Child Insurance Plans - Ensuring a Stable Future for Your Child
All responsible parents have obligations to their child. One of the main obligations of parents is to ensure that their children have financial stability. If something happens to the parents, the child must have some type of security. Child insurance plans are one of the most effective ways of providing for the future of a child especially in unfortunate events such as the death of the parents.
Even though there are many child plans available on the market, it can be a difficult task for most parents to choose the right child plan for their child. In order for parents to make the right decision, they need to understand each aspect of planning for their child’s future. The main focus should always be the financial stability of the child. When choosing a child insurance plan, parents should always make sure that they take the education of the child into consideration as well as health insurance and even pension plans for the child. Some parents even take the marriage of their child and the provision of seed capital for starting up a business into consideration when choosing a child plan.
There are a few factors to consider when choosing a child insurance plan. First of all, the age at which the funds will be required for the child will determine the time frame or duration of the plan. Secondly, the amount of funds that parents would like to have available for their child as well as investment capital that they would like to have available for their child will determine the type of plan they choose. Parents should also consider their unexpected deaths or disabilities when choosing a child plan. If something is to happen to them, they should make sure that their child is secure.
The most common plans available are: the traditional plan and the unit linked commonly known as the ULIP plan. There is only one main difference between these two plans – method of investing the premium. Traditional plans invest in government securities and corporate bonds while ULIP plans invest in equity. Traditional plans give parents lower risks and provide stable bonuses to parents. Parents who are at risk might opt for a ULIP plan but the advantage is that over a long period they would have created a considerably large amount for their child’s future since the investments in equities normally beat inflation on a long term basis.
It is advisable for parents to invest in equities to beat inflation thus being able to adequately be able to fund their child’s education or marriage over a long period. Remember, when parents apply for a child insurance plan, it is not meant to be used immediately but after many years once their child is all grown up.
A child insurance plan has much to offer parents whose aim is to accumulate wealth to ensure a stable future for their child. There are many flexible plans available. With sufficient information, parents can make an informed decision to ensure their child’s financial stability and future.
Puneet - About Author:
The author frequently writes about Life Insurance policy by understanding the financial benefits available in the Indian market. His articles focus on different savings plan and health insurance online empowering readers to make informed choices.
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