Chances are that your child is the best gift you have ever received. Even though it can be challenging at times, you wouldn't give it up for a moment because they make your life worth living.
The thing that many people do not realize about having children is the fact that it is an expensive affair. The rising cost of education in India can be overwhelming to those with children or those who are thinking of having children. As they grow, education only gets more expensive. Children's needs do not stop at education. You must meet a lot of expectations as a parent, and this is forever increasing. Not to mention the expense in the unfortunate event of your child getting sick.
In India another large expense that all parents must deal with is the marriage of their children. Extravagant weddings are the social norm, and you will be pressurized into spending a small fortune on each wedding. So how do you deal with all these expenses and lead a comfortable life? Investing in a good Child Insurance is a good place to start.
Child Insurance is a plan that insures the life of a minor. It offers guaranteed growth of cash value. When the child is in their early twenties, some carriers may allow the amount to be withdrawn, which will collapse the policy. The policy will take care of all of the child's financial needs as she grows, even in the event of your untimely death. This is a possibility that you as a responsible parent must consider because as statistics show, on average, every 90 seconds, an Indian dies. Doesn't it sound like the right thing to do to make sure that your child receives all that you have promised even if you are not around to make it happen?
There are critics of child plans who argue that term plans are better than child insurance policies because on maturity they will receive a bigger corpus. However this does not account for the possibility that you as a parent dies after taking the plan. Sure a term plan will give a lump-sum for the immediate needs of the family, but the long term needs of the child will not be taken care of and further investments in the mutual fund will stop. Child plan, on the other hand, will not only pay the lump sum, but will also continue investing on behalf of the policyholder. Insurers believe the waiver of premium feature in a child plan is the key as it doesn't let the death of the policyholder affect the investment plan for the child.
Types of Child Insurance policies: Child Insurance policies come under the categories of linked and non-linked varieties.
Premiums: You also have flexibility when it comes to paying premiums. Policy holders can choose to pay the premium as a lump sum at the beginning of the policy tenure or periodically. You can choose between options such as monthly, quarterly, half-yearly or annual premium collection. You can even give standing instructions so that the premium will be directly credited from your bank account, so that you do not have to remember to pay another bill. How much premium you choose to pay depends on the sum assured and maturity that you go for.
Maturity: Make sure that you look ahead to the future when you chose the maturity period. Factors such as inflation and interest rates must be considered while deciding because you may find that the released funds at the end of the term may fall short of the requirements your child has in the future.
Tenure: Typically, child insurance is meant for children up to the age of 18 or 21. Specific plans do however have a higher age ceiling. You can choose a tenure from when your child is born until the child reaches a pre-defined age.
Riders: There are specific riders available with your typical Child Insurance that will give you the most out of your money. They come in three basic categories: critical illness, premium waiver and accidental death and disability.
Following are the main benefits of Child Insurance:
Have zero interest rate risk associated with cash value growth.
Following are some of the insurance companies that offer Child Insurance in India:
Credit Card:
Credit Score:
Personal Loan:
Home Loan:
Fixed Deposit:
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