Investing in a child investment plan as soon as possible has numerous benefits. Investing early will help you save a larger lump-sum amount for your child's future. You will be able to generate more wealth and save more on taxes.
Investing in a child investment offers certain tax deductions. You can claim up to Rs. 1.5 lakhs of tax deductions in one financial year under Section 80C of the Income Tax Act, 1961. However, tax laws are subject to change from time to time.
Plan Your Child's Goals and Financial Requirements in Advance
Our children have different goals and financial requirements. Some may want to go abroad and pursue their education, while some may want to start something of their own. Before you invest in a child investment plan, ensure that you have an idea about your child's future goals and estimated financial requirements.
Select a Plan that Offers Waiver of Premium
Life is full of uncertainties. We never know when we might come across an unfortunate and untimely demise. This will leave our children with financial constraints, and we do not want that. Opting for a child investment plan that offers a waiver of premiums will ensure that even if you are not around to help them financially, your children will not have to face the hassle of paying the premiums.
Make Sure that the Plan You Choose Offers Partial Withdrawals
We never know when our children may require some amount of money for education or pursuing their dreams. Investing in a child investment plan that offers partial withdrawals ensures that we are able to financially back them up in case of emergencies without any hassle.
Choose a Nominee
If you face an unfortunate demise, and your child is not of legal age, he or she may face problems while claiming the amount from the policy. Therefore, it is important for you to appoint a nominee so that your child does not face any inconveniences when you are not around.
Investing in a child investment plan will provide financial security to your child and ensure that you are able to live your life with peace of mind. Moreover, with this, your child will be able to turn his or her dreams into reality without having to face any struggles.