Securing your childrens future

Given that child insurance involves investment planning over a number of years,it is a great tool when planning for the future. Below are some long-term benefits of child insurance plans.

Childs Education

One of the biggest expenses that parents face is footing their childs tuition fees. Studying in a good school does not come cheap. Moreover,if your child later decides to go abroad for higher studies or enrol in a leading business school,will you be able to fund the costs? The sum available on the maturity of a child insurance plan could go a long way in easing this financial burden.

Serious Illness

If your child has a family history of serious illness,purchase child insurance when he/she is young and healthy. A child insurance plan will provide financial support in case if an accident or hospitalisation. You could withdraw a lump sum from the yet-to-mature policy to ensure that your child receives the necessary medical treatment.

Untimely Death of a Parent

One can never be too prepared for death. In the event of death of a parent during the term of a child insurance policy,the insurer offers a premium waiver. Thus the beneficiary receives a lump sum and is no longer required to make any premium payments on the policy.

Disciplined Savings

Before purchasing child insurance,calculate what you are planning for,whether higher studies for your child,marriage or even a mortgage on a house. While you do your calculations,keep inflation in mind. Prices have risen considerably in less than a decade. Once you have an amount in mind,buy a suitable child insurance policy. The regular premium payments will soon become a habit and you will be successfully putting money away for your childs future.

Income Protection

This is an important benefit for children who earn significant incomes at a young age eg child actors,singers,etc. Their money stands to multiply at a higher rate over a longer period when invested in a child insurance policy.

Collateral for Loans

A child insurance plan is also widely accepted as collateral by banks and other lenders when processing education loans or other personal loans. This could stand your son or daughter in good stead for the future.

When purchasing child insurance look for policies that focus on cash value. High cash value can later be used to take loans or make a down payment on a house. Avoid policies that increase premium rates annually. Most importantly,buy insurance while you child is young to benefit from low rates and high returns.

The author is the CEO of MyInsuranceClub.com