Congratulations! You are gifted with an adorable baby. You are surely filled with happiness by the coming of this bundle of joy. Amidst all this, it is also very important to not forget your responsibility. The responsibility of presenting your child with a better future and be well prepared for the ever soaring education cost.
Before you begin your hunt for the best child plan in India, let us help you understand the different types of child insurance plans.
Single Premium Plans
As the name suggests, the buyer has to pay a lump sum amount when buying this policy. There are no quarterly or annually premiums incurred from the buyer.
Regular Premium Plans
Under this plan the buyer of the policy is bound to pay the premium annually until the child becomes 18 years old. This amount is later paid back to the insurer over a time period of 4 years. This policy also comes with a cover for the parents. For instance, in case of the parent’s death before maturity, the insurance company takes care of the premiums and gives the child the sum assured. It also comes with the feasibility to take out your money at any moment.
Endowment plans entirely depend on the performance of the insurance company. The profits earned by the insurance company directly affect the value of your funds. It is however advised to not expect much from these policies. There are many financial institutions offering this plan, for instance SBI child plan, ICICI Prudential child plan, children plans from AEGON Religare etc.
Child ULIPs (Unit Linked Insurance Plans)
Child ULIPs take advantage of equity investment. The longer time you stick to them, the more you are likely to lower the risk involved with them. Higher entry charges are incurred for purchasing these plans. The value of the money invested, ascends as the time passes by. These plans also yield better returns.