Child Insurance Plan

help create a corpus for crucial stages in the child’s life

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Are Child Plans Worth the Money?

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Every parent worries about his or her child’s future and wants the best for the little bundle of joy. This is the reason that parents start investing money with the help of different investment options in order to secure their child’s future. Some people even start these investment activities as soon as the child is born. Insurance companies have tried to cash in on this concern of parents and have floated child investment plans. Many parents have gotten attracted by these investment plans and started investing for the secure future of their child. The question is that will investing in these insurance plans actually result in a more secure future for your child? Is child insurance worth the money spent on it, or should you look for other options?

Let us understand what a child plan actually is:

A child Policy is similar to an endowment plan and is a smart combination of insurance and investment. These plans allow parents to begin investing money right at the time of birth of the child. The invested money can be withdrawn when the child reaches adulthood. Some companies allow you to withdraw money prematurely as well.

What is the amount of insurance involved?

The best child plan comes with an insurance component that is inbuilt and the child will get the sum Assured in case of the untimely death of the earning parent. However, according to experts it is necessary to have an insurance that pays 7-10 times the income of the earning parent to the spouse and the children in case of the death of the earning parent. Children’s insurance plans lay more emphasis on investment and less on insurance; hence you need to opt for an adequate amount of children’s insurance if you want to secure your child’s future in the event of your untimely death.

The investment involved in child plans:

The Premium is divided in such a way that part of it goes toward the insurance and part of it goes is invested in different instruments of investment like debts or equities.

However, in the initial years the amount that you get in terms of investment is quite less because several operational charges are deducted by the insurance company from the premium.

At the same time, you should make sure that you avoid stopping the plan prematurely because in this situation you will end up suffering a loss.

Again the amount that you invest in child plans should be adequate to meet the requirements that you have in mind in case of a mishap or even if you are just looking forward to such a plan as a means of investment.

Before opting for a particular plan you should make sure that you study the market and find out the different options available. The best way to compare child plan is to look for an online child plan. Different insurance companies providing child plans have their own websites which give complete details of the child plans that they offer. You can compare the plans offered by different companies and choose the one that suits your requirements the best.