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Child Plans, A typical Child Education Plan offers the combined benefits of savings and protection for the child. There are both Unit-linked and Endowment insurance plans that help the parents in building a corpus over a period of time for the financial security of the child. These plans are normally taken by the parents on behalf of their children, to ensure that there is both life insurance taken on the parent’s life (to ensure that in case of the unfortunate demise of the parent, the child’s education continues unhindered) as well as an opportunity to create an investment for the child’s future financial requirements like higher
education and marriage. Hence in summary, if a parent wants to financially secure the future of their children and also fund a major event in the child’s life then one must certainly purchase a child insurance plan.
Benefits of a Child Plan
As we had seen earlier, children’s plans offers a range of relevant and unique coverages to the policyholder (parent). It is a policy plan that every parent should plan to invest in, in the interest of the financial well being of their child, in terms of higher education, financial stability with a corpus to build on and finally their marriage and coms most handy in the case of the unfortunate demise of the policy holder. Some of the key benefits of the Child’s Plan include:
How to Purchase an Endowment Plan?
Types of Child Plans
As is the case with most other life insurance products/plans, there are different types of Child Plans in India which are:
|Type of Plan||Benefit/Coverage|
|Single Premium Child Plan||The policyholder pays a lump sum single premium for the entire policy term and stays invested for the full term. Such a one time payment could also attract some discounts from the insurer.|
|Regular Premium Child Plan||As is the case with most life insurance policies in the market, regular premium child policy offers periodicity flexibility on payment of premium by allowing the policy holder to pay premium monthly, quarterly, half-yearly, or yearly.|
|Child ULIP||Child ULIP plan gives additional benefits of investment/life coverage apart from tax savings. Benefits includes payment of sum assured on the demise of the insured parent/guardian/policyholder while future premiums are waived off. Also maturity amount is paid when the policy matures, creating a necessary corpus for future expenses.|
|Traditional Child Endowment Plan||Here, the premiums are invested in lower earning debt instruments and the bonus payable at maturity|