help create a corpus for crucial stages in the child’s life
The utmost financial goal of any parents is to invest and save for their child's future. Children are the priciest possession of any parent. The child's joy, happiness and future mean a world to a parent. With educational costs sky rocketing and unexpected expenses at unexpected times, life comes packed with a lot of surprises. A happy and secure future of their child is each parent's responsibility.
Today, a parent can plan and secure a child's financial future using some incredible tools that are available. Child Insurance plans are one such. It plays a significant role in assuring the child a financial security when it comes to their future goals like higher education and marriage. Child insurance policies are nothing by life insurance policies that are created to cater to the financial requirements of a child when the need arises. By assessing when your child's academic or marriage need would arise you can choose a plan and an ideal goal based investing strategy that will mature right at the time when the goal materializes.
Child insurance not only benefits the child, but also the parents. To begin with, it gives sufficient time for a parent to plan out the finances over a prolonged period and totally relieves them of major financial burden at a crucial time when a lump sum amount is needed. Over the period, the parent will be able to save small amounts, enough to suit their pocket and in the meanwhile be Assured of a secure financial future for their beloved child. Technically, it is the parent/child's guardian who is essentially covered under a child insurance plan in the best interest of the child.
It basically works like this - if the parent dies within the Policy tenure, the child can live a safe and comfortable life with the financial assistance provided by the policy. If the parent survives the policy period, the Sum Assured by the insurance policy chosen will be automatically credited towards the child's education or marriage. It promises dual benefits of saving along with insurance.
A parent can purchase a policy soon after the child is born and can invest in it for a maximum of up to 30 years. It is applicable for any child below the age of 17. Usually, a maximum of Rs. 25,00,000 is the assured sum. A parent can avail a host of benefits if the Premium amount is properly paid for the first three years.
Child insurance plans in India have one other great advantage - in the case of a parent's death, the policy will continue till Maturity and the insurance company will pay all future premiums on behalf of the parent for the child. A parent just has to make sure that the policy they choose has a Waiver of premium rider availble.