Is a Child Insurance Plan Really Worth the Cost?

2024-08-02

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Some of the questions that may bother you, as a parent, are, “Can I afford my child’s education in the future?”or “What if something happens in the event of my death, how will someone take care of my child?” Maybe a good question to start with is - “Should I buy a child insurance plan?”

We want to see our children go to the best schools, colleges, and universities. We want them to have a good life in the event of any unfortunate incident that may happen to us. Yet, the outrageous costs of higher education and securing a college degree continues to be a challenge. More than 60% of the parents surveyed by ET Wealth showed that the primary reason for stress is the rising costs of education. Adding to this statistic, on an average, 90 Indians die every second due to an accident - as stated by the National Crime Records Bureau. This means children are left amongst the most vulnerable. They do not have anyone to depend on and rarely have an additional source of income for survival besides their parents. This is a frightening thought for most parents. We take so many steps to make sure our children are well off and secure in the future, having a child insurance plan is one of them.

Having a child insurance plan will ensure that your child gets a lump sum payment on the untimely death of the policyholder. All future premiums are waived and the insurance company bears all the remaining costs. It also ensures that he or she gets the money at specific intervals, ensuring all the child’s needs are taken care of.

Savings cum Protection Endowment Life Insurance Plan

The Smart Junior Plan by Canara HSBC Life Insurance is specifically tailor made to achieve all your child’s future educational needs, in the event of any untoward event. As parents, we need to plan. And making sure our children have the best life is what keeps us satisfied and happy.

Benefits of a Child Insurance Plan

There are manifold advantages to having a child education plan. While it secures your child’s future, this plan also comes with the following benefits:

In the event of the death of the insured, there will be a lump sum benefit of the sum assured, plus over ten times the yearly premium and 105% of all the premiums completed till the demise of the policyholder.
There is no need to pay any additional premiums in the event of the demise of the assured. The policy will continue for the entire policy term and will accumulate annual bonuses.
You can also avail of a tax benefit under Section 80C of the Income Tax Act 1961 for taking a child education plan.
A guaranteed annualized payment will be given out after 4 years. This is to align it with the education needs of the child.
Multiple policy term options are available which allows you the flexibility to make the right decision based on your child’s age and requirements.
The buildup of your child’s education funds is through annual and final bonuses on maturity.
If your child starts earning at an early age, their income is protected through this plan.

Features of the Child Education Plan

The minimum entry age is 18 years and the maximum age is 50 years when monthly payments are made. The Maturity age is 70 years.
The term of the policy lasts anywhere from 12 up to 25 years.
The premium can be paid annually as well as monthly.
The sum assured stands at Rs. 3 Lakh for the annual mode and Rs. 5 Lakh for the monthly mode.

Conclusion

Life is full of uncertainties. To protect your child as much as possible from such mishaps is to insure them against any financial exigency that might arise in the future. We tell our children to dream big, to not compromise on anything, and assure them as much support as required. By evaluating your child’s needs and requirements you can opt for the best policy term option available. It is better to be safe than sorry, especially when your children are concerned.

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