Wednesday, November 30, 2022
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HomeFinanceHow to Choose the Right Insurance Plan for Your Child

How to Choose the Right Insurance Plan for Your Child

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Parenthood is a time in everyone’s life that revolves around a lot of organisation and future planning. One has to take into account all the needs of their children in order to make up an efficient plan for their future. This mainly involves financial planning and ensuring your child has the space to explore their passions and interests without being subject to financial constraints. This will require some very meticulously planned savings, which can be difficult without help. So, naturally, the smart decision would be to invest in a child policy.

A child policy requires you to make regular payments to the insurance company, who will pay out a lump sum amount at the end of the policy tenure. In case anything unfortunate were to happen to the policyholder during the policy tenure, the life cover amount will be paid out to the beneficiary. In any situation, the interests of your child will be well protected enough to ensure they lead a comfortable life with the amount paid out to them. Here’s how you can choose the right insurance plan for your child:

1. Look for Premium Waiver Benefits:

Premium waiver benefits are crucial when it comes to a child policy. In case of the policyholder’s death, a premium waiver ensures the sum assured isn’t put at risk. The company will waive off future premium payments and still continue to fund the policy to bring it to maturity. This will give the child the full amount along with the death benefit.

2. Consider All Aspects:

Choosing an insurance amount based on today’s costs might seem like the way to go, but in reality, this won’t cover your child’s costs. One must consider additional external aspects like inflation, rising education costs along with current expenditure to determine the ideal amount that will help your child lead a comfortable life.

3. Choose the Right Policy Term:

Many people tend to think about premium payments and make the wrong decision regarding policy tenure to get rid of premium payments as soon as possible. This, however, will work against the best interests of your child so consider their age before choosing a plan term along with considering their financial needs at different stages of life.

4. Don’t Settle on the First Plan You Come Across:

An insurance market is a vast place with multiple companies offering child policies to suit your needs. Make sure you have taken a look at plenty of them to get a good idea about how they work and compare different plans before finalising your decision on which one to purchase.

5. Payment Modes:

It is essential to know that when it comes to premium payments, you have multiple options like one-time payments, yearly, half-yearly and quarterly payments. If you have sufficient funds, opting for one-time payment is ideal as you will not have to worry about premiums again.

Keeping these things in mind, you can easily purchase the right child policy for a better future. Take a look at the plans available on ICICI to see whether they suit your needs!

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