The plans combine life insurance with investment, making it a smart choice for parents worried about the future of their children.
However, what are these plans? What are its benefits?
What is a Child Insurance Plan?Most child insurance plans are traditional participating insurance plans. In these plans, you receive regular dividends in the form of bonuses while also receiving life cover. The plans are generally for a fixed duration, and bonus payments often start before the maturity. On maturity, the policyholder will receive all the accrued bonuses along with terminal bonuses if any.
In the unfortunate event of the death of the policyholder (parent), the nominee (child) will receive the death benefit, and the policy will continue to remain valid until the pre-fixed term. However, there will be no need to pay any premiums, and the assured payouts and bonuses will continue until maturity.
Benefits of Child Insurance PlanSome of the most significant advantages of a child insurance plan are as follows-
1.Life CoverThe biggest benefit of a child insurance plan is the life cover. The nominee of the policy will receive the death benefit in case of your demise within the policy tenure.
2.Regular Dividends/BonusesMany of the plans also declare reversionary bonuses which are added to the policy. On maturity, these accrued bonuses are paid to the policyholder.
3.Assured PayoutSome plans also come with the assured payout feature where the policyholder will start receiving assured payouts from the 5th year of when the premium payment term is over. You get to choose the percentage of the guaranteed sum that you'd like to receive as an assured payout.
4.Maturity BenefitOnce the policy matures, the policyholder receives the accrued bonuses as well as other bonuses if any. Some policies also allow you to take a loan against the surrender value of the policy.
Securing Your Child’s Future with a Child Insurance PlanFrom higher education in a foreign country, setting up their own business, to their lavish wedding, you need to always be there for your child to provide financial and emotional support. A child insurance plan can help you boost your savings while also offering life cover.
Know more about child insurance plans to understand their features better and select one that offers maximum benefits.
Secure your child's future with our Child Plans.
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.
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