Here’s How We Debunk the Most Common Child Plan Myths for You

Must Read

Howdy, Modi! : World media reactions on Modi-Trump’ grand Houston Event address

New Delhi, Sep 23: United States President Donald Trump and Indian Prime Minister Narendra Modi on late Sunday shared...

Howdy Modi : Modi-Trump mark history in US-India relationship with great show at Houston

Houston, Sep 22:  Modi, delivering his speech at the historic event, talks about the development underwent over five years...

ECI announces dates of Maharashtra & Haryana elections; Single Phase Election on October 21; Result on 24th

Election Commission of India has announced the dates of much-awaited state elections. According to the Chief Election Commissioner, Sunil...

To raise your child properly, your duties aren’t limited to food, clothing and shelter. You also require shaping their knowledge and character, educate and teach them, and prepare them to face the real world. Along these lines, you need to provide your child with the best possible education and investing in the best child education plan is a step in the right direction.

Child education plans are a form of life insurance plans that are designed to create a secured financial corpus for your child future. However, in spite of the many benefits offered by such plans, there are a lot of myths attached to it. Parents usually fail to understand the finer details of child plans and develop preconceived notions, which prevent them from buying one. In the following sections, we will debunk some of the most common child plan myths for you.

Myth 1: Your Child’s Life Is Covered Under the Child Education Plan

Reality:

The most common myth surrounding child education plans is that the life assured is the child. However, child plans insure the life of the income-earning parent. The child merely acts as the beneficiary in case of an unforeseen event such as the untimely demise of the parent. Opting for a child plan ensures that your child has the necessary financial support. Thus, assuring that you, as a parent, have one thing less to worry about in your absence.

Myth 2: In case of Your Sudden Demise, Your Child Will Have to Pay the Premium

Reality:

Child plans from reputable insurers like Future Generali come bundled along with a ‘Waiver of Premium’ benefit. Meaning, your child won’t be burdened with the responsibility of paying the future premium in your absence. The policy continues to stay active, even in your absence, as the insurance company takes it upon itself to pay all future premiums.

Thus, in case of your sudden demise, the child education plan does not get discontinued. Instead, in such an event, the insurance company pays a lump sum amount to your nominee, which can be utilized for meeting the future needs of your child.

Myth 3: You Can Only Avail the Payout at The End

Reality:

You do not have to wait till the maturity of the child education plan to avail the payout. In fact, the best child education plan allows withdrawing a certain percentage of the fund after completion of the five-year lock-in period. Moreover, you can make the withdrawals at fixed intervals, to coincide with the major events in your child’s life.

Myth 4: It Is Only Suitable for Meeting Your Child’s Education Costs

Reality:

In a child education plan, there are no restrictions on the usage of the plan benefits. When the payout is made, it is not necessary to use it only for the child’s future education. You can use it as you please.

Suppose, if your child chooses not to pursue higher education or you would like to use the payout for fulfilling other commitments, you can still do so. However, making funds available at the due dates and securing your child’s future remains the primary aim of the child education plan.

Myth 5: Child Education Plans Provide Only Insurance Coverage and Nothing More

Reality:

Apart from offering you an insurance cover, the best child education plan also acts as an investment tool. This becomes possible by making an early investment in a ULIP-based child plan. In such plans, the premiums paid by you are invested in the equity market (as per your preference).

Therefore, your investments can grow according to the growth in the equity markets. Also, since equity market growths are inflation-adjusted, your child education plan provides a sufficient corpus for meeting rising costs in the future. This, in turn, it effectively helps meeting the increasing educational and other needs of your child.

Myth 6: The Terms and Conditions of The Child Education Plans Are Difficult to Understand

Reality:

Child education plans are simple to understand. You just need to understand the benefits promised under the plan, the premium that you must pay and the tenure of the plan. The rest is easy. The child plan continues for the chosen policy tenure and promises maturity benefit even after the untimely demise of the parent.

The Bottom Line

Hope that we are able to clear the myths surrounding child education plans. If you too have believed in any of these myths, it’s time to see the reality.

Remember that the key is to invest in a child plan as early as possible, no matter how much you start with. So, think of buying a child education plan the day when your bundle of joy is born. Investing early will only benefit you, thanks to the ‘Power of Compounding’. So, understand the benefits of a child education plan and purchase one if you are a parent.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisement -

Latest News

Trump lauds relations with Italy, Rome seeks trade dialogue (Lead)

Washington, Oct 16 (IANS/AKI) Ties between Italy and the US "have never been so good", US President Donald Trump...

Libyan conflict risks destabilising Africa: Italy

Washington, Oct 16 (IANS/AKI) The protracted conflict in Libya could destabilise the whole of Africa, Italian President Sergio Mattarella said on Wednesday after talks...

Good friends buy Pakistan four months to ‘eliminate’ terror financing – But can it?

New Delhi, Oct 16 (IANS) With all-weather friend China heading the FATF, and backed by two other "brotherly countries" of Malaysia and Turkey, Pakistan...

Telcos passing off wirelines as mobile numbers to evade charges: Jio

New Delhi, Oct 16 (IANS) Reliance Jio has alleged incumbents, including state-run BSNL, Bharti Airtel and Vodafone Idea, have fraudulently masquerading wireline numbers as...

Vice President watches ‘Sye Raa…’ with Chiranjeevi

Hyderabad/ New Delhi, Oct 16 (IANS) Vice President M. Venkaiah Naidu on Wednesday watched Telugu movie "Sye Raa Narasimha Reddy" along with its lead...
- Advertisement -

More Articles Like This