Just like any other insurance policy, the child plan works quite similarly. It is preferred first to pick coverage money, which is suitable for the child’s future and the parent’s financial affordability. Now, one will have to pick a policy provider like lic for baby girl plan, who will then decide a premium amount to be paid either on regular terms or in a lump sum.
After the premium amount is fixed, now is the time to pick the right policy type. In the policy type, one will have usually two choices:
1. ULIP: unit-linked insurance policy is the one where one can choose where money will be invested. This is risky and is usually for those who have a higher risk appetite.
2. Endowment: This policy type is a saving type plan, in which the money is invested in the debt instruments chosen by the provider. This is a low risk policy.
When choosing a policy type for children like LIC kanyadan policy, one should look for these few features:
1. Premium amount: this will decide how much one will have to pay in regular intervals or lump sum.
2. Benefits: This will decide what all benefits one will get within the policy term and after maturity.
3. Riders: one can always add riders to the policies to enhance the benefits.
4. Payout: in some policies, one will get regular payouts in intervals, and someone will get a lump sum to cover a certain expense.
5. Extra benefits: in some plans, one will get partial withdrawal benefit and loan benefit along with tax benefits.