Parents begin to plan for their child from the moment he/she is born. This is a major responsibility of parenthood, and keeping this in mind, insurance companies now offer child plans to help you save enough for the future of your child. When you embark your search for the right child plan, you’ll see that the market offers you a baffling collection making it difficult to pick one. But however attractive a plan may look, you need to evaluate them on certain aspects. Some of them are as below –
What are your requirements from the plan?
Investments are made for certain requirements, hence your needs should be clear. When it comes to child plans, parents need to plan to have enough money for two events, child’s education and child’s marriage. The duration of the plan will matter the most. You need to consider the time and year required for the respective events to happen and see if the funds will be available then. The maturity amount you get should be sufficient to meet the future needs of your child. This means that the amount should not only cover academic needs but even requirements for extra-curricular talents and interests. Say, if your child wants to learn to play a musical instrument or a particular sport, you need to arrange for funds that’ll efficiently take care of the need. Also, keep in mind the inflation factor when deciding on an amount, because what may seem a good amount now may turn to be a meager sum a few years down the line.
What are the features offered by the plan?
Every plan in the market will have different features to offer you. You need to pick and choose the features you need the most. Some features that you can compare are as follows –
Self funding premiums –
On the death of the parent the policy continues to pay the premium towards the policy. In this way the cover continues till the date of maturity. Some polices offer a certain percentage of the sum assured and the entire amount is handed out at maturity.
Regular payouts –
Some child plans give you the flexibility of either availing the entire amount in one shot or at regular pre-decided intervals. So you can get a part of the sum assured around graduation, further studies, marriage etc.
What is the cost of the premium?
Sure saving enough for your child is very important, but you also have other responsibilities to look at. With the growing inflation it is difficult to manage daily expenses; hence, whatever investment you plan for should not affect your cash flows. This is why checking the cost of the premium is very important. You can even avail discounts on the premium by availing childplans online, as companies mostly offer discounts on online purchase.
A few things to keep in mind when buying a child plan