Becoming a parent brings boundless joy along with a responsibility of a lifetime. Children are the biggest pride and joy of their parents. Every parent wants to provide their kids with the best possible life, education, and guaranteed future. However, the constantly rising inflation, academic expenses, medical expenses, and living standard are most likely to affect the dream of parents. Hence, it is best to be prepared to keep up with rising expenses. Parents should follow timely investment strategies for securing future children. As a parent, you must constantly save to give your children a hassle-free life.
To keep up with the constantly rising needs Life Insurance agencies are offering tailor-made solutions for children. Best child education plan in India 2021 keeps you and your child prepared for the future milestones in life. If you choose the right set of policies then it can effectively ensure a smooth future without any hiccups. Most insurance policies guarantee that in case of an unforeseen event your children's life is not affected.
If you are out in the market looking for policies then the first step should be identifying your future objectives and their economic value. You should estimate the amount you wish to spend on your child's education and future. SBI child education plan calculator helps you in selecting the appropriate policy and premium amount.
After you have figured out the time frame you can consult with your financial planner or decide on your own on the best suited annual investment plan. Mainstream insurance plans offer a return of 6-10%. If you do not have a clear idea about these factors, finding the right plan for your child can be a difficult task. The following section of this article lists some of the steps that can guide you to make a more informed decision in choosing the right insurance plan.
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Child insurance plans are designed for the distant future. As a parent, you must understand the fact that investing in a child plan also takes into account future inflation. This approach is necessary for making wise investment decisions and building a sizable corpus. You must have a clear idea of the different time frames when you will require good returns.
Start planning and investing for your child's future right at the moment they arrive. Child plans mostly offer maturity benefits after 18 years. These insurance plans also give you considerably long horizons for investment. Therefore you can build a considerable corpus through small investments.
Selection of Payment Mode and Premium Amount
The premium amount is entirely dependent on the total sum assured and maturity amount selected by the policyholder. You need to make proper estimates on the total sum assured that will be necessary at the time of maturity. Start your investments following your financial objectives. As a policyholder, you should also be aware of the differences in premium due to different payment modes. Child insurance policies come with monthly, quarterly, half-yearly, or annual premium payment options.
Premium Waiver Option
Experts recommend selecting plans that offer premium waiver facilities. The benefits are available either as an option or as an inclusive benefit. You must ensure that the plan continues even after you or your spouse's death. Best child insurance plan in India 2020-2021 ensures that the maturity benefit remains constant. Child insurance policies mostly provide premium waiver facilities or the applicant chooses it as an option.
The term policy that you purchase should be sufficient for the financial requirement of your child at different stages of their life.
Insurance brokers recommend taking a child endowment plan if the risk appetite is low and the time frame is around 10 years. However, low returns are a major downside of these plans. On the other hand, you get cover against uncertain working conditions. Unit linked child plans are suitable for those with the moderate risk-taking ability and can afford to keep the money invested for more than ten years.
You must be careful at the time of evaluating the features of a child's plan. Children do not have any dependents hence buying plans on their name is not advisable. But still, if you wish to buy an insurance policy on your child's name look for additional benefits. Additional rider facilities protect the policyholder in the event of an unforeseen event. Purchasing an insurance plan for your child is a major step towards securing their future. Experts mostly recommended high involvement purchases. You should always purchase a plan after conducting extensive research of the different products and their features. Understand the benefits, and terms, and conditions of every plan before putting in your money. This article will help you in gaining comprehensive knowledge about the important factors to consider while purchasing and insurance for your child.
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