Child Insurance

Benefits of Child Insurance:

There are ample of benefits offered by child insurance to the policy holder that makes it truly a beneficial point to ensure the financial security of your child. It helps you to create a sound funding for your child’s education, medical expenditure and works as a security blanket in case of your untimely demise. These insurance plans also works as a collateral for your child’s education loan and ultimately provides you two type of maturity benefit i.e., partial payouts after a certain duration of policy to meet the certain needs or lumpsum payout to meet the major expenditure.

Life Insurance/Assurance The prominent difference between the life insurance and assurance is that life insurance provides you benefits after the death of the policy holder but life assurance helps you to get a component of investment along with the death risk coverage. When investing in the child plan, one can get the benefit of both Insurance and assurance based on the individual need.

Policy period It refers to the period for which the policy holder has to pay the premium. The premium period depends upon insurance company to company which further depends upon the age of the child. In general, the policy term ranges from 5yrs to 20yrs. While buying a policy take into consideration the age around which your child will be self-independent.

Minimum Guranteed ReturnsDifferent plans offer different features to opt from. Some plans offer average minimum sum assured such as 1lac or 3 lacs whereas some allows minimum sum assured after several annual premium payments. For instance, The annual premium is of Rs 10000 and the sum assured is 10 or 5 or any particular pre-described times of the annual premium.

Part withdrawalsChild insurance comes with a distinctive feature which allows you to get the mid-policy benefit of withdrawing partial sum assured to meet your child’s development needs at the major turn of their life.

Death BenefitCompanies allow death benefit to the nominee (child insured) if the policy holder(parent) dies due to any unforeseen reason and even the future premiums will be waived off. In this way, the child will get the dual financial advantage, first at the time of the death of the policy holder and second at the time of maturity.

Critical illness Top-upIn case your child suffers from any unfortunate critical illness and the urgency of immediate funds arises, then at that time you don’t have to wait for the funds arrangement instead you will get immediate financial withdrawal for the case of medical expenditure.

Premium Waiver Benefit Top-up In this benefit, if in case the insured dies due to any unforeseen cause during the term of the plan then the nominee will be waived off the liabilities to pay the further premium and the rest of the premiums will be paid by the insurance company. The nominee will get the sum assured at the time of the demise of the insured and will get the fund value at the time of the maturity. Sometimes this feature is provided as a feature in the policy or can availed separately as a top-up/rider.

Maximum Sum AssuredAlthough there is no certain limit as per the industry standard to the maximum extent the sum assured can reach but certain plans keep an upper limit to around Rs 1 crore while others do not have any such restrictions.

Why invest in Child plans

Child plans are a gateway to secure your child's future and provide them with the freedom to have the opportunity to build their life as they want without being under any financial restrictions.

Educational benefits A thoroughly researched investment in child plans provides surety and security of funds for basic as well as a higher education which is the fundamental basis of their future.

Marital Management Marriage is another milestone after the education which requires huge funds. With proper management and prior planning, the marriage expenses can easily be managed.

• ✔ Secured future of your child
• ✔ Better education planning
• ✔ The parents passed away, kids future is secured
• ✔ Child’s marital funds are sorted
• ✔ A pool of fund to take care of child’s life.

Types of child plans

Every insurance provider offers the feature of child plans with the accessibility to customise them as per your own preference. There are still some general categories which differentiate between all the types on a broader level.

Continuous/Regular premium plan These premium plans offer premium frequency modulation as per the convenience of the policy buyer. They can choose any mode from quarterly, half-yearly or annually.

Lumpsum premium plan As the name suggests, here policy taker pays the whole premium of the policy in one part which eases their trouble of remembering and arranging funds after every few months. Even some insurers offer lucrative discounts on the premium as they get all the funds in one go.

Child ULIPs In this plan, a smaller part of the premium is invested in debt-based investments and the major part is invested in equity-based to attain higher returns. Although these plans are categorised under the highly risky kind of investment but the freedom insured have to decide where their funds should be allocated and where to avoid provides them a probability of earning higher returns.

Child Endowment PlansIn this plan, unlike ULIPs the insurance company decides in which debts based investments will be used as an instrument of investment. Since, the funds goes in debts based investments the overall risk and returns both are minimum. But these are considered safer investment options as compared to the equity and these als assure minimum returns.

Advantages of comparing Child Plan:

Every family has their set living standards and expectations of their future. Opting for a child plan depends on your demand for current and future financial requirements. We have created an easy platform for you to compare and choose the best deal out of all the plans out there.

Riders Available under Child Plans

Waiver of premium benefit- In case the insured dies during the policy term then this waiver allows the continuation of plan by waiving off the balance premium amount.

Accidental Death Benefit- In this rider, the child gets an additional rider sum assured if in case the parent dies in an accident.

Accidental Disability Benefit Rider (partial/permanent)- In this rider, the child gets a lumpsum amount equivalent to the rider sum assured if the parents suffers partial or permanent disability due to an unfortunate accident.

Critical Illness benefit- If in case, parent suffers from any critical illness then the child recives an additional rider sum assured. In this illness like heart attack, cancer, stroke, kidney failure etc. are included depending on illnesses mentioned in the terms of the policy. Generally, a small to large premium is charged for this depending on the age of the parent.

Income Benefit rider- The nominee (child) will receive every month 1% of the rider sum assured in case of

• 1. The death of their parents
• 2. Permanent disability of the parent because of an accident.
• 3. Critical illness caused to parents which is covered under the policy

Note: Additional small premium is charged by the insurance providers to avail the benefits of the riders.

Fund Planning before investing in child plans

Choosing the best plan out of the all requires thorough research, assessment of future needs and funds availability. Here are some tips to help you make the smart decision.

How we help?

Choosing the best plan out of the all requires thorough research, assessment of future needs and funds availability. Here are some tips to help you make the smart decision.

The common documents that are required by all insurance companies are:

• Yours And Your Child's Age Proof
• Latest Passport Size Photographs
• Relationship Proof
• Identity Proof
• Address Proof
• Income Proof
• And The Duly Filled Plan Proposal Form