All the parents want to secure the future of their children. This process of securing the future demands consideration of several factors. The age of the parents, child’s physical and mental condition, rising cost of living, expected rate of inflation etc are just some of the factors parents need to keep in mind while planning for child’s future. However, almost all the educated parents have child insurance plans in their priority list because of important role played by insurance schemes in securing child’s future. But it is an extremely hard task for the parents to effectively choose the best plan for their children.

When parents decide to take child insurance cover, they usually think of aspects like child’s education, marriage, safety in case of an accident or mishap. An effective child insurance scheme will take care of all the three aspects. So how do these policies work? The basic fundamental of a child insurance plan is the cover provided by the insurer for a child’s parents for a specified term. It simply means, child’s future will not be in any sort of danger in case his parents pass away. The child will receive the sum assured or the value of the investment at a pre-determined age. This goes a long way in covering the interests of the child in case something goes wrong.

Child insurance is a very dependable route that also assists in planning for the important milestones in child’s life. There are plenty of good insurance schemes for your child that will help in safeguarding his future. For instance, if you go for money back endowment plans, you will have an idea of how much sum you will receive and at what age of the child. Many money back policies offer fixed portions of the sum assured at regular intervals and the rest of the money is received by the child when he attains the maturity. Additionally, he also becomes eligible to receive bonus/profits etc if any.

One fundamental aspect of child insurance plans definitely secure the future of your child and that fact is earmarking of the money for the use of the child at a target date for a particular purpose, be it education or marriage.

Considering the rising expenses and ever increasing cost of commodities, it is important to secure a promising future for yourself and your family. It is the responsibility of parents to plan a secure future for their children. Parents can reap maximum benefits by investing their money in insurance plans. Insurance schemes offer a wonderful opportunity to parents to carefully plan and invest the future of their children. The importance of insurance plans in India is also highlighted from the fact that future is uncertain and unpredictable. You can never tell with assurance what is going to take place in coming times. Factors like age, working conditions, job availability, unforeseen mishaps etc can jeopardize the future of the family and the kids.

These factors make us realize the importance of suitable child insurance plans. There is no lack of wonderful insurance policies in Indian market. There are plenty of established players, local as well as international who have launched attractive insurance schemes for children. However, it is not an easy task to choose best insurance plan because of different variable factors. For instance, if you have decided to opt for insurance cum investment scheme then you will have to look for amount of educational benefits offered by the scheme, rate of inflation in coming years, your own premium-paying capacity, rising cost of living etc. You are advised to look for plans that assure you of returns after more than 10-20 years of investment.

To choose the best available alternatives in Insurance market, it is important for parents to understand the fundamentals and dynamics of insurance and child’s future needs. Talking about some of the best selling child insurance policies currently popular in India, Head start Future Project by Kotak Life Insurance, Child Dream Plan by Birla, Unit Linked Young Star Plus by HDFC and Smart Kid by ICICI etc take the cake. These policies are greatly preferred by the Indian parents because of benefits offered by them.

Except for HDFC plan, all the three plans offer death benefit in which in case of a sudden demise of a parent, child will be paid a bulk payment of the sum assured and the rest of the future premiums amount will be contributed by the insurance company till maturity. However, Kotak will pay the entire sum assured as well as unpaid premiums in the unfortunate event of a death of a parent and policy would fail to contribute thereafter. As far as cost is concerned, except for Birla, the other companies have low administration charges. Birla has the lowest allocation charges but high administration charges. Parents looking for a suitable child insurance plan can opt from any of these four plans after due consultations with the finance experts and looking at their specific needs.

While you begin the process of securing your child’s future, you need to chalk out a goal with a clear time frame and corpus requirement. You are also required to be clear about the returns expected in the plan. An insurance plan runs on making regular and systematic contribution which is called as premiums, over a long period of time. There are numerous child insurance plans in India. These plans offer basic risk cover apart from good tax advantage. One of the most striking aspects of a child insurance plan is that claims are made out to the children and not to the parents. Most of these policies do not allow any provision for loans against policies and that actually works in favor of child insurance plans. The policies offer the option of continuing with or without the policyholders that really helps in achieving the goals.

Top insurance players in India also offer Unit Linked Insurance Plans (ULIPs) that can be used for covering the risk and for investment purposes as well. Parents are offered enough flexibility to withdraw the funds on a regular interval. In these plans, investments are usually channeled into high growth options.

ULIPs have become very popular in last few years. Though, it is only suitable for investors with risk appetite but parents do not mind going for ULIPs because of possibility of high returns. The Indian child insurance market has come a long way from earlier simple money-back plans. Major players like LIC, ICICI Prudential Life, HDFC, Birla Sun Life, Bajaj Allianz etc offer numerous insurance plans to help you meet your child’s financial needs at different milestone years. Parents can also opt for comprehensive health benefit rider included in some of the child insurance plans.

Certain plans include an income-benefit rider that provides for regular pre-determined income at every future policy anniversary to meet the present education expenses in case of death of a parent. Conventional endowment plans generate handsome returns over and above the insurance cover for the earning parents. However, insurance experts often suggest parents to go for term assurance plans that will take care of the child’s financial needs in case of untimely death of any of the working parents. The best child insurance plans In India are the ones that cover both insurance as well as investment needs.

We have plenty of reasons to believe that life insurance policies for children are definitely worth the money. The child insurance plans reduce considerable stress from parents’ lives. When the parents are assured of the fact that the child’s future is well secured with the help of suitable insurance plans, they can focus on some of the other important aspects like types of plans. Choosing the right plan is a complete personal decision but in general, two major insurance plans often selected by the parents are term life and whole life plans.

Talking about each one of them separately, term plans are definitely affordable. Often considered as a temporary protection, term plan can be converted to an adult policy when the child grows up. Term insurance is pure insurance the purpose of which is to provide death benefits in case of unfortunate loss. Term insurance is all about insuring a child for the sake of pure insurance reasons. However, not many like to go for this plan as they think, amount given as premiums should be better utilized in a safe investment vehicle.

On the other hand, child whole life insurance policy is permanent life insurance. Compared to term life, whole life policies are more expensive but will remain with the child throughout his or her life. At the same time, whole life policies for a child are quite cheap in comparison to whole life for an adult. These policies not just provide death benefits but also act as an investment opportunity for the child. Whole life policies prove to be quite beneficial in the later stages of a child’s life. These plans can be used to incur the college and educational expenses of the child.

Insurance experts often suggest parents to purchase child insurance policies only if parents themselves are properly insured. The logic given here is that chances of a child dying are quite slim when compared to chances of an adult dying. The best way to protect the interests of the child is by insuring yourself. Parents should also check out all the other plans offered by the insurance companies that cover educational expenses and health related issues.