Child Education Plans Vs. Child Insurance Plans

As a parent, the first two things that come to your mind when thinking about your child's future are their education and health. Planning for teaching is essential as advancements are occurring everywhere, and our educational system is becoming more complex. Although there will be a tendency to prefer one over the other, both are important and warrant serious evaluation. Child Insurance and Education plans are discussed in this article to assist you in choosing the best option for your family.

An insurance strategy called a child education plan can help you set aside money for your child's future expenses. It provides a lump sum of money when your child reaches a certain age, usually 18 or 21, which your child can use to pay for their tuition fees, accommodation, and other associated costs⁴.

Your child's education plan will depend on your specific requirements and circumstances. There are a variety of options available. For example, some programs allow you to make regular monthly or yearly payments into the policy, while others require you to make a one-off payment. Some policies also include other features, such as the option to top up the treatment if you have extra cash on hand or to borrow against the Insurance if you urgently need additional funds.

Child insurance is a life insurance plan that covers your child until they reach adulthood. It is to offer financial security if your child passes away. Education costs are only one possible application for a child insurance plan's death benefit. The child's parents or guardians are the policy owners, and the child is the insured. Child insurance can be used as a savings tool, as the policy's cash value can help pay for the child's education or other future needs ⁵.

When you enroll in a child insurance plan, numerous benefits exist. The most important reason is to ensure that your child can get life insurance as an adult, even if they have health issues. If you purchase a child insurance plan and keep it in force until your child is an adult, they can convert it to a regular life insurance plan without undergoing any medical exam. This plan can be precious if your child has health problems that make it difficult or impossible to get life insurance as an adult.

Another reason is to use it as a savings tool. The cash value portion of many child insurance policies increases over time. You can use this cash value to help pay for the child's education, help with a down payment on a home, or other future needs.

If you are considering a child insurance plan or Child Education Plan, there are a few things you must know:

• Age criteria:

  
  Age is the most crucial element you should consider while providing your child with health insurance.
  a. Newborn:
  After 90 days after delivery, many health insurance policies start covering children; specific policies may have a more extended waiting period. Therefore, you should either purchase a separate maternity add-on with your health insurance plan or search for a plan with maternity coverage if you wish to cover a newborn.
  b. Young adults:
  Children under 25 are often covered under health insurance plans. It makes sense for the kids to have their health insurance as soon as they start earning and begin to pay their premiums so that they continue the plans further.



• Guaranteed¹ premium benefits and coverage:

  
  It would be best if you compared the premium to the amount insured and the benefits provided. Using the premium calculators found on the insurers' official websites, you can quickly compare the premiums of different health insurance plans.
  



• Waiting period norms and rules:

  
  Along with the claim settlement ratio, other factors to take into account include the company's goodwill, the number of years it has been in operation, the solvency ratio, which indicates the company's capacity to pay its short- and long-term liabilities, and the volume of policies it issues annually.



• Hospitalisation benefits:

  
  Although the maternity plan covers the cost of delivery, there may be numerous other costs later on, such as inoculation, immunisations, etc. To ensure that all of these costs are covered by the insurance, getting a maternity plan or add-on cover makes sense. Verify if the insurer's network hospitals include your preferred hospitals.



• No-claim-bonus:

  
  Insurance with a lower premium is frequently chosen by consumers, even though it might not offer a sufficient sum insured. This sum defeats the purpose of having health insurance because you will ultimately be responsible for covering any additional medical costs out of pocket. As a result, it's crucial to ensure your child has enough insurance coverage to cover all medical expenses.



• Health check-up facility:

  
  The procedures and circumstances covered by a health insurance policy constitute the policy's coverage. Make sure the child's health insurance plan covers all the essential and conceivably necessary functions and circumstances. With broader insurance coverage, you'll be guaranteed¹ financial assistance for most ailments.



• Claim process:

  
  The claim settlement procedure should go smoothly and quickly. Additionally, the insurance provider should offer efficient customer service. The ratio of claims successfully resolved to those filed in a given year is known as the claim settlement ratio. A high claim settlement ratio indicates your chances of settling your claim.

Your age, salary, and lifestyle affect how much coverage you receive. As a result, you must compare the available coverage amounts of several child insurance policies before selecting the one that provides the broadest range at the lowest premium cost. You should choose a child plan that provides the most excellent maturity benefits for the particular premium paid.

While both Child education and insurance plans offer the policyholder and the transparent child edges, there are differences in the duration, the maturity time, and the tax benefits² covered. You can choose either option to safeguard your child's financial future after knowing the help you anticipate from your child's plan.