If you have a little one to look after, concerns about their future, may at times, bother you. While you may be doing your best to ensure their present needs are met, there is no saying how many uncertainties tomorrow may bring. To create a sense of certainty around your child’s future, it is important to plan diligently today. A child insurance plan could help you accomplish this.
Child insurance plans usually offer a combination of savings and life coverage to ensure financial support during the crucial milestones of your child's life. However, at times, choosing the right plan can be difficult.
To help you select the right one, here’s a list of the different types of child insurance plans and some things to consider when choosing the one that best suits your needs.
Types of Child Insurance Plans
Before you buy a child investment plan, take a moment to understand the different types available. This choice is best made after an assessment of your requirements and a clear understanding of what the plan has to offer.
Child Unit-linked Insurance Plans (ULIPs)
Child ULIPs are dual benefit plans that combine market-linked returns with insurance. Along with life insurance coverage for the policyholder, maturity benefits through investments in financial instruments such as equity funds, debt funds, or balanced funds, are also offered. This type of child investment plan offers the potential for high returns, making it suitable for long-term goals (such as higher education).
Traditional Endowment Plans
An endowment policy is a traditional plan offering fixed returns along with life insurance coverage. These plans are less risky when compared to ULIPs, as the returns are usually not subject to market fluctuations. When the child endowment policy matures, the policyholder receives a lump sum amount, which can be used for the child's education or other significant expenses.
Child Money-Back Plans#
This type of child savings plan offers guaranteed payouts at specific intervals before maturity. These payouts can help fund the various expenses for your child, such as school admission fees or coaching fees. Depending on the plan, the remaining amount is paid at the end of the policy term, with bonuses when applicable.
Single-Premium Child Plans
In a single-premium child investment plan, you pay the entire premium amount upfront. This can help avoid the hassle of making periodic payments and ensure that the policy remains active throughout the term. It is a convenient option for those who have a lump sum amount to invest and want to secure their child's future without consistent payments.
Regular Premium Child Plans
This type of child insurance plan requires you to pay premiums at regular intervals, whether it be monthly, quarterly, or annually. Regular premium plans are usually more manageable as you can pay premiums at an affordable rate at regular intervals.
Child Insurance Plan: Factors to Consider When Choosing One
Are you wondering which is the right child plan to secure your little one’s future? Here are some factors to consider:
Financial Goals
Determine the specific goals you want to achieve with the child plan and the investments you seek to create for your little one. Do you want to fund their higher education, their marriage, or help them start a business? Getting the answers to these questions will help you choose a plan that aligns with your financial needs.
Risk Appetite
Ask yourself how much risk you can tolerate. If you are comfortable with market fluctuations and are seeking higher returns, a child ULIP might be suitable. On the other hand, if you prefer stability and fixed returns, a child endowment policy would be better.
Budget for Premiums
If you can afford a lump sum payment, a single-premium plan can be a convenient option. If you prefer spreading payments over time, opt for a regular premium plan fitting your budget. Make use of a child education calculator and other similar tools to know how much you would need to invest for your goal and what the overall cost will be.
Additional Features#
Consider other factors such as flexibility or liquidity. For instance, if you have opted for a child ULIP, look for free fund switches. Check how soon you can partially withdraw the funds. Regardless of the type of child insurance plan you choose, look for premium waivers, riders, and bonuses that can add to the plan’s overall value.
Specific Needs
If you have specific needs, look for plans offering additional benefits to suit those. For instance, if you are looking for investment plans for a girl child, you can consider government schemes designed for the purpose. While these schemes have the backup of the government, they may not offer life insurance coverage.
When you have a little one, you must consider several factors before you buy a life insurance policy. Taking their needs and future into consideration is important. Whether you opt for a ULIP, an endowment policy, or a money-back plan, make sure it aligns with your goals and provides the necessary protection and growth for your child's future.
#Bonus rate may vary from time to time based on Company’s Investment Performance.
Customers 
Distributor 
Partner with Us 
Employee 
