Child Insurance Plans in India| Why to take Child Insurance Plan?

Child Insurance plans are designed to cover the increasing expenses of your child’s education, capital for the new business, marriage, and other necessary expenses of the life. By taking this plan, you could secure your child’s future. In these plans, parents pay a specific amount of money (premium) to the insurance company on a regular interval. You could withdraw the amount of sum assured after a specific period of time (as described in the policy agreement) when your child reaches the adulthood.

You could decide about the Sum Assured , Maturity Age, Policy Term, Mode of Premium payment and Premium Waiver Benefit etc. You could choose to pay premiums regularly at yearly or half-yearly or quarterly basis.

Child plans are available in both traditional and Unit Linked Investment plans (ULIP).

In the Traditional child insurance plan money is invested in debt instruments. It provides guaranteed maturity returns to your child when he needs the financial support. It is less risky.

In ULIP Plan money is invested in both Share and debt markets. It contains higher risk but it could also keep the capacity to give higher return.

Why to take Child Insurance plan?

These plans help the parents

  • In Higher education of their child
  • By using the sum assured as the capital your child could start own business
  • In Marriage of your child
  • These insurance plans are also come with rider facility such as Waiver of Premium. If you take this rider, you don’t require to pay premium if you become disabled to pay it from any type of abnormal accident.
  • You could also choose to take maturity benefits at regular interval of time.
  • Tax benefit to the parents

Drawbacks:

  • Premium is higher than the term plan which provides the same life cover.
  • It gives less return in comparison to the term plan and the mutual fund.