What does the best child education insurance plan look like? That’s what we will focus on below. After all, safeguarding your child’s financial future and educational aspirations should be a major priority for every parent and family. This is where these plans play a vital role in guaranteeing the same, along with ensuring mental peace for you simultaneously. Let’s take a look at their key aspects below to help you choose.
Selecting Child Education Insurance Plans- Some Tips
Here are some pointers that will help you zero in on the best child education insurance plans.
- Opt for premium waiver features- Most child plans come with premium waiver options. It is vital since in case you pass away, the insurance company will waive off the remaining premium payments while continuing to keep the policy active till the maturity date. This will ensure that your child receives the maturity benefit that was fixed for a specific age, while the death benefit will be paid by the insurer likewise.
- Choose the investment options wisely- If your plan allows investment options, such as in ULIPs (Unit Linked Insurance Plans), you should decide between equity and debt funds based on your financial goals and risk appetite. Equity funds can offer higher returns in the long term but come with higher risks, while debt funds provide stability with moderate returns. For a balanced approach, you can opt for a mix of both and use fund transfer options to protect gains closer to maturity. Traditional endowment plans do not involve market-linked risks, but returns may be lower.
- Endowments for low-risk appetites – In case you have a lower-risk appetite and an investment horizon of up to ten years, you may choose endowment plans instead. While the returns may be lower compared to ULIPs, you will still be covered against fluctuations or uncertainties in the market.
- Milestone/age-wise payouts- Some plans give you the option to realise a certain portion of the maturity amount at specific milestones or when your child turns a certain age. You can choose these features to pay for school and college at the right time. Partial withdrawals are thus one of the key features that should be included in your checklist.
- Look out for helpful riders- There are several plans that give you the option to select riders like personal accident insurance, accidental disability, etc. These will give you additional coverage with a nominal increase in your premium.
- Premium payment flexibility- You should opt for a plan that lets you choose the frequency of premium payments, i.e. every month, year, or even bi-annually. This will help you flexibly plan your finances and keep the plan active without any disruptions.
Additional Considerations
- Coverage Amount: Calculate the sum assured based on projected education costs, keeping inflation in mind.
- Long-Term Planning: Policies held for a longer duration can leverage compounding benefits in investment-linked plans, leading to higher maturity amounts.
- Terms and Conditions: Read the policy documents carefully to understand exclusions, charges, and any clauses related to withdrawals or lapses.
These are some of the core aspects that you should look for when choosing child education insurance plans from insurers. By selecting the right plan, you can secure your child’s dreams while gaining peace of mind.