Child Plans

• Tax benefit: Tax benefit might not be on your mind while insuring life but it is certainly an added bonus. The premiums and the payouts both offer tax benefits and exemptions as per the existing tax laws of section 80C and section 10(10D).

• Medical treatment: Hospitalization and medical care has become expensive today. So, when your child needs the medical aid; the child insurance plan comes to your rescue. By insuring your child's future through plans that provide such aid you not only safeguard their health but also save on huge medical expenses.

• Educational purpose: Child plan can be your superhero in disguise if your child wants to pursue his/her career at a premium college. Education has become expensive due to the rising inflation and so it is better to start early in order to reap the advantages of advance & timely planning by having your child's education plan secured.

• Collateral security: Child future plan can act as an added security against loans. In case of any need, you can use it to raise funds.

• Financial support: The policy comes with an added insurance benefit. So, when the parent dies the child/appointee gets the amount at the time of maturity along with an annual payout every year. This helps the child to manage financial requirements in the event of his/her parent’s demise.

How does Child Insurance Policy work?

First you need to decide the cover amount and then accordingly fill the application form. Next the insurance company will calculate the premium amount that needs to be paid as per your cover amount. Then you need to choose if you want to make a lumpsum payment or pay regular premiums. Once you have decided on the premium frequency, you can start your policy.

In an unfortunate event of the parent's demise, the child/appointee receives a portion of the maturity amount annually by the insurer and all the premiums thereafter will be waived of. At maturity, the child will receive the entire cover amount.

If the cover amount is never used until the maturity then the entire sum assured is given to the child. The parent can partially withdraw in case of an emergency for the child's purpose only.

Protecting your children from the uncertainties in this world might seem difficult but it isn't impossible. The steps you take today will have an impact on your child's tomorrow. While choosing one plan for your little one, you need to take a few factors into consideration to avoid any chaos later.

• Early start: It is always better to start early and take the step of securing your child's future and aspirations by investing and insuring. Most child investment plans in India offer maturity benefit and start giving out payouts at the key milestones of life. Your child reaps maximum benefits if you start investing early.

• Premium Waiver Benefit: In case of sudden death of the parent, the insurance companies waive the benefit. This is called premium waiver benefit and plays a crucial role after the parent’s unfortunate demise. As promised during the purchase of policy/plan, the child receives full benefit at maturity. This rider must be chosen if not inbuilt.

• Partial Withdrawal Option: There is no given time for any unfortunate events to occur, therefore, having the option of partial withdrawal for the child plan is always safe. The policy holder can withdraw a partial amount at any instance of emergency.

• Understanding the terms and conditions: It is mandatory to understand the terms and conditions before you sign the documents, especially when it comes to securing your child's future. This enables one to pay attention to any minute detail and a complete understanding of the clauses.

It is important to evaluate the characteristics and features of every plan. It helps one have a better understanding about the plan. Planning for your child's future is one of the most quintessential parts of a parent's life. Providing for your child and his/her dreams is one of the key benefits of child future plan.

• Premium amount: It is subject to sum assured and the amount of maturity benefit you opt for. So, one does not have to pay any excess amount and has a clear idea about the money being used in child investment plans.

• Premium Payment mode sum assured: The sum assured must not be less than 10 times your current income. The premiums can be paid monthly, annually, semi-annually, quarterly or single premium (paid just once). This gives you a proper breather in between your two premiums.

• Policy term: It is important to choose the term wisely. So, if your child is 12 years then it is wise enough to take a policy term for 6 years.

• Maturity amount: One needs to take various factors in consideration when deciding upon the maturity amount. So, it is better to take financial advisors help while opting for an amount.

• Waiver of premium: If the parent dies, the child gets the entire cover amount without having to pay any further premiums. This ensures that there is no financial burden on the child and he/she can live a secure and sound life.

• Partial withdrawals: It is best to choose a plan that allows you partial withdrawal because it would cover the additional expenses at some key moments of your child's life.