There are a lot of misconceptions about child insurance plans out there. Because there are so many misconceptions regarding the various characteristics of such policies, individuals hesitate to select them. Because the cost of higher education is on the rise, this can put a lot of pressure on your financial situation in the future.
Let’s examine some myths that need to be dispelled.
Myth #1: The plan only covers the child’s insurance.
False. The policy typically includes life insurance for the parent as well. Even if you aren’t there, your children won’t have to worry about their financial future in this way.
At the point when you pick the residency of the protection, pick it as per the age of your kids. You ought to design it cautiously so you get a singular amount sum when the kid approaches 18 years old. After the child reaches the age of 18, many policies provide annual lump sum payments. The singular amount can go on till the development of the arrangement.
Myth #2: The approach is fit just when the kid gets enlisted for higher examinations.
False. When the child reaches the age of 18, it is simple to file a claim for benefits. The policy will pay out to your child regardless of whether or not they enroll in higher education.
Many people plan the tenure of the policy so that the benefits can be used when the child enrolls in college. This is because applying to colleges significantly increases the cost of education. As a result, it’s critical to receive a lump sum from the policy at the right time, and many child insurance plans can be designed to do so.
Myth #3: To receive money, you must wait until the tenure ends.
False. Within a few years of joining the plan, you may be eligible for loans. In a similar vein, unit-linked child insurance plans permit partial withdrawals whenever required.
Indeed, even with a halfway withdrawal of cash from the strategy, you can continue getting benefits for the excess sum put resources into the arrangement. This is a significant advantage because you can cash out your profits when the market is favorable.
Myth #4: When one parent passes away, the policy is canceled.
False. Even if you pass away, your child’s future will be protected. In the event of the insured parent’s death, the policy provides for receiving all benefits without having to pay any additional premiums.
The plan even provides a lump sum to help the family cover expenses in an emergency. The family may find it easier to manage the stress with all of these features.
Myth #5: Inflation may make it impossible for policies to keep up with the rising cost of education in the future.
After taking inflation and other factors into account, the insurers calculate the sum assured and other aspects of the policy. By selecting a package based on your current financial situation, you can rest assured that you will be able to meet your children’s future financial needs.
Myth #6: There is no future security, and the death benefit is only paid in one lump sum.
The insurer pays the nominee a one-time sum if the parent dies while the policy is in effect. Additionally, the policy continues to be in effect, and the child receives all benefits once the policy reaches maturity.
Myth #7: The terms and conditions of child policies are uncertain.
False. The policy document always mentions all of the terms and conditions. You can quickly get in touch with your insurance agent to clarify any questions you may have.
Most of the time, insurance companies let customers return the policy within a few weeks of when it was first started.