An Introduction to Child Plans

By BankBazaar | January 24, 2016

Child Plans

What are Child Plans?

Child Plans are insurance plans that help parents save for their child’s future expenses. A Child Plan also offers Life Insurance cover on the parent’s life and ensures the financial security of the child in case of the parent’s demise.

How does a Child Plan work?

In a Child Plan, the parent is the insured person and the child is the beneficiary.

The idea behind a Child Plan

The idea behind a Child Plan is to protect the child’s future in case something were to happen to the parent. A Child Plan also helps the parents save for their child’s higher education and future expenses. Begin early and enjoy the benefits of compounding.

Is it an insurance plan or an investment plan?  

A Child Plan comes with a life cover and a Sum Assured amount is payable at maturity.

ULIP Child Plans

If you are looking for higher returns in order to take care of the rapidly mounting costs of higher education, you should think of opting for ULIP Child Plans.

In a ULIP Child Plan, the parent gets a life cover and the premiums are invested in funds that the parent chooses.

Plans that have no upfront premium distribution charges are also popular. Here, the total premium is invested in chosen funds and the scope for long-term returns is maximum.

More Flexibility

With child plans, you get added flexibility because you can withdraw funds through partial withdrawals. This allows the parent to access saved funds to cater to the child’s educational needs.

Death Benefit

In case of the parent’s demise before the maturity of the policy, a Child Plan offers a guaranteed lump sum amount that is paid to the child, with a fixed annual income for the remaining duration of the policy.

Additional Reading: Child Insurance Plans

Flexible Tenure and Tax Benefits

The parent can choose the tenure of the Child Plans and enjoy tax benefit up to a specific amount.

Waiver of premium option  

You can opt for a waiver of premium add-on which means that if the parent is no longer around, any future premium would be paid by the insurance company. Your Child Plan would be unaffected and a lump sum will be paid to your child on the maturity of the policy.

Life is uncertain. Don’t wait any longer. Secure your child’s future today.    

All information including news articles and blogs published on this website are strictly for general information purpose only. BankBazaar does not provide any warranty about the authenticity and accuracy of such information. BankBazaar will not be held responsible for any loss and/or damage that arises or is incurred by use of such information. Rates and offers as may be applicable at the time of applying for a product may vary from that mentioned above. Please visit www.bankbazaar.com for the latest rates/offers.

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