When you have children, planning for their future is paramount. This future includes their education, healthcare, general savings, and marriage even. This is where buying a life insurance for your children can be beneficial. A life insurance policy for kids can build cash value over the years, thus proving to be practical and useful in securing their future.
While selecting a policy for your little ones, however, it is up to you to ensure that you are investing in the right thing. Following are a few tips to help you decide how to choose the best life insurance planfor children.
Know your options: You can either buy a term insurance policy or a permanent insurance policy for your child. Term insurance policies help you secure your future financial goals in case of an untimely exigency. A permanent insurance policy, on the other hand, lasts for as long as you continue to pay the premiums. Permanent insurance policy works well as a regular paying investment plan for your child, allowing your child to use the matured amount for education, weddings, etc. It is recommended that you opt for a permanent insurance policy because it serves well as a long-term investment plan for your child.
Benefit of buying early: Once you receive the happy news of becoming a parent, it is prudent to start considering future goals for your child, such as higher education, wedding, health, etc. By purchasing an insurance plan early on, it will provide you ample amount of time, until your child is of age, to accumulate the requisite lump sum/regular income that will be required for your child’s future goals.
Ensure that your child receives living benefits: Living benefits or ‘riders’ are now a relatively common part of children’s life insurance plans. These policy extras allow your child to access the plan’s benefit money while still underage or during emergencies. This proves to be of great help especially in unforeseen cases like a sudden ailment or a road accident. In India, banks like IndusInd Bank offer you this feature in their insurance plans.
Compare and buy: With a wide range of insurance plans for children in the market, it can get tricky for you to choose the best. You can start by comparing the policies of different companies and narrowing down the one with more benefits and better coverage.
Be careful about the exclusions: A lot of times important things, like dental checkups, recreational activities, and counsellor’s fees, are not a part of children’s life insurance plans. While these factors may not factor in the long-term plans for your child, they are nonetheless important during their developing years. Make sure that before buying a policy for your child you carefully read the terms and conditions of the plan to understand the exclusions.
Stay loyal to your insurer: You must avoid switching from one insurer to the next as loyalty pays you back, literally so, in matters of insurance. Renewing when your little one comes of age with the same insurer will benefit you as well as your child.