Our top priority as parents is always our children and giving them the best in life no matter what. But who doesn’t incur financial trouble and money crunches in life? However, during such a time, your child is still growing and aspiring to fulfil a million dreams. A life insurance policy for children offers a safety net to your little one from all kinds of risks. Learn everything you need to know about child life insurance policies with us below.

What Is a Child Life Insurance Plan?

Child insurance is a type of policy that offers financial security to your child’s future. As your little one grows, they have endless hopes and dreams of studying and achieving certain milestones. With life insurance, you can make it possible without any hitches. Life insurance for children provides a life cover along with a lump sum maturity payout on the expiry of the plan. You can also opt for policies that give regular payouts during crucial times in your child’s life. Hence, you can personalise such plans according to the future need of your precious one.

How Does Child Life Insurance Plans Work?

For a child insurance policy, you can opt for an endowment plan, a money-back policy, or a child ULIP insurance. Similar to the standard endowment policies, you shall receive a lump sum payout on the maturity of the insurance plan. This amount can be used towards your child’s school or for any future plans.

Money-back insurance is one of the popular plans that parents choose for their child. Here, you get regular payouts from your policy instead of a lump sum at the end of the tenure. These payouts can be quite helpful to meet crucial milestones in your little one’s life. Whereas a child Unit-Linked Insurance Plan provides an investment opportunity where part of the premium is invested in the selected fund. You can choose a suitable fund type based on your risk appetite and the returns you want to earn.

Benefits of Child Life Insurance

Here are some key benefits of life insurance plans for children that you should know about:

Financially safeguards in the absence of parents

Mishaps don’t come knocking on your door and thus, you must always be ready in case of an unfortunate incident. With child life insurance, you don’t have to worry about your little one’s future. In the event of the parent’s demise, the child is then taken care of by the family of their parents. Their financial well-being can become a burden and thus, life insurance secures this aspect. The lump sum payout can be utilised towards the education of the child and other requirements.

Offers lump sum benefit

The most lucrative feature of a child insurance policy is the lump sum payout available on maturity. This amount can be used towards the future of your precious one and to ensure they get the best in life. By making regular premium payments, you can stop worrying about the increasing cost of education and enable your child to have access to a reputed school.

Extensive protection with riders

Similar to the standard types of life insurance policies, child insurance plans also enable you to maximise coverage with rider benefits. By paying an additional sum over and above your policy premium, you can get extensive perks apart from the benefits of your insurance plan. Some popular ones available under the child insurance policy are waiver of premium rider and personal accident rider.

Partial withdrawal to satisfy any need

You might need to withdraw some funds to meet any financial requirements of your little one. This is allowed under the child insurance plan but it may come with some terms and conditions. Some insurance providers permit partial withdrawal after the child has turned 18 years of age. Therefore, such a feature goes a long way in satisfying the needs of your children.

As a parent, the future of your child is of utmost importance and with such a type of insurance plan, you can be worry-free. The above-mentioned pointers must have cleared any doubts regarding the policy and explained how beneficial insurance is. So, compare various insurers and plans before choosing a suitable insurance policy for your precious one!