The reality: The most common myth surrounding child plans is that the life insured is the child. Most child plans insure the life of the income-earning parent, and not the child. The benefit associated with such a plan is that the child’s dreams are fulfilled, even if the parent is no longer around.

The reality: Many child plans carry features such as Family Income Benefit which ensures that periodic payments are made to the family, to take care of the child’s educational needs. Plans that offer the Funding of Premium benefit ensure that all future premiums are borne until maturity by the insurer and the maturity benefit is paid to the beneficiary. These benefits are in addition to the lump sum that is paid out immediately upon the death of the insured.

The reality: Market-linked child plans to invest your money in a fund of your choice in order to generate higher returns. Certain plans offer Guaranteed Loyalty Additions whereby a certain percent of the fund value is added into your investment fund every year, upon completion of a certain number of years. Features such as the Dynamic Fund Allocation also ensure that you follow a more aggressive investment strategy, which gives you higher growth during the initial policy years.

The reality: Child plans are flexible. In traditional child plans, pay-outs are made at fixed intervals, to coincide with the major events in the child’s life. A market-linked plan will give you the flexibility of making partial withdrawals after the completion of 5 policy years.

The reality: In a market-linked child plan, all charges are clearly spelled out. The policy document gives you a break-up of the various charges and the amount invested. You also receive a regular statement of your holdings, which you can monitor.

When it comes to investing for your child, do not go by hearsay and take an informed decision. Visit Axis Max Life’s Child Plans section to learn more about Child plans and to start investing.