It is every parent’s wish that the future of their child or children will be without stress or any financial problems. That is why many parents go for child plans to secure the future of their children. However, parents must be careful with the choice they make, considering that there are so many child plan options in the market. Each of these options has benefits and repercussions. There are different types of child plans, and this makes it important to know about them all before making the investment decision. If you are a parent looking for the best child plan, this post will take you through different types of child plans and the benefits of having a child plan.
Types of Child Plans
There are varieties of child plans, all created to fit the different needs of parents. These plans include:
1.Unit-Linked Investment Plans
Just like the name suggests, the ULIP child plan comes in the form of multiple units distributed within the same fund. It is a combination of Investment and reliable insurance. A parent can choose between equity and debt funds, depending on their goals. The best thing about this child plan is that it works both as an investment and insurance. The plan comes with flexible options to help you choose your ideal option.
2.Endowment Child Plan
This kind of plan assures low risk once you invest with your insurer. The investment you make is divided into several units and invested in different places. Just like the ULIPs, endowment plans are both insurance and investment. Large returns are not guaranteed, but you are assured of the financial security of your child.
3.Single Payment Insurance Plans
Sometimes you may have enough money to pay a lump sum to the insurer. This will save you from paying the monthly premiums expected by your insurer. Therefore, you can make a single payment and enjoy the bonuses.
4.Regular Payment Plans
With this type of child plan, you make regular payments say monthly. The payment is based on the terms and conditions of the company. As the parent, you can choose the benefits you would like your child to enjoy and leave others. This way, you will only pay for specific premiums.
Benefits of Having a Child Plan
- A Combination of Insurance and Investment
A child plan comes as a perfect combination of investment and insurance. Every option you choose for your child can provide returns and cover on the selected areas.
- Assured Protection in Case Parents Die
The future is unknown and unfortunate events like the death of a parent or parents may happen. A child plan makes sure that the life of the child continues well without any further hindrance. The right insurance can cater to your child’s expenses so that they can continue living well even in your absence.
- Support for Education
Even though you may have taken an education loan, it is not guaranteed that that will remain the case in the future. The future may come with unexpected burdens, and another loan can be too much to put on your shoulders. Getting a child plan that will mature in time ensures you can support their higher education without any problems. Therefore, your child can study in peace without worrying about your finances.
Securing the future of your child is a vital factor. This is where getting the right child plan comes in. this article has given you different types of child plans and their benefits. Therefore, you are in a good position of making the right decision concerning your child’s insurance plan.