With rising cost of living, it has become imperative for parents to plan for the future needs of their child at the earliest. Many parents start with the planning task when the child is in the womb. This helps them take care of any certain or unforeseen financial burden with ease without compromising on the interest of their child.
Child insurance is one such option that helps you in planning and securing your child future at any time. There are a number of insurance companies offering policies to suit your child’s growing needs. Child insurance is a great option because taking out a small amount of premium from your monthly or annual income will not affect your other needs, and you won’t even come to know how conveniently you collected a pool of money for your child’s benefit.
A number of benefits are covered under this type of insurance. For example, education, health, medicine, and marriage are the common ones. However, generally one has to take a separate policy for each benefit. Every policy has different terms and conditions suiting different customer needs.
Some policies provide a guaranteed amount of lump sum money at the end of the policy tenure. They are commonly known as child endowment policies. Similarly, child money back policies work like an income plan where at periodic intervals guaranteed or non-guaranteed amount of money is paid to the insurance holder to help him meet various demands like admission fees, coaching classes, etc. from time-to-time. These days Unit Linked Insurance Plan (ULIP) has become popular. They are high-risk and high-return plans normally taken for a long tenure.
Every policy has a different growth rate that varies directly with the level of market risk involved. Policies with guaranteed returns, for instance, are less growth-oriented than the ones with varying returns like ULIP. Some of the policies also have a security feature according to which an assured sum of money decided in advance is payable in the event of the unfortunate death of the parent. Moreover, all future premiums are waived off.
You can take a policy depending upon your desired policy tenure, amount of premium, and the benefits covered. As there is a cut-throat competition among all the insurance companies, you can get the best deal for your child. The health of a child is covered under medical insurance. You can contact your nearest insurance agent to get more details on child insurance.