subject: Introduction To Child Plans In India [print this page] Investment planning is one of the basic planning done for every single child in the families of India. It is very important to safeguard the future needs of children so that they can build up a better future. Various kinds of child plans in India are offered by life insurance companies. The plans are life insurance plans only; providing cover to the childs life.
Importance of Child Plans in India
These life insurance policies help to save money in order to meet the financial needs of the child in question. Education, profession and wedding; all the three phases of life need money. With the increasing inflation rates, everything is becoming costlier with each passing day. Hence, arranging money on-time becomes the prime responsibility of every parent, in order to safeguard the childs future. The child plans provide the money in two events. Firstly, on the maturity of the policy on completion of the specified time period. Secondly, the plans ensure the availability of funds, even in the event of death of the parents. Thirdly, in the event of the death of the child insured, the complete assured sum is returned to the nominee.
Types of child Plans in India
The plans in India are technically, the extension life insurance policies such as: Endowment, Money back and ULIP plans.
-Endowment assurance: Some child plans are defined for certain time period. The claim is paid either in case of death of the child in question or if the child survives the insurance policy term. If the child expires within the specified time period, then, in that case, the claim is paid to the family members i.e. the parents.
-Money Back Policy: This is a policy that guarantees periodical payments for meeting the child financial needs. In case, the child expires within the specified time period of the policy, then the assured sum and the interest incurred on the assured sum is paid to the nominee, as mentioned in the policy document.
-ULIP: These are called Unit linked Insurance Plans. These are high risk investment plans and are dependent on the market conditions.
Hence, it can be concluded that investing in child plans is the best investment option for securing the childs future because such plans encourage the parents to save money in a systematized manner for building sufficient amounts to meet the childs need.
