Business and Finance Blog

Having a child is one of the most beautiful feelings for a parent. But this also comes with a lot of responsibilities. You have to ensure that your child grows into the best version of themselves. As a parent, one of the major responsibilities you have is to protect your child’s future, and a smart way of achieving that is by investing in a smart child policy. A child policy offers you the benefits of insurance and investment, which is why it makes the perfect tool for planning your child’s future.

You can buy the child policy when the child is as little as 14days, and it matures when the child becomes an adult. This means that the investment is a plan for a couple of years, therefore, securing your baby’s future. Read on to find out more about a smart child policy.

Term plan

A child policy comes with the benefit of life insurance as well as investment. In simple words, as a parent, you can secure your child’s future while continually building an investment corpus to cater to his/her significant milestones in life, such as education. You are the policyholder, while your child is the beneficiary.

The payout

A smart child policy can give you two options for choosing a payout: regular and a lump sum. Regular payouts come in to address your child’s intermittent needs, such as a new admission to an academic session. This ensures that you take care of your child’s needs with ease. Lump-sum payouts provide you with a considerable sum at a go to take care of your child’s significant needs that require a huge sum of money, such as paying for higher education.

The sum assured

When investing in a child policy, there are things that you need to look out for. For instance, the cost of education is continually increasing, which means that your child may need a substantial sum to pay for their higher education in the future. So, it is essential to look at the sum assured. Choose a plan that can support your child’s higher education in the future.

Premium options

You also need to check if the child policy offers a waiver of premium options in the policy holder’s demise. This means that the insurance policy can waiver all the future premium payments in case of the parent’s demise. It would be better if you also considered all the risks associated with it beforehand.

Benefits of child insurance policy

• A child insurance policy allows you to take care of your child’s education. Education doesn’t come cheap, and should your child decide to pursue expensive higher education, a child policy comes in to relieve your financial burden.
• A child policy also comes with the benefit of health insurance and takes care of your child’s medical treatment in case of a critical illness.
• You can use it as collateral for loans, for instance, if you want to take an education loan to support your child’s education.
• It is an investment for your child’s future.
• It is beneficial in the unexpected demise of the parent. The child beneficiary gets a premium waiver and the lump sum or regular payouts.

Conclusion

Invest in a smart child policy when your child is young so that you can benefit from low rates and higher returns.