Best Money Back Policy 2023 – Check Feature, Benefits and Eligibility for Money Back Policy
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The upbringing of a child is a huge task as it involves a lot of responsibilities. Apart from taking care of the regular expenses like food, nutrition, health, and a good lifestyle, you also need to look after the higher education and career of your child. All these require money and what can be a better option than insuring your child’s future with a term insurance plan or a child insurance policy. These insurance policies allow utmost peace of mind and support the child in their future endeavors despite your absence.
A child insurance plan is an investment especially designed to cater to a child’s future financial needs. Parents can buy such plans to cater to certain future goals like higher studies in the dream university abroad, a specific degree or course of his/her choice and so on. Further, the child insurance plans also offer life coverage wherein if the policyholder (parent) dies during the term of the policy, the plan offers death benefit to the child.
A term insurance plan is a pure form of life insurance that simply covers the life of the insured without allowing any investment benefit. The term plan is bought for a specific duration of time and offers the nominee of the plan a death benefit in case the insured of the plan dies during the policy tenure.
Read More: How Is It Beneficial To Buy Term Insurance Online?
Know More: Waiver of Premium Rider in Term Insurance – A Detailed Guide
Here are the basic differences between best term insurance plan and child insurance policies as mentioned in the table below:
Child Insurance Plan | Term Insurance Plan |
Provides coverage on life as well as maturity benefits | Provides coverage for life only and no maturity benefits |
Aims to secure the future of the child financially | Aims to secure the financial future of your family members and loved ones in your absence |
The plan beneficiary is the child | The plan nominee can be anyone in the family including the child |
The premium price is higher because of the maturity benefit option | The premium price is relatively low because no maturity is offered |
A child plan comes with death benefit (if the policyholder dies) as well as maturity benefit if the policyholder outlives the plan | A pure-term plan allows only death benefit and no maturity is offered here, except on TROP (Term Return of Premium) Plans which allow maturity benefits |
Unit-linked child plans allow partial withdrawal | The term plans do not allow any partial withdrawals as these plans have no saving element |
Tax benefits are available under child plans | Tax benefits are available under term plans. Also, tax exemption on critical illness riders is available if opted for under term plans. |
To Conclude
There are few key differences between Term plans and child insurance plans. But one main point of similarity that these two have is regarding the plan intent. Be it a child plan or a term plan, both of them are designed to allow financial security to your family and kids during a time when you are not around. However, child plans are especially meant for the better future of your child and to secure the career of the child. On the other hand, term insurance plans are purchased to allow monetary stability to your family as a whole. So, it is up to you to choose a plan that suits your purpose better.
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PayBima Team
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.
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