Youth is the hope of our society, and every parent endeavors to equip their children with enough resources to succeed in life. The Child Money Back Policy is a one-of-a-kind scheme developed to meet the demands of growing children and help with obstacles in the future, such as education, weddings, and so on.
As a parent, your first responsibility is to safeguard your child’s future, and investing in a child money back plan is an ideal place to start. A child money back policy not only provides the safety net you want for your child, but it also provides you with investing rewards.
What Are the Key Features of A Child Money Back Policy?
The following are the key characteristics of the child money back policy:
- Because the plan shares in the company’s profits, it receives straightforward reversionary compensation for the duration of the policy.
- The last bonus may supplement the plan’s payouts on maturity or death.
- The policy ensures the life of the child, and a child’s parent or grandparent can purchase the policy and become the policyholder.
- The plan has an optional rider that can be added to the coverage for an extra price.
- You have the option of deferring your survival benefit, in which case your standard benefit will be enhanced.
- Money-back benefits are given to children when they are most in need of financial support in life.
Why Do You Need To Buy A Child Money Back Policy As A Parent For Your Children?
The following are 8 reasons why you should buy a child money back policy to safeguard your child’s future:
1. Survival Benefit
If the Child Money Back Plan is in place, and the life assured survives every policy anniversary that coincides or is followed by the completion of 17, 20, or 22 years of age, up to 20% of the money guaranteed will be payable on either of the occasions.
2. Death Benefits
If a policyholder dies before the risk period begins, a sum equal to the premium payments is paid. If the proposer dies after the risk period begins, the death benefit amount will be paid, which includes the Sum Assured on Death + Accrued Bonuses + Final Additional Bonus.
3. Waivers for Premiums
A child money back policy also gives the option of keeping it in force even after the policyholder’s death. When you add a Premium Waiver to your standard child money back plan, you assure that no premiums are due once the primary policyholder, you, passes away. As a result, even if you die unexpectedly, your child can continue the plan for their future.
4. Profits Participation
What is the Return of Investment related to participation? When the policy is in effect, it will share in the company’s profits and be eligible for simple reversionary incentives based on its performance. However, as long as the policy is paid up, the bonus is not paid. Similarly, if the policy has not been claimed by demise or maturity during the year, the final additional extra compensation will be issued under the policy.
5. Ease in Attaining a Loan
If you need money, you can take out a policy loan. Loans are only permitted after the plan has reached its surrender value. The surrender value of your policy determines the loan amount, and you can borrow a portion of the surrender value as a loan. The amount of the loan that you can take as a percentage of the surrender value is determined by the respective bank.
6. Advantages of Maturity
The policyholder will get the Sum Assured plus up to 40% bonus when the child money back plan matures. Meanwhile, extra compensation is paid in addition to the Principal Sum Assured and Final Additional Bonus if the policyholder dies during the child money back policy term.
A death benefit of less than 105 percent of the total premium paid is not allowed. However, if the policy has a surrender value and is subject to the terms and circumstances, a loan can be taken out through the respective bank.
7. Protection from Life-Threatening Illnesses
If your family has a history of severe sickness, it is recommended to acquire a child money-back plan while your child is still healthy. Then, if your child, God forbid, becomes afflicted with one of these diseases later in life, the money you put into the child money-back plan will come in handy in addition to your health insurance.
8. Surrender Value
Individuals may surrender their insurance policies for an assured surrender value after a specified period of time, typically three years. As a bonus, some insurance providers even offer a premium refund on large premium amounts, which can help save you a significant amount of money over time.
Ironically enough, it’s every parent’s dream to ensure that their child achieves their dreams. And to do so, it is essential to plan for his or her financial future now. Set aside money for your children’s futures as a result. To put it another way: if you pass away too soon or a financial crisis happens in the future, your child may find themselves without the resources they need. Child money back plans coverage may be useful in any such situation. If you are concerned about your child’s financial well-being, consider opting out of child money back plan for your kid to have a secure future.