It is said that children are Gods or manifestations of God. Children are equivalent to God. They are innocent, cute, kind and vulnerable beings. Children are precious and are 100% of our future. We have to safeguard them.
How will you safeguard them? How will you ensure a bright future for them? First, let us see what child insurance is.
What is child insurance?
Child insurance is nothing but life insurance policies designed to financially meet the needs of children. The needs of the child would be met even if the parents die in an unfortunate event. Upon the demise of the policyholder, child insurance plans offer a lump-sum payment and abdicate all future premiums and invest in the child’s name till he/she turns 18.
In case unfortunate and unforeseen circumstances take away the life of an insured child, the funeral charges of the child would be borne by the insurance company.
How is the money saved?
The parents invest year after year in the name of the child, starting as soon as the child enters the world. An unfortunate demise of the parents will ensure the kid is well taken care of till he reaches the age of 18. If the parents are alive, the money can be used for the kids higher education or wedding.
What about inflation?
Inflation is the biggest enemy of every income earner, every person who knows the value of money, every tax payer, every investor and every customer! To beat inflation, we need to begin investing and getting insured at the earliest. Prices are going to increase.
Why is child Insurance important?
The ever rising inflation is the biggest reason we should invest and get insured. The ever rising costs of education, healthcare, medicine, basic goods and services, comforts and luxuries, etc prompt financial advisers to advice more people and investors to invest and get insured. It is a mad race and we are all running this mandatory race as a part of life.
Pros of Child Life Insurance:
Any insurance, first of all, is meant for protection. Health insurance, term insurance, travel insurance, motor/auto insurance, etc are all meant to insure or protect. Child Life Insurance is also meant for protection. Having no insurance at the time of demise will create financial burden on those who are already facing emotional grief. With insurance, at least financial needs can be taken care of.
Proper usage of funds in your absence
If the parent dies, the insurance company will pay for the needs of the child and continue to do so till the kid turns 18. This way, parents can heave a sigh of relief that in case they die, their children will be taken care of financially. Also, when both parents die, usually the grandparents or other friends and relatives consider adopting the orphaned kids. This gives them the emotional support they need.
Even if you don’t have dependants, a life insurance still helps you
Raghav has student debt to clear. He decided to avail insurance. A few years later, he and his wife died leaving behind their only child. The insurance company not only cleared the debt but also began financially supporting the child till he reached 18.
Cons of Child Life Insurance:-
Half knowledge and fear of the unknown
The wise men of yore have advised that half knowledge is perilous. That’s true. Having half knowledge of anything is dangerous. Similarly, when a person doesn’t know something, he naturally fears the unknown thing. Since many people are unaware of things like child life insurance, they fear they may lose their money or may not get back sufficient money. Consulting an unbiased financial adviser is the only solution for this.
Sometimes, it’s just unnecessary
You might not have any dependants. No debts to clear. You might be single. Or you are married but have no children for various reasons such as you don’t plan to have one. Your spouse might also be self sufficient and you think he/she can manage on his/her own in your absence. Even if you have children, it is likely that they will grow up to be adults regardless of whether they are healthy or not. At such circumstances, you don’t need to buy any child life insurance.
Misunderstanding insurance as an investment product
Some people think insurance is investment! This is not true. An investment is your savings for the future while insurance is to insure or protect. An investment is where you invest regularly. An investment is where you invest regularly to meet your short-term, medium-term and long-term goals. Insurance protects you or your family.
It’s high time people come out of their comfort zones and start ensuring and investing better than ever before.
For more information visit www.moneymindz.com or give a missed call to 022-62116588
For More Information Visit:
To Get Personal Finance Information From Certified Financial Planners: