4 reasons why Child Plans make good sense

TomorrowMakers ™

4 reasons why Child Plans make good sense

15 July 2015
A glimpse into the features of a Child Plan.
 
 

On a baby’s first birthday, his father gifted him an insurance policy. On seeing this, the mother said that it was a waste of money, as the baby had neither debts nor liabilities. On the face of it, this sounds like a valid argument. However, her confusion prompted a series of Questions& Answers as follows:

M: Why invest in a Child Plan?

F: In this plan, I am the insured person while our son is the beneficiary. The idea here is to safeguard his future in case something happens to me. In addition, it also helps us save for his higher studies/marriage, etc.

It is better to start early so that we can take advantage of compounding. Don’t see it as an insurance taken to pay off liabilities but as a plan to safeguard our baby’s castle of dreams.

M: So is it an insurance plan or an investment plan?

F: There are different types of insurance plans, with and without investment.This child policy comes with a ‘life cover’ as well as a ‘sum assured at maturity’. We have the flexibility to choose the tenure as well. And yes, we get immediate tax benefits up to a certain limit.

M: How will the premiums be paid if something happens to us?

F: Don’t worry. I have opted for the waiver of premium rider, which means that if I am no longer there, the future premiums will be waived off and paid by the insurance company. Hence, the policy will continue and on maturity, a lump sum amount will be paid to our son.

M: All this makes sense but why the urgency? Can’t we spend the money now and buy a plan later?

F: Let’s face it, life is unpredictable. You never know what will happen to us tomorrow. Road accidents, air accidents, terminal medical conditions, lifestyle diseases... all this is very scary and there are many what-ifs. We need to be wise and protect our child’s future, even if we are not around. And, of course we are looking only at the worst case scenario. In all probability, we will be healthy and this money will grow into a handsome lump sum amount for all of us to utilize. I think this will be our greatest gift for him.

The explanation greatly satisfied the mother. She was happy with her husband’s decision to invest in a Child Plan, as this would secure their baby’s future.

To read more about Child Plans, click here.

 

Unconventional Christmas gifts that you can give to your kids

POLL

 

MOST VIEWED CONTENT

How Ulip can help in meeting long-term goals

How Ulip can help in meeting long-term goals

Learn how ULIPs can help you meet long-term goals

Term vs whole life insurance

Term vs whole life insurance

You’ve decided to provide financial security for your family and subscribe to a life insurance policy, but are stuck in the age-old debate – Term or Whole Life insurance?

Are you aware about the 4 essential Life Insurance riders?

Are you aware about the 4 essential Life Insurance riders?

The scope of an insurance policy is sometimes not sufficient to ensure your family’s financial security. However, you can fortify your insurance plan by buying an additional cover for extraordinary circumstances. These add-ons are called riders.

Death Claim: Is it possible to claim from more than one Life Insurance policy?

Death Claim: Is it possible to claim from more than one Life Insurance policy?

It is perfectly legal to buy and hold more than one life insurance policy. Your beneficiary can rightfully claim from all the life insurance policies you hold in the unfortunate event of your death. Multiple policies offer an extra level of protection that a single plan might not necessarily provide you.

Term Insurance for Dummies

Term Insurance for Dummies

Term Insurance plans are pure protection plans which provide life cover at a nominal cost. These plans are the simplest type of life insurance plans.

Top 6 factors that affect how Life Insurance premium is calculated

Top 6 factors that affect how Life Insurance premium is calculated

Have you ever wondered why you are asked to pay lesser premium than your friend or family member? To end the confusion, we have prepared a list of factors that affect how life insurance premium is calculated.

Switch Options in ULIPs

Switch Options in ULIPs

Switching options in ULIPs, if used wisely, can help you get the most out of your investments.

boy

We would love to hear from you!

Question, comment or concern? Our contact form is the best way to get in touch. We will respond to you within 5 working days.

NEWSLETTER