How to invest in a Child Plan?

A disciplined investor’s best friend, the multiplier effect of compounding allows you build a substantial corpus to address varied needs of your child at different stages of life. It also puts less pressure on your existing finances as the cash outflow is minimal.

A sizeable life cover

In a child insurance plan, your child is the beneficiary while you are the life assured. In case, something happens to you, your child gets a lump sum that can be used to meet future expenses.

Therefore, prior to investing in a child plan, it’s vital for you to opt for a sizeable cover that can meet the expenses your child would incur in the future. Take a note of all the possible expenses while calculating the life cover.

Additional Read: 4 Best Child Plans in India That You Should Consider

Future growth prospects

Note that in most cases, the corpus build through a child plan would be used in the future for higher education, healthcare, and lifestyle needs. Hence, it’s essential to opt for child plans that can beat the effects of inflation.

Inflation erodes the value of wealth with time. The decision to invest in a child plan should be made with its future growth prospects that help you stay ahead of inflation rates. Market-linked child plans help you in capital appreciation and build a large corpus for the future needs of your child.

Waiver of premium option

It’s prudent to invest in a child plan that offers this feature. With this feature, in case of your demise during the policy term, the insurer waives off all the future premiums, keeping the benefits of the policy intact.

Thus, even in your absence, your child continues to receive the benefits of the policy. It ensures that the maturity benefit of the policy is kept intact in addition to the death benefit paid. Hence, a child plan is one of the best financial gifts you can gift your child for a secured future.