Difference Between Child Insurance and Term Insurance

Difference between Child Insurance and Term Insurance

As a parent, it is natural to be worried about your child’s future. You’d always want to ensure that they receive the best, be it education and life, even in your absence. Every individual plans their finances in a way that the loved ones are financially protected if anything were to happen to them.

So, if you are planning to start a family soon or have just started one, what you need is an insurance plan that will help you secure your family’s financial future. When researching further you will realise that there are several insurance plans available that are designed to fulfil to your needs.

Child insurance and term insurance plans are two popular insurance products that help parents secure their child’s future. But many times, people get confused about whether they should invest in a child plan or term plan. So, to safeguard your child’s future, it is crucial to understand what these two plans are and the difference between them. Let us begin!

What is a Child Insurance Plan?

A child insurance plan acts as an investment and life insurance cover that helps in the well-being of your child’s future over time. There are multiple child plans available in the market. When it comes to child insurance, parents are primary policyholders, and the children are the beneficiaries.

The investment component in the policy helps cover the cost of your child’s higher education or marriage based on the returns earned. Whereas, the life insurance component secures the financial future of your child in the event of your sudden death.

What is a Term Insurance Plan?

Term insurance is a type of life insurance product that primarily secures the financial future of your loved ones in your absence. Here, the policy can come in handy to protect your child’s future as well.

Ideally, term insurance provides a lump sum amount to the beneficiaries of the policy after the policyholder’s death. The amount received can be used by the dependents of the deceased as and when needed. On the other hand, term insurance is also the most affordable life insurance product available in the market.

Unlike a child plan, you can buy the policy at any life stage and customise it as you expand your family. For that, the insurers in India allow you to enhance the scope of the policy with rider benefits. A term insurance plan secures the financial future of your children and other family members as well.

Difference Between Child Plan And Term Plan

The table below will help you understand the difference between child insurance and term insurance.

Conclusion

Based on the pointers discussed above, you must now know the difference between child insurance and term insurance in general. If you solely want to contribute towards your child’s financial security, investing in a child plan is a wise decision. However, if you're going to safeguard your entire family (spouse, children, and parents) financially in your absence, term insurance is an ideal choice.

You can buy term insurance plans at Bajaj Markets and benefit from features such as extensive coverage, rider benefits, affordable premiums, hassle-free claim settlements, etc. Moreover, you can purchase term plans using the Bajaj Markets App at any time and anywhere.

You can read more about term insurance benefits by visiting Bajaj Markets website.