How to select the right Child Plan for your kid
The role of a parent comes with innumerable joys and its own share of responsibilities. Right from raising the child from infancy to seeing him/her settle down with their own families –there are umpteen things one needs to take care of. And like every parent, you too, would want to ensure that your child’s every need is taken care of without any compromises.
This is where Bajaj Allianz Life Insurance, with its child plans, can assist you in taking care of your child’s education or marriage expenses in the years to come. All you have to do is regularly invest a fraction of your income in a child plan to ensure you have sufficient funds in the times ahead when your child needs it the most.
So tomorrow if your child wants to pursue a degree in Architecture from abroad or a film-making course in a reputed institute, you are well prepared to bear his/her expenses. And even if something unfortunate were to happen to you, you are assured that you will be able to look after your child even when you are not around.
Selecting a Life Insurance policy for children is one of the best ways to secure their future. It provides them with the required economic support. Child Plans primarily aid in higher education and marriage expenses. In case of loss of the main breadwinner, a child plan can remarkably safeguard the child’s future.
Though each plan is unique, certain important factors that one must keep in mind while selecting a child plan are:
(a) When and what is the expected requirement: *Planning for your child’s future should start as soon as he/she becomes a part of your world. Starting early will help you keep ahead of your child’s requirements. Invest in such a manner that you get optimal returns and ensure that your child gets the money no matter what the circumstances are.
There are two primary needs for which parents should plan – education and marriage of the child. You need to consider the time and year of required funds for the respective events. The maturity amount should be sufficient to meet the future needs. By future needs, we mean not just academic needs; the plan should also provide for extra-curricular talents and interests. Tomorrow if your child wants to learn how to play the piano or pursue their interest in lawn tennis further, you need to make arrangements such that they can be taken care of satisfactorily. While planning for the amount of expenses, keep in mind the inflation, which may increase your requirements manifold.
(b) Features offered by the plan:* All plans have different characteristics. One needs to minutely differentiate between the various features of the policies according to specific needs and then choose a policy which best suits their needs. Some comparable features that could be considered are as follows:
(C) Self-funding of premiums: In case of death of the provider, insurance companies have an arrangement, which allows continuation of the plan without the burden of premium payments. Life Insurance companies take it upon themselves to ensure that the child gets the maturity benefit.
(D) Flexibility of the plan: Best Child insurance plans allow for partial withdrawals; this proves useful to take care of urgent needs without disturbing the regular expenses and income matrix. The flexibility to switch investments from one fund to another lets you capitalise on the market conditions and gain/protect yourself from market volatilities.
A comparison of the free switches and redirection of investments permissible in a year gives you the freedom to plan your finances better.
ULIP PLANS (Fund options)
While a financial advisor provides help for picking the right fund and creating a judicious mix of investments, one must look out for the fund offerings by the company. Bajaj Allianz Life Insurance, for example, offers a variety of 7 funds ranging from complete debt exposure to complete equity exposure.
Traditional Plans (Bonus pay outs)
Look for the bonuses you are eligible for in the plan. Bonuses usually start getting accumulated from the 2nd policy year onwards and add to the corpus substantially. You may also want to check the type of bonuses associated with your plan. For example, whether it is cash bonus and the options allowed with it or in the case of reversionary bonus you may want to check if it is simple or compounded.
Take a look at our Child Insurance Plans and give your child the best gift of a secure financial future today.
By Mr. Ranjan Dutt, AVP- Marketing , Bajaj Allianz Life Insurance