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10 Biggest Benefits of a Child Insurance Plan

10 Benefits of Investing in a Child Insurance Plan

With changing times and increased competition, any degree costs a fortune now. Add to it the uncertainties that are now part and parcel of our lives with the pandemic, job insecurity, and lifestyle diseases taking a toll – physically, emotionally, and financially.With changing times and increased competition, any degree costs a fortune now. Add to it the uncertainties that are now part and parcel of our lives with the pandemic, job insecurity, and lifestyle diseases taking a toll – physically, emotionally, and financially.

With all these dragging us down, saving for your child’s future requires considerable effort. If you dreamt of educating your child for the future, it requires a lifetime of commitment and a smart child insurance plan with low risks and high returns.

Merely using a bank fixed deposit for your child’s future is no longer enough, with ROI being very low, your savings would never outpace the inflation. With an effective child insurance plan, you can rest assured that your child’s future is secure and their dreams would come true.

Benefits of Investing in a Child Insurance Plan

1. Higher Returns

With guaranteed benefits, you can secure your child’s future and grow your savings at a higher yield than bank deposits.

2. Flexibility of Tenure

You can easily align your investments according to your child’s current age and plans by investing for 11 to 21 years.

3. Online Processing

Invest online for a child insurance plan from the safety and comfort of your home/office and secure their future.

4. Loan Against Policy

As it is a guaranteed plan, you can avail of a loan of up to 70% of the surrender value to tide over a temporary financial crunch. This way, you neither compromise your child’s future nor have to put yourself in a hard place. The interest rates on loans are transparent and linked to the 10-year GSec.

5. Start Small

As you are young, you can start with a small Sum Assured(SA) of as low as Rs. 25,000 and progress to larger amounts, depending on your premium paying capacity.

6. Life Insurance Benefit and Policy Continuance

In case of an unfortunate event, your child will continue to receive all the benefits as planned. The future premiums are waived.

The nominee would receive a lump sum payout to support your child in a time of need. The death benefit will never be less than 105% of all premiums paid thus far.

7. Bonus*

If the company declares any surplus or profits, the policyholders can participate in them in bonus. The simple annual bonus gets accrued with the policy if all due premiums are paid. The bonus is payable at maturity.

*In case of participating plans

8. Flexible Premium Payment term

You have the option to choose from “Limited Pay” or “Regular Pay” according to your needs and policy term. With regular pay, pay the premium for the entire policy term. However, with limited pay option, pay the premiums less than the policy term.

9. Save Tax

According to the prevailing rules, you can avail tax benefits under section 80C of the IT Act, 1961, on the premiums paid. However, these tax laws are subject to change from time to time.

10. Enhance Protection

Get protected against hospitalization, including the need for ICU and surgery, with Hospital Cash Rider. And to protect your family from the trauma of accidental death, add the Accidental Death Benefit Rider. Such riders are not mandatory and available at an additional cost.

Conclusion

You can pick any payout choice that suits your child’s needs between the Money-back option and the Endowment option. Many child insurance plans offer you to select your policy term. You can pick a policy term dependent on the age and needs of your child.

Disclaimer:

Tax benefits are as per the Income Tax Act, 1961, and are subject to any amendments made thereto from time to time
The article is meant to be general and informative in nature and should not be construed as solicitation material. Please read the related product brochures for exclusions, terms and conditions, warranties, etc. carefully before concluding a sale.
Make responsible financial decisions. Consult with your financial advisor before making any decisions on insurance purchase.

Suggested Plans

Bharti AXA Life Child Advantage

  • Choose between payout options that are based on your child's needs – Money back or Endowment.
  • Built-in premium waiver benefit
  • Flexibility to choose your Policy Term
  • Non-guaranteed annual simple reversionary bonus

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