Every parent’s ultimate desire is to give the best for their children. Dreams can range from small ones to great ones but the only aim of parents would be getting that dream fulfilled in the best possible way.
The most common wishes of a parent are to provide quality education, a suitable career, self-sufficient lifestyle, ideal wedding, business assistance and many more.
A comprehensive cover has to be chosen with Riders if required. The guaranteed returns can also be given consideration when the choice is made. The two forms of child plans available are the traditional child plans and the unit linked child plans. Individuals have to compare child plans and choose the one best suited for their children.
Indians are known to opt for such child plans as it is the best investment as well as a source for insurance. Both ULIPs and traditional child plans have their own advantages and disadvantages.
The aspect of charges with respect to ULIP has seen steadiness in the present scenario and have now been provided with zero allocation charges which have turned out to be a great merit.
On the other hand, the charges for traditional child plans are not known to the customers. Traditional plans are found to have lower life cover features and benefits when compared to ULIPs.
The life cover can increase based on the requirements of the individual but the premiums see a steady increase as well. The Assured sum along with the bonuses is only provided in such plans.
The death benefits in ULIPs are a sum of the value of the fund and the life cover. The unit-linked insurance plans are not suitable for securing family members. It is good for those who can shift their funds and handle all kinds of equity-based risks.
It is best for people to purchase the traditional plans if they are Risk averse and have less knowledge of the specific aspect. It can be easy for those who do not have the ability to manage funds. Partial withdrawal and switching between funds is the greatest advantage of ULIPs which is not possible in traditional plans.
Cancellation charges are made when ULIPs are surrendered but traditional plans have an immediate surrender value. Good returns are guaranteed if the Term is greater in ULIPs but otherwise guaranteed returns are seen in traditional plans without any dependency on market plans.
The question of which child plan is better than the other is a common question that arises in the mind of all first-timers. The above aspects can prove to be helpful in making the right choice.