What is Tax Saving Child Insurance Plan?
A child insurance plan is a financial plan which provides dual benefits of investment and financially insuring your child's future and providing him with the freedom to achieve his dreams without facing any financial constraints. With a child insurance plan, you can be free of any worry and your family will not have to face financial restrictions even in your absence.
Investing in a child insurance plan at an early age is way more beneficial than investing in it later. Investing at an early age gives you the benefit of early investment and insure more money for a longer period of time.
Why is it essential to invest in a Child Insurance Plan?
For every parent, his child is the top priority. Therefore, securing your child's future and giving them the freedom to achieve their goals without any constraints is crucial. In today's time, where the cost of education increases rapidly, financial planning is necessary. A child's plan is therefore essential to secure your child's future. Unforeseen and unfortunate events like a parent's death do not warn you before coming.
Benefits of Investing in Child Plan for Education
1. Financially Securing Your Child's Future
A child plan for education financially secures your child's future and keeps their dreams protected from any financial constraints. Moreover, the child will be financially secure while achieving long term goals such as higher education, marriage etc.
2.Secure Your Assets
Making sure your child achieves his dreams may sometimes cause parents to take a loan. This might financially burden your child in future in your absence. In order to repay the loan, your child might have to repay it against your assets such as a house, car, etc. In order to secure your assets in future, investing in a child plan for education is recommended and is beneficial.
3. Tax Benefits
Under Section 80C of the Income Tax Act, the premiums paid by the policyholder for a child education plan are eligible for tax benefits. However, tax laws are subject to change from time to time.
4. Dual Benefits of Investment and Insurance
In today's time, insuring your money is not enough. It is crucial to invest your money in a child insurance plan as investing in a child plan not only financially secures your child's future but also helps you invest your money. Therefore, a child plan provides you with dual benefits of insuring your child's future and investing your money for growth.
5. Maturity Benefits
With a child plan, you can claim benefits on the maturity of the policy. The child plan provides enough financial security to make sure that your child does not face any financial constraints in his life, even in your absence.
6. The benefit of Partial Withdrawal
While your child is on his way to achieving his dreams, a child plan gives you the benefits of partial withdrawal in case of an unforeseen financial requirement. This fulfils the financial requirement at every stage of a child's life. The terms of the benefit depend on the policy chosen.
7. Rider Benefits
A child insurance plan may offer accidental death rider benefits wherein 100% sum assured is provided in case of an unfortunate accident of the parent (policyholder in this case). Another rider benefit includes the hospital cash rider benefit. With this benefit, the policyholder can claim a fixed amount of benefit for hospitalization. It also offers benefits in case you are admitted to an Intensive Care Unit (ICU) or going through surgery. However, riders are not mandatory and available at an additional cost.
8. Flexibility to Choose the Term of Your Policy
Generally, a child insurance plan offers you the benefit of choosing the policy term between 11 years to 21 years, according to the requirements and needs of your child. Usually, the policy term needs to be selected at the inception of the policy.
9. Death Benefits
In case of the parent's untimely and unfortunate death (i.e., the policyholder), your child might face a financial burden. This might cause a hindrance in letting him achieve his goals, including higher education, extracurricular activities, marriage, etc. A child insurance plan provides a lump sum amount on the death of the policyholder in the form of death benefits. This enables your child to seamlessly move towards his goals without having to worry about the financial aspect. Therefore, investing in a child insurance plan will secure your child financially and let him achieve his goals and dreams without facing any monetary constraints.