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How to Choose a Child Insurance Plan?

While life insurance plans offer a lot of benefits, their biggest purpose is to help secure the financial future of your loved ones in your absence. And when you have children, the responsibility of doing everything to help them achieve their goals becomes prominent. When choosing an insurance plan to secure your children's financial future, you may have come across child insurance plans. In today’s scenario, where the cost of education and cost of living, , is rising, parents worry about being adequately prepared1. To alleviate this issue insurance providers have developed a child insurance plan specifically for children.

Investment plans also act as tax-planning tools, as many avenues help reduce tax liability. There are different types of investment plans, and by choosing the right one, you can invest according to your needs and grow your savings.Read Less

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Written ByPalak Bagadia
AboutPalak Bagadia
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Palak Bagadia, Associate – Digital Marketing at Bajaj Allianz Life, with experience spanning content and performance marketing, recruitment, employee engagement in the BFSI industry.
Reviewed ByRituraj Singh
AboutRituraj Singh
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Rituraj Singh,With over 6.5 years of experience in the insurance industry, Rituraj Singh, Manager- Product & Brand Marketing at Bajaj Allianz Life Insurance overlooks new product launches, compliance, and brand projects, leveraging artificial intelligence and technology to enhance outcomes.
Written on: 7th July 2024
Modified on: 7th July 2024
Reading Time: 15 Mins
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When it comes to choosing the child insurance plan, you may feel overwhelmed as there is so much to think about and do. Here’s a step-by-step guide to how you can choose the appropriate child plan.

 

Steps for choosing a child insurance plan

Here are some simple yet practical steps that will help you understand how to choose child insurance:

1. Start planning - even before your baby is born

To make the proper use of the investments that you wish to do for your child, it is important that you start planning early on, even if it means before the child is born. When you start too late, you can easily miss the remarkable power of compounding.

2. Chalk out your needs and aspirations

When choosing child insurance it is essential that parents must evaluate the necessities of their child and inflation because all insurance plans are primarily aimed at the far future. The cost is increasing for everything including higher studies, skill development programs, coaching, and so forth. Choose a plan that can efficiently secure your child’s life financially and help them lead a bright path.

3. Comprehending the plan is imperative - Take the help of a professional if need be

It is crucial that you understand the concept of child insurance plan. Reading the policy carefully, clearing all the doubts with a professional insurance expert, and knowing about the charges, premium, sum assured, rider benefits, tenure, and maturity benefits, are important. They can help you choose the suitable insurance plan for your child.

4. Understand your capability to invest - Choose a suitable sum assured and premium paying frequency

Hence, considering your financial status and risk appetite is important. Your capability is determined based on your age, financial status, and other personal components. Hence, evaluate carefully, if you are capable to take up higher premiums you can opt for a plan with better coverage, however, avoid the temptation to go for coverage that you might not be able to afford in the long run.

5. Make sure to include suitable riders

To increase the coverage on your base plan, always include suitable riders/add-ons at nominal extra cost. One of such rider is the premium waiver benefit rider. Depending on the rider terms and conditions, it waives off all the remaining premiums in case of the parent’s death (in some cases disability) without impacting the life cover benefit. This way you secure your child’s financial future even if an unfortunate event occurs.

6. Try to opt for a flexible plan that you can customise as per your/ your child's changing needs

A child insurance plan has to be flexible because children's needs grow with time. After all, the lack of resources shouldn’t force you or your child to compromise with their dreams. That’s why always choose the suitable insurance plan for your child that allows you pay-outs when needed. Also, some child insurance plans give you the freedom to include add-ons/riders as per your child’s requirements.

7. Do market research before you invest - Compare plans, premiums, and companies

Always look for the appropriate possible plan. For that research thoroughly, compare it with various insurance providers, their distinct plans, maturity benefits, premium amounts, etc. This will help you figure out the suitable plan as per your budget with the coverage benefits. Make use of online tools to calculate the coverage and the premiums, read the reviews and ratings of a company, and make sure that you choose a reliable company.

Conclusion

Just like all parents, you also want nothing but the secured life for your child. You wish to give them a stable and safe future, however, the unpredictability of life can be scary. Therefore, giving your child the security of a child insurance plan is indeed worth considering. Make sure to keep the given steps in mind when thinking about how to choose a child insurance plan, and without any further ado, consider giving your child the financial future he/she deserves.

Source:

1https://www.ndtv.com/business/what-does-it-cost-to-educate-a-child-in-india-and-how-to-plan-for-it-3272408

BJAZ-WEB-EC-01757/22

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~Tax benefits as per prevailing Income tax laws shall apply. Please check with your tax consultant for eligibility.

The above information is for general understanding and is meant to educate the general public at large. The reader will have to verify the facts, law and content with the prevailing tax statutes and seek appropriate professional advice before acting on the basis of the above information.

The views stated in this article are not to be construed as investment advice and readers are suggested to seek independent financial advice before making any investment decisions. For more details on risk factors, terms and conditions please read the sales brochure & policy document (available on www.bajajallianzlife.com) carefully before concluding a sale.

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*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.

~Individual Death Claim Settlement Ratio for FY 2023-2024

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


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%%Above illustration is for Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V03) considering Male aged 25 years | Non-Smoker | Policy Term (PT)– 30 years | Premium Payment Term (PPT) – 30 years | Sum Assured opted is Rs. 1,00,00,000 | Online Channel | Standard Life | 1st Year Premium is Rs. 6,238. 2nd Year onwards premium is Rs. 6,659. Total Premium Paid is Rs. 1,99,349 | Medical Rates | Yearly Premium Payment Mode | Death benefit opted is lumpsum payout and monthly installments (Lumpsum Payout Percentage : 45, Income Payout Percentage : 55) | Premium shown above is exclusive of Goods & Service Tax/any other applicable tax levied, subject to changes in tax laws, and any extra premium and is for illustrative purpose only. This is inclusive of all the discounts mentioned above.

##Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

@Term Insurance plan bought online directly from Bajaj Allianz Life Insurance has no commissions involved.

^^The Return of Premium amount is total of all the premiums received, exclusive of extra premium, rider premium and GST & /any other applicable tax levied, subject to changes in tax laws
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