My son turned three a few weeks ago and my life insurance agent is advising me to take a child policy for him. Should I take one?
Gaurav Gupta, Delhi
The purpose of any life insurance policy is to secure the future of one’s family, which is your family member. The choice of a policy should take into account the need that can be met by the policy, the number of years the policy is needed for and the money that it will pay off in case of the policyholder’s demise or the maturity benefit.
The purpose of buying a children’s policy is to save for your son’s future financial needs like education, marriage or setting up a business. An earning parent is an integral part of child policies as they have to propose the policy and pay the premiums. A child plan typically insures both the parent and provides for maturity benefits in instalments which start from the age when the child turns 18 years old till he completes his 21st birthday thus providing for money at times of higher education or marriage. The added benefit is waiver of premium amount in case something happens to the parent.
