Categorized | Child Insurance

child insurance-ulip or term plan

The market today is flooded with various types of child plans. Some are just pure protection Term plans; some are endowment plans; few are ULIPs with protection against gains and many are child health plans. The ideal child plan depends on what are your expectations. While some parents want security for their child against unforeseen eventuality of the working parents, few others look for investment plan for the future. Many parents look for education plans which would be used primarily to fund the child’s education at various stages when their child is studying.

Let’s compare child plans available in the market and find out which one is the ideally profitable and suitable for the child: ULIPs or term plans.

Term Plans

Many parents are still inclined to go for pure protection plans meant just for the children. In these plans, the nominees are the kids who get the benefits in case either of the parents dies during the Policy term period. Though, there may not be any Maturity benefit, it provides security against unfortunate death, low premium, and lucrative tax savings. Some parents look forward to term plans to keep their kids away from debt hassles, which can happen if the family takes loan or mortgages assets. The burden to repay the debt lies on the insurance company which provided the term plan while the kids are kept away from the hassle.
ULIPs

Working parents not only look for Risk cover in life insurance policies but also investment options. ULIPs provide high earnings, loyalty additions, risk cover, benefits against accidents, and lot more to the beneficiary. If you are looking for risk cover, flexibility in term period, Premium payment, guaranteed returns, as well as Loyalty Additions and Bonus points, ULIPs are often the ideal bet. If you buy a useful child plan from a profitable insurance provider, you would get bonus add-ons each year.

Although capital market swings in ULIPs often result in a loss, you can choose a child policy which has guaranteed protection on gains against the upheavals in the capital market. There are tax concessions on benefits, lucrative riders, premium Waiver rider, and many more customer-friendly options. But remember, most ULIPs are long term investment plans. These can be a serious problem in case there is a downslide in the economy and you want to shift your money to a safe and secured investment option.

Some child Health Insurance plans are ULIPs which help parents to fund expenses for treatments in case the child suffers from a Critical Illness disease and needs to be hospitalized. In case there is a prolonged treatment, the child health plans fund the entire course or provide lump sum benefit to the parent. Protect the future of the child.

The Ideal Child Plan

Although there is risk cover, low-premium payment, and security in term plans, they may be too little to fund the expenses of your child in the future in case your child requires going abroad for further studies or needs medical treatment for serious illness. Today, money back survival endowment child plans work wonders for parents who want to fund expenses for the child’s future education.

ULIP plans, such as contemporary child health plans or other child policies provide complete financial cover against any type of expenditure. In fact, special Riders are useful in case the parent dies during the policy term period. You also need not worry about the sum assured, premium payment, and term period as these options are often flexible.

If you are looking for security of your money, risk protection for your child, and tax relief you can pick a term plan for your child. An Endowment Plan would have money-back Survival Benefit as an added advantage. However, if you don’t mind taking calculated risks, useful ULIPs would help you to fulfill your child’s dream. In fact, ULIP-based child health insurance can be a novel way to save your child from unforeseen health snags.