help create a corpus for crucial stages in the child’s life
A comprehensive and judiciously done financial planning exercise has its own advantages as compared to one done in an ado manner. Why should the financial planning for your child be any different? With child insurance plans, you have the option of ensuring your child’s financial future is secure, since these plans are tailor made keeping in mind the long term benefits for children.
With growing financial awareness and rising inflation, more and more parents are today making use of child plans to safeguard the financial future of their children. Child insurance plans with their investment cum protection offerings come with a number of short and long term benefits for children. Some of the most prominent benefits of a child plan include the below.
A child plan ensures your child’s financial future is secure with payouts on maturity. The money thus accumulated over a period of time can be used towards higher education needs or other financial needs of your child.
Doing MBA from a reputed college in India today may cost anywhere between Rs. 15-20 Lakhs. By the time your child grows up, this cost may escalate to Rs. 25-30 Lakhs. Child plans take into account the inflation as they offer, on an average, benefit on total premium paid over the policy tenure on maturity.
Majority of the child plans in the market today offer periodic payouts as a prefixed percentage of the sum assured. With periodic payouts being planned at various stages of a child’s life, any short term or medium term financial needs can be fulfilled with ease.
As a parent, you will not have to worry about future premium payouts should you not be around at the time of premium payment. In the unfortunate event of demise of a parent, child plans come bundled with the feature of premium waiver as well as a lump sum death benefit offered to the surviving child at maturity.
Parents can choose the investment mix for a child plan between high risk equity investments and lower risk debt investments. Depending on the risk factor and financial needs, parents can either choose to regulate the investment mix either on their own or opt for an automatic mode keeping the safety of child’s financial corpus paramount.
Should your child need an education loan for higher education needs, your child plan can be used as a collateral security for the loan. Thus, with a child plan, you do not have to worry about offering a collateral security for education loan.