5 things you should keep in mind while buying a Child Insurance Plan

You, as parents are concerned about their future education and can sacrifice on their own leisure expenses, if need be, but do not want to compromise on their children’s future.

Buying a children plan ensures that your child’s future aims and ambitions are attained and will not be impacted financially due to any unforeseen circumstances. Below are the top 5 things you should keep in mind while buying a Child Insurance Plan.

• Education cost and Inflation

While deciding the sum assured, you should take into account the estimated future education cost and inflation. For example, an MBA today costs Rs.12-15 lacs in a premier institute. So, you need to take the cost 10 or 15 years down the line. Ideally, the sum assured should be over 10 times the current income of the policy holder.

• Tenure of the plan

Deciding the tenure of the policy is very crucial as it makes you plan things accordingly. Suppose, your child is of 8 years now, and you believe once he is 18 years, he will be sure of the field he wants to pursue his education. That will be the time you will need money to help him pursue his dreams. So, you can select a plan with 10 years maturity period.

If you ignore the link between age of the child and tenure of the plan, you might face a cash crunch as you will need funds before policy matures. The period of a policy should be decided as to when the child will attain 18 or 21 years of age.

• Partial withdrawals

Many a times, you would want to get the funds as and when required and not when the policy matures. You should look for partial withdrawals clause. Managing the education cost becomes much easier if you can withdraw money after a fixed interval.

• Riders in child insurance plans

A rider is an additional benefit provided to the existing plan. The insurance companies charges extra premium for adding a rider to the plan. Policy holder should know about the riders offered by the insurance companies as these riders enhance the procedure.

Some riders offered by insurance companies are:

Premium rider

These days, insurance companies offer child plan with inbuilt premium rider clause. In case of untimely death of

policy holder, the balance premium payments are waived off and the nominee is entitled to get the benefits after policy matures.

If you are buying a plan, it is advisable that you look in for the premium rider clause.

Death Rider

In case of untimely death of the plan holder, the nominee gets a lump sum amount from the insurance companies. This rider ensures that the procedure does not lapse due to unfortunate events.

Other riders available are income benefit, accidental benefit, critical ailments etc. Riders vary from companies to companies and the person proposing to buy a policy should be aware regarding the riders offered.

• Compare child plans online

Finding the best children plan as per your need is the easiest way to know about the various plans offered by insurance companies. It is convenient, paper less and hassle-free. You, also, have a customer assistance 24/7 that can help to sort all your queries. While comparing policy online, you will have to fill in personal details like the age of the parent and child, current income etc. Comparing and buying plans online helps you save the time of going to the insurance agent or the insurance company.Also, you can download the brochure of children plans from the insurance company’s website.

By now, you know the things to look in while buying a children plan. For the purpose of securing your child’s future, you should invest in a children plan which works as an insurance cum investment plan thus enabling your child’s dream turn into reality.