Secure your child’s future
Children’s insurance plans provide a security blanket for your child’s future. Lead a worry-free life with it…
Ruchi Saxena
Consider this: One morning you drop your child off to school on your way to work, and, you meet with a premature death. What will happen? Aside from the emotional trauma, your child’s future is now in someone else’s hand. How will he complete his education and reach all the milestones that both of you had dreamt of without financial support?
Worried? Well, you can heave a sigh of relief as you have the option to purchase child insurance, which enables you to secure your child’s future even if something untoward were to happen to you.
Why? Children’s life insurance plans are tailor-made to meet a parent’s financial responsibilities towards his or her children. These policies are ideal for meeting future education and marriage expenses as they deliver lump sums of money at pre-specified intervals. These intervals could be chosen to coincide with your child’s requirements.
Common plan options There are two popular options that are usually available under children’s insurance plans. Plain vanilla plans provide the sum assured on maturity or in case of your unfortunate demise during the term of the plan. The second option is unit linked insurance plans in which a part of the premium paid is invested on your behalf by the insurance company in a fund of your choice from their bouquet of fund offerings. Each fund offers different levels of exposure to instruments such as bank deposits, government securities, equities, etc. Based on the policy features on maturity, your child will receive the accumulated value of your fund or the sum assured or both.
Making the right choice With the plethora of children’s plans available, it has become a daunting task to choose one that is most suitable. Some aspects that you may consider while making the selection include:
Insure the earning member of the
family with the maturity/claim
benefits used for the benefit of the
child.
Policy should continue even after
the demise of the insured.
There should be a premium waver
for all the future payments after the death of the insured. The benefits receivable should take into account inflation. The plan should clearly earmark the fund for the use of the child at a target date for a particular purpose. Riders that can enhance the coverage at a marginal cost.
End Note Although no insurance plan can compensate for the loss of your life, children’s plans can enable your child to fulfil his/her dreams.
SUMMING UP Children’s insurance plans empower you to provide financial security to your child. Based on your requirements you can choose a plain vanilla plan or a unit linked plan. Consider various aspects before making the plan choice.
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