Importance of Child Insurance Plans

As a parent, it is one of your primary responsibilities to provide the best of everything to your beloved child. While many parents in India may be aware of the child insurance plans, not many people know about its benefits, and consider it as an unnecessary investment.As the name suggests, child insurance is an insurance-cum-savings financial product meant for the children; it safeguards your child’s future even in your absence. If you are deliberating whether to buy child insurance nor not, here are five reasons that will convince you that you should.

• Helps Take Care of Child’s Education The education cost in India is rising every year. In a survey conducted by ET (Economic Times) Wealth, nearly 60% of the respondents who took the survey said that children’s education is one of their biggest worries. While all parents hope to provide the best education to their children, not everyone can afford it.One of the best ways to ensure that you give your child quality education is to plan your finances well and invest in a child insurance plan that matures when your child attains a certain age and is ready to pursue higher education.
• Helps develop the habit of saving The child insurance plans provide a dual benefit of insurance and investment. Before you purchase a childcare plan, you should review your financial policy and calculate how many funds you may need during your child’s life. Calculate how much savings you have and if it is enough for important milestones like primary education, college, etc.It will help if you also consider other responsibilities like home loans and choose the right insurance policy that fits your financial plan. While it may initially seem a burden to pay the premium, soon you will get into the habit of regular savings, and it will hold you in good stead when your child grows up.
• Protection against medical emergencies If you have a family history of a critical illness like cancer, it is better to purchase a child insurance plan when your kid is young and healthy. In the later years, if your child falls prey to any such diseases, apart from the health insurance, the money invested in childcare insurance will come in handy to meet the medical expenses.
• Collateral for loan Today many lenders in India accept insurance plans as collateral if you wish to apply for an education loan or a personal loan for your child. This will greatly help you get your child the necessary funds when the need arises.
• Death benefit In the unfortunate event of your demise before the policy maturity, the appointed beneficiary (your child) receives the death benefit in a lump sum payment.

Final Word From the benefits mentioned above, it is evident that child insurance policy can help you secure your child’s financial future before it is too late.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.