A wise mother had once said. “Your child will keep building castles in the air; you better start buying bricks for the castle today”. This is one of the most popular sayings indicating the importance of future planning that a parent must do to secure a child’s future.
Child insurance policies and plans are absolutely essential to ensure the financial security as well as health of a child. These policies or plans are often coupled with investment at times and are attractive options to parents seeking financial security for their children. These are permanent life insurance policies which insure the life of the minor and also serve as a very important means to protect a family against any sudden or unexpected cost that may arise in case of a child’s funeral or burial.
These insurance cum investment plans serve two purposes, one is to financially secure the child’s future and the second is to finance any turning points in his/her life such as for higher/further education or even marriage.
Child insurance plans are popular insurance-cum-investment plans that are offered by insurance companies. These are very similar to ULIP’s and provide a number of benefits such as waiver of premium, etc. ULIP’s are basically investment cum insurance products which are known to be a very popular amongst insurance buyers.
The early years of a child’s life are usually the most important and critical years of growth. These are the years when a child learns life skills and most importantly is educated. The importance of education is enormous in a child’s life and may begin as early as 1 or 2 years old when he first learns how to talk. School is the first place where a child receives formal education and parents may start saving for this right from the time when the child is born.
Child education plans are those insurance plans which provide all the benefits of life cover and build up a corpus of for the future needs of the child.
While buying such policies it is always important to compare quotes from different companies as the rates may differ depending on the interest rates as well as the service charges, etc.
Although these plans are beneficial in their own way and provide tax benefits, a person can get the same tax benefits by availing for a term insurance as well as mutual funds. Also, term insurance policies as well as mutual funds are known to be cheaper than the cost of children’s plans.