A child insurance plan is a kind of insurance policy that secures the future of your child. You are the policyholder and your child is the beneficiary.
For your child’s birthday this year, rather than spending on an exotic birthday cake, why not use the money to secure her future? Yes, that’s right. With just a few thousand rupees you can buy a child insurance plan and give your child a secured future. Take a look at the points mentioned below and get a better understanding of how a child plan works and why it proves to be a wonderful gift for your child.
What exactly is a child plan?
A child plan is a life insurance policy that a parent buys for a child. In other words, the beneficiary of such a plan is a minor child. The policy is usually a money back policy where, in the interest of the child, fixed amounts of money are paid out at regular intervals. As a parent, you can ask for the payouts to be at your convince. This could be at the time of your daughter’s school admission (at age 3), during her college admission (at age 18) and during her marriage (at age 25). This would not only secure her future, it would also lessen your financial burden at crucial times.
What are the benefits of a child plan?
There are many benefits of a child insurance policy. Some of them are:
- Waiver of premium: The biggest and the best advantage of a child plan is that the premium is waived off if the parent dies. The policy however continues and the child remains protected. The payouts also happen as decided. Apart from this the nominee also receives a death benefit to deal with the immediate requirements after the death of the policyholder. So even if you die before the policy gets over, you don’t have to worry about the benefits coming to an end. The insurance provider will simply start paying the premiums on your behalf, ensuring your child stays protected.
- Regular payouts: Like mentioned above, the feature of the regular payouts is a huge advantage. This helps you, the parent, to gradually build up a corpus for the major milestones of your child’s life. It keeps your finances in check and allows you to bring the best lifestyle to your child. This is vital and helps you in planning ahead. A college admission fee, 20 years down the line, will be much more than what it is today. With a child plan in place, you don’t have to worry about the affordability now or then.
- Tax benefit: All child plans offer tax benefits under Section 80C of the Indian Income Tax Act. So the premiums you pay for the plan are deducted from your taxable income and you get a tax benefit.
Child plans – The best gifts for your children
So as you can clearly see from the points mentioned above, a child plan is a wonderful insurance product that helps your child out at every step in life. It is quite scary for you as a parent to imagine what would happen to your beloved children if you were to die unexpectedly. A child plan assures you that even in your absence, your children would get the best that life has to offer. So rather than throwing a glittering birthday party and spending a huge sum of money on materialistic birthday presents, gift her the perfect birthday present this year – a child insurance plan. The gift would prove to be a boon and a blessing today and for the years to come.