Being a responsible parent, you would always give your child the best of everything. Rather than investing on an ad-hoc basis, it is vital to put a plan in place to ensure your child will have a secured future. The cost of education in India is rising at a fast pace. Parents are finding it difficult to pay for the growing fee structure & other associated education costs. With the surging cost of education along with the high inflation rate, you will fall short of funds. Considering the cost estimate, you need to accumulate a huge corpus to fund your children’s higher education. In order to secure your children’s goals, you need to invest in a Child Insurance Plans.
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Know About Child Plan
A Child Insurance Plan offers a lump sum payout immediately in the event of your demise and the policy still continues. The insurance company will waive all the future premiums. Under a child insurance plan, your child will receive payouts to fulfill the child’s education needs. You must put a guard for your child’s future against a mishap such as your untimely death or a serious illness.
Benefits of Investing in a Child Insurance Plan
- Death Benefit: A child insurance plan offers sum assured death benefit to ensure financial security for the child.
- Maturity Benefit: At maturity, your child will receive the sum assured plus guaranteed benefits.
- Periodic Money Back: This plan offers periodic payouts at regular intervals to help a child to meet his/ her financial requirements.
- Guaranteed Additions: Guaranteed additions are added to the sum assured in traditional child policies and as additional fund units in the unit-linked child plan. Usually, you will receive this benefit at the maturity of the policy.
- Partial Withdrawals: It provides the option to make partial withdrawals. With this option, you will be able to meet the financial requirement.
- Tax Benefit: By purchasing a child insurance plan, you can avail the tax deduction for the premium amount u/s 80C and the payouts under the plan are tax-free u/s 10(10D) of the Income Tax Act, 1961.
Choose a Right Child Insurance Plan
You need to assess the requirement of funds that will ensure to fulfill the financial liabilities for your child. By assessing the financial requirement for your child, you can opt for the right cover to fulfill his/ her financial goals. When you are choosing a child insurance policy, it is important to pick the right policy tenure. An ideal policy term will help to provide an adequate fund at various milestones to fulfill the child’s financial needs.
When buying a plan, you must also consider the rate of inflation and should invest in a plan that can assure you to provide adequate funds for your child.