Life Insurance for Children: Is it Necessary?

Life Insurance for Children: Necessary or a Money Game?

These days, insurance plans for children are all the rage. Open a newspaper and see advertisements, turn on TV and see ads, and scroll through social media. But are these policies really the best way to secure children's future? Or is it a new way for insurance companies to earn money? To know the answer to this question, today we will tell you the reality of insurance plans for children.

Why is Insurance Sold for Children?

First of all, it is important to understand why insurance is sold for children? Insurance companies say that these policies are for the financial security of your child's future. Suppose tomorrow something untoward happens to you, then your child will not have to face financial crisis. These policies also help in meeting big expenses like your child's education and marriage.

Sensational Revelation! The Hidden Secret of Insurance Companies

But, just think! Are these policies really so beneficial? Or is there some other motive hidden behind them? Insurance companies will not tell you that the premiums charged on these policies are very high. Sometimes these premiums are so high that the amount received in the future is even less than that. Also, there are many conditions in these policies, if you do not fulfill them, you do not get any benefit.

These Statistics Will Shock You!

According to a report, most people buy insurance for children because it gives tax exemption. But, will you give your hard earned money to insurance companies just to save tax? Just think, if you invest the same amount in a better investment plan, you can get more profit.

Hidden Dangers in Insurance Plans for Children

Beware! These are the Dangers of Insurance Policies

Excessive Premiums: As we mentioned earlier, the premiums charged on insurance policies for children are very high. Sometimes these premiums are so high that the amount received in the future falls short of that amount.

Maze of Conditions: There are many types of conditions in these policies, if you do not fulfill them, you do not get any benefit. These conditions are so complicated that sometimes it becomes difficult to understand them.

Long Lock-in Period: Many insurance policies have a lock-in period. You cannot surrender the policy during this period. If you do so, you may have to suffer a huge loss.

Low Returns: The returns from these policies are also very low. There are many better investment options available in the market, which can give you higher returns.

Allure of Tax Deduction: Many people buy insurance for children because it gives tax exemption. But, will you give your hard-earned money to insurance companies just to save tax?

How to Avoid These Dangers?

To avoid these dangers, it is important for you to keep some things in mind:

• Read the terms and conditions of the insurance policy carefully before buying it.
• Compare the premiums and choose the cheapest policy.
• Get information about the lock-in period.
• Calculate the returns and compare it with other investment options.
• Do not buy insurance just for tax exemption.

Alternatives to Insurance for Children: What's Better?

There are Alternatives to Insurance!

In the previous chapters, we saw that there are many dangers hidden in insurance plans for children. Now in this chapter, we will tell you what are the other ways to secure the future of children apart from insurance.

Investment Plans: A Better Option

Investment plans can be a better option to secure the future of children. You can get high returns in these plans and there are no conditions. Some popular investment plans include:

Mutual Funds: These plans are managed by professional fund managers. There are many types of funds in them, such as equity funds, debt funds and hybrid funds.

Stock Market: If you are willing to take risks, you can invest in the stock market. It can give good returns, but the risk is also high.

Post Office Schemes: Post Office also offers many types of investment schemes, such as National Savings Certificate, Kisan Vikas Patra and Sukanya Samriddhi Yojana.

Sukanya Samriddhi Yojana: Special Scheme for Girls

Sukanya Samriddhi Yojana is a special investment scheme for girls. In this scheme you get better returns and also get tax exemption. This scheme is backed by the government, so it is safe to invest in it.

Why Choose Investment Plans?

There are many advantages of choosing investment plans:

• High returns
• No conditions
• Tax exemption
• Flexibility
• Security

Things to Know Before Buying an Insurance Policy

Beware! Buying the Wrong Insurance Policy Can Cause Loss

So far we have seen the dangers and options of insurance plans for children. In this chapter, we will tell you about the things you should keep in mind before buying an insurance policy.

Keep These Things in Mind Before Buying an Insurance Policy

Assess Your Needs: First of all, you have to decide how much insurance coverage you need. This will depend on your child's age, education and other needs.

Understand the Terms: There are many types of terms in an insurance policy. Read and understand these terms carefully. If you find any condition unclear, ask the insurance company about it.

Compare Premiums: Compare the premiums of policies of different insurance companies. Choose the cheapest policy, but make sure that it is providing the coverage you need.

Calculate Returns: Calculate how much return you will get from the insurance policy. Compare it with other investment options.

Check the Reliability of the Insurance Company: Check the reliability of the insurance company. Make sure that the company has been running for a long time and has a good reputation.

Take Advantage of Tax Deduction: If you are getting the benefit of tax deduction, then take full advantage of it.

What to Do After Buying an Insurance Policy?

Remain Vigilant Even After Buying an Insurance Policy

It is important to remain vigilant even after buying an insurance policy. In this chapter, we will tell you what to do after buying an insurance policy.

Do These Things After Buying an Insurance Policy

Review the Policy: After buying the insurance policy, study it carefully. Make sure that the coverage you choose is in line with your needs.

Pay Premiums on Time: Pay the premium on time to avail the benefits of the insurance policy. You may suffer a loss if you pay late.

Keep Documents Safe: Keep all the documents of the insurance policy safe. These documents may be required if you ever have to make a claim.

Review the Policy Regularly: Review your insurance policy from time to time. Make sure it still suits your needs. If there are changes in your life, the policy may need to be changed.

Understand the Claim Process: Understand the claim process when you buy an insurance policy. Know how to make a claim and what documents will be required for it.

Beware! Risk of Claim Rejection

To avoid the risk of claim rejection, there are a few things you need to keep in mind:

Submit all the required documents at the time of filing a claim.

Follow the claim process.

If the claim is rejected, contact the insurance company and find out the reason.