Tax Saving Child Insurance Plans

Tax Saving Child Insurance Plans

Every parent loves their children and they are their topmost priority. Moreover, parents want their children to achieve what they have dreamt of and for them to achieve all they want, parents do everything they can. It is imperative for parents to keep in mind both long term and short-term goals of their children, such as education, marriage, their interests, etc. and then plan accordingly. In today's time, it is crucial to be well prepared in advance, keeping in mind the increasing cost of living and inflation. Therefore, investing your hard-earned money is essential for a better and secure tomorrow. Planning for your child's future well in advance saves you from stress and worry in the future and doesn't let the financial burden fall upon your child.

A child insurance plan is one of the crucial and most recommended ways to secure your child's future. Child insurance or a child education plan financially secures your child and gives him wings to achieve his dreams even in your absence. We all know there is no warming when it comes to unforeseen and unfortunate events, including the policyholder's death. Therefore, it is necessary to secure your child's future.

Let us first understand what a tax-saving child insurance plan is?

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.

Tax Saving Child Insurance Plans for Your Child

You should go for a leading and trusted insurance providing company. It should provide the ideal child insurance plan with exclusive benefits. The company should offer child plans that meet the needs of your child even if you are not around. When you buy an insurance plan for your child, the policy will be transferred as soon as he turns 18 and your child will become the policyholder.

Under Section 80C and 10(10D) of the Income Tax Act 1961, the premiums paid by the policyholder are eligible for tax benefits up to Rs. 1.5 lakhs annually and returns on maturity are tax-free as per Section 10 (10D). However, tax laws are subject to change from time to time.

Some of the payout options :

1. Moneyback Option

A child insurance plan provides the policyholder with a moneyback option that provides your child with guaranteed 5 years payouts before maturity so that your child does not face financial restriction and can seamlessly continue with his education and can easily achieve his goals.

2. Endowment Option

Under the endowment payout option, your child will get a lump sum amount at the policy's maturity, which will enable your child to achieve his dreams and continue with his education without any hindrance.

Our Intake

Tax saving child insurance plan is necessary to secure your child's future even when you are not around. It provides a financial backup to help your child seamlessly complete his education and kickstart his career without facing any difficulties or setbacks in case of an unforeseen financial emergency. Moreover, a tax saving insurance plan gives the parents peace of mind and security for their child's future.

Disclaimer:

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

Consult with your financial advisor before making any decisions on insurance purchase.

Tax benefits are as per provisions of Income Tax Act, 1961, and are subject to change from time to time.

Suggested Plans

Bharti AXA Life Guaranteed Income Pro

  • A Non-Linked, Non-Participating Individual Life Insurance Savings Plan
  • 4 Income options to choose
  • Guaranteed 10% Addition of Annualised Premium (as per the terms and conditions of the policy)
  • Get all your premiums back at the end of the payout period under Long Term Income and Deferred Income variants
  • Flexibility to choose premium payment term or policy term

Bharti AXA Life Super Series

  • A non-linked non-participating individual life insurance savings plan
  • Range of investment duration and returns
  • Guaranteed money back benefits (provided policy is in force and all due premiums have been paid)
  • Income tax benefits (as prevailing tax laws in India that are subject to changes)

Bharti AXA Life Shining Stars

  • Non-linked, non-participating limited pay endowment Life Insurance plan
  • Designed to take care of the financial needs of your child.
  • Flexibility to opt between 2 Maturity Payout Options
  • Flexibility in Policy Term/Premium Payment Terms
  • A great short-term investment option for a child insurance policy.

FAQs for Tax Saving Child Insurance Plans

What is a tax saving child insurance plan?

A tax saving 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.

Why should one 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 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. Consequently, it is vital to ensure your child's future with a tax-saving child insurance plan to provide security for your child even when you are not around.

What are the benefits of investing in a tax saving child insurance plan?

A few of the benefits of investing in a Tax Saving Child Insurance Plan are –

  • Death benefits
  • Rider benefits
  • Tax benefits
  • Maturity benefits
  • Financially secure your child's future
  • Secures your assets, etc.