How does a Child Plan work?

In a child insurance plan, the parent’s life in insured in the interest of the child. This means that if anything happens to the parent, the policy will pay for the future expenses of the child and make sure her education costs are paid for. This is a very important and useful type of insurance and every person living in today’s modern day, where expenses outweigh incomes, must have. A child plan not only gives your child security in your absence, it also assists you to fulfill each and every dream of your child. Read on to know how exactly a child plan works.

What are the basic features of a child plan?

The basic features of a child plan are:

  1. Helps to start saving early – A child plan can be bought as soon as the child turns 3 months old. As a result, you the parent get ample time to build up a healthy fund for the child’s education, marriage, etc. You can simply save in small amounts for a long time and when you need the funds can have a hefty lump sum amount with you.

 

  1. Opt for a money back plan – Child plans can be converted into money back plans to help you and the child in various points in life. For example, you can opt to receive 5% of the sum assured when the child joins school, 20% at the time of her college admission and 50% at the time of her marriage. Such inflows of cash help you in meeting the demanding financial requirements when they arise.

 

  1. Security in your absence – If you pay the premiums on time for the first 3 years, your fund is secured and even if you happen to die thereafter, your child’s future will be safe. The fund would continue to grow but the premium would be waived off and the child would receive all the monetary assistance you wanted her to.

Will a child plan be of help to me?

The way the child plans are designed, it helps almost every parent in every situation. A child plan works not only to secure the child’s future, but also to lessen the financial burden of the parents. Since it’s a long term investment, you have the flexibility to choose how much you want to save and for how long. You can pay as per your capabilities and still build up a healthy fund. If you plan wisely and opt for a money back plan, every milestone of your child’s life, till the time she is financially independent, will be smooth, happy and memorable for you and for her. So yes, child plans definitely help all parents equally.