As parents, it is your responsibility to ensure a bright, safe, and better future for your little ones. And for that, you can do various things like an investment as per the growing age of your kid, or you can opt for child life insurance plans. But life insurances are quite infamous these days because some companies are doing shady practices. However, there are some good options also available when it comes to life insurance for your child.
And if you are considering opting for life insurance for your little one, then this post is all about you. Below, we will be going over all the advantages and disadvantages of signing up for child life insurance. So stay tuned because you are about to learn something new regarding these insurance companies that sell child life insurance plans.
đź‘Ť Child Life Insurance Advantages
Here are some pros for having life insurance for your child:
1. Medical And Accidental Insurance Cover
If there’s any medical history in your family tree, then you should consider going for a child life insurance plan because you should be prepared for the worst. Once you take the insurance when your kid is at his/her early age, it would be much easier for you to claim the insurance in case your little one is diagnosed with any disease later on in life. Or it could be that there is some kind of unfortunate accident, in that case as well, the child’s life insurance can cover the treatment expenses. And we live in a world, where mishappenings are a thing if the parent dies when the kid isn’t mature enough, life insurance can ensure a better and bright future for a child.
2. Education Benefits
Child life insurance also helps parents plan their little one’s educational journey. If your kid wants to study in higher degree colleges or schools, then child life insurance can also help you manage the finances in that stage. Most good child life insurance plans are structured to provide financial stability or assistance to your little one at significant points in his/her life. This way, you are enabling your kid to study in whatever stream he/she wants to make a bright career in the future.
3. Insurance Maturity
When the life insurance maturity is achieved, it works like a savings fund for your child. And all the insurance maturity earnings can be used by you or your kid for various purposes like education, healthcare, and achieving other goals in life. And that’s why experts advise that you should opt for child life insurance in the early years of your little one’s life. This way, you can ensure that your kid will get the life insurance’s maturity benefits in the future.
4. Additional Benefits
Many insurance companies offer other guaranteed benefits, and as a parent, you should consider those options because it can be something that plays a huge role in your kid’s life later on. With these benefits, child life insurance acts as a proper and premium life insurance. So don’t forget to check out or ask for such additional benefits when signing up for child life insurance.
đź‘Ž Child Life Insurance Disadvantages
Here are some cons of child life insurance:
1. Poor Investment Option
According to many experts, child life insurance plans are poor investment options, since it is costly in the long run, and doesn’t provide full coverage as other plain-term insurance plans. If you are financially stable, then going for equity mutual funds investments would be a great way to secure your child’s future. With mutual funds investments, it is easier to transfer your investment to other funds whenever you want. But with life insurance, you certainly can’t do that.
2. Heavy Surrender Charges
As mentioned earlier, it isn’t possible to change the life insurance plan provider, and if you want to terminate the insurance plan, heavy surrender charges will be applicable. And you should be aware of these surrender changes when opting for a life insurance plan for your kid. This is for sure one of the biggest disadvantages of child life insurance plans.
3. Plans Are Made Confusing
Some insurance companies make the insurance plans quite complicated on purpose. Thus, multiple insurance plans exist with almost the same benefits, but some minor changes here and there. This is the reason why many people don’t trust insurance companies.
4. Not Great In Terms Of Tax Benefits
Tax dedication would be another disadvantage of child life insurance. It is because whenever you will claim the insurance, there would be some amount deducted as applicable taxes. However, the same case is with mutual funds investments. So it would be better to use a mix of both, mutual funds as well as child life insurance plans to secure a bright future for your little one.
Conclusion
Child life insurance plans ensure the financial safety of your little one even if you are not around. But certainly, not every life insurance plan is good for your child, so you should research some of the best options in the market. And with these advantages and disadvantages of child life insurance, you can form a better decision.
Child Life Insurance Frequently Asked Questions
Q1. What Is The Maximum Age For A Child To Opt For A Child’s Life Insurance Policy?
Ans: Well, the good news is that there’s usually a cutoff age for child life insurance policies, but it can vary between insurance companies. Typically, it ranges from 18 to 25 years old. To be sure, just give the insurance company a quick call to check if your child is still eligible for coverage.
Q2. How Is Child Life Insurance Any Different From A Regular Life Insurance Policy?
Ans: Child life insurance is a special type of coverage designed just for kids, while a regular life insurance policy is meant for adults. Child life insurance provides a death benefit in case the child is not around anymore, while a regular life insurance policy provides coverage for the individual throughout their lifetime.
Q3. Can I Still Get A Life Insurance Plan For My Child If He/She Has A Pre-Existing Medical Condition?
Ans: Of course! It just depends on the insurance company and the policy you choose. Some companies may offer coverage for children with pre-existing medical conditions, but it may come with higher premiums or exclusions for specific conditions.
Q4. What Happens If I Decide To Cancel The Child’s Life Insurance Policy?
Ans: If you change your mind about your child’s life insurance policy, you may be entitled to a refund of the premiums you’ve paid, minus any fees or charges. But before making a final decision, make sure to review the policy’s terms and conditions and give the insurance company a call to discuss your options. That way, you’ll be well-informed and can make the best decision for you and your family.
