child plan offers the dual benefit of investment and life insurance. And the pay-out is at least ten times greater than the premium amount you pay. Here are the various long-term and short-term benefits that you can avail-
- Save for your child’s education: This is a primary benefit offered by most child plans. Since the payout is quite high, it can easily cover your child’s education fee, be it for college studies or for an overseas education program.
- A backup in your absence: Life is uncertain but the repercussions of an unfortunate event can be minimized by investing in a child plan. In case of unfortunate demise of the policyholder, the certain child insurance plans will offer a premium waiver for the rest of the policy amount and yet the beneficiary (which is the child) will receive the complete payout as promised at the time of buying the policy.
- Serve as collateral: Higher education, especially if you are looking forward to an overseas program, is extremely expensive. If you consider taking up an education loan to meet the requirements, child plans with savings component can be used as collateral. Alternatively, they can be used as collateral for any other child-related borrowings.
- Medical emergencies: Though most people invest in health insurance plans to meet medical emergencies, a child plan certainly serves as an add-on. Child investment plans come with a special provision whereby you can withdraw partial amounts from the yet-to-mature policy if your child were to be hospitalized due to an accident or any other severe medical condition.
In a nutshell, any child plan offers you dual perks – One is to protect your child’s future in case of your unfortunate demise, and the other is to help you gradually build up a corpus to fund essential requirements of your child as she grows. The policy can be purchased for a child as young as 14 days and the term ranges anywhere between 15-25 years.