4 reasons why Child Plans make good sense

TomorrowMakers ™

4 reasons why Child Plans make good sense

19 March 2018
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.

 
 

MOST VIEWED CONTENT

All about bonuses in life insurance plans

All about bonuses in life insurance plans

Bonus, in common parlance, refers to an extra payment received over and above the assured income. But what does it mean in Life insurance?

Do not make the same mistakes I did by ignoring term plans

Do not make the same mistakes I did by ignoring term plans

If you give any of the mention excuses, you might be inviting a trouble in yours and your loved one''''s life. Read and take a smart decision of buying a term plan to create a shield around you and your family

What makes buying life insurance online click?

What makes buying life insurance online click?

From buying mobile phones to placing orders for grocery items Indians are getting hooked on online shopping in a big way. Till a few years ago life insurance was mainly bought offline but now customers are also showing increasing interest in buying life covers online.

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?

A simple guide to Life Insurance

A simple guide to Life Insurance

Purchasing life insurance is an essential part of planning for the safe and happy future of you and your loved ones. Here’s what you need to know to find the right plan.

Maturity benefits: what you need to know when buying insurance

Maturity benefits: what you need to know when buying insurance

Thought life insurance only gives financial support in case something goes wrong? No. It can grow your money too.

Comparison of PPF and life insurance: Which comes first?

Comparison of PPF and life insurance: Which comes first?

Protection first, savings next is the best advice. Your planning should rest on two pillars, protection and saving.

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