Why you need to have a child insurance policy?

Giving best to your loved ones, perhaps, is the utmost pleasure for all of us. Be it education, living standard or anything else, you assure that your family gets the best. You want to give your kid a bright future and you have to depend on private schools/colleges because of the poor education system and infrastructure of the government sponsored educational institutions.

A recent study has revealed that financial security of kids is the most terrifying worry for most parents. Over 60 % of respondents told that the biggest worry is the rising cost of education in India. And this does not include the untimely death of the bread winner, the worst situation. The fear of meeting an unfortunate incidents and losing sole earner of the family life is another terrifying worry.

According to the NCRB (National Crime Records Bureau) statistics, an Indian dies after every 90 seconds in an accident. Isn’t it horrible?  Even a thought of leaving your child unprotected, no assurance of their education or not sufficient bucks for their important milestones of lives, could troubles you.

What will happen to your child if you’re not around? Who’ll stand behind them? I think – no one, but a child insurance plan will. A child insurance plan of adequate cover can help you get rid of this worry.  It not only pays out a lump-sum amount at the death of the life insured, but it also continues paying your kids at different milestones of their lives even if you’re not around.

Person next to your door may have some reasoning of not buying child plan-it costs more than a term plan. Of course, a child plan of equal sum assured is more expensive than that of a term plan. But a term insurance policy pays out only when the life insured dies, while a child insurance policy pays at the different stages of child’s life even if the policyholder survives. And the best part of child plan is that – it remains enforced even after the demise of the life insured. After the demise of life insured, the premiums for entire policy period is waived off. The insurer takes the onus of paying premium on behalf of the policyholder, and it pays out all the benefits under the policy.

In addition, a child insurance plan makes sure you invest continuously making big corpus for your kids. A child plan is designed in such a way that it could fulfil all the financial needs of your children, whereas a unit-linked plan (ULIP) terminates paying lump-sum amount to the nominee after the death of the person insured.

Read our article “Top 10 Child Insurance Plans” for understanding more about Child insurance.

The basic objective of a child insurance policy is even after the early demise of the parents, child’s important milestones of his/her life be it higher education, marriage, business, home or any other financial needs should not be hindered. It covers the financial needs of children in case something unfortunate happens with the parents.

Harjot Singh Narula

Harjot Narula is founder and CEO of ComparePolicy.com, an IRDAI approved insurance web aggregator focussed on selling online insurance for companies. Harjot has more than a decade of experience in software development and has also spent 5 years in US working for the mortgage and risk management industry.

Leave a Reply

Your email address will not be published. Required fields are marked *