4 Reasons Why You Need to Invest in Child Insurance Plans
As a parent, you wish to fulfil all dreams of your child
and provide him/her with the best of everything.
However, the needs of today’s children are very
different from what it used to be, which calls for being
financially prepared more than ever.
Equally important is to ensure that the needs of
your child aren’t compromised in your absence. Child
insurance plans not only help you meet all the needs of
your child but also secure his/her future financially
when you are no longer around. Read on to know four
reasons to invest in child insurance plans.
01Helps you save and build a corpus for your child’s higher education
The cost of higher education in India has gone up
significantly over the past few years. According to
rough estimates, education inflation is about 10-12%
[1] on an annual basis.
Even considering a conservative estimate of 6%
[1], an MBA course costing around Rs. 10
lakhs today would cost approximately Rs. 34 lakhs after
21 years. The amount will easily run into crores for the
same course abroad. Child insurance plans help you save
and accumulate the required funds needed for your
child’s higher education.
The Aditya Birla Sun Life Insurance Child’s Future
Assured Plan offers exclusive education milestone
benefits whereby you can choose the tenure of pay-outs
in line with your child’s education milestones,
including high school and graduation. Payable as a
percentage of the sum assured, it ensures you can have
the required money for admission when your child enrols
for high school and graduation.
02Provides financial aid for your child’s marriage
Why should funds be a scarcity in making your child’s special day truly memorable? Investing in child insurance plans provide financial assistance to your child in making their dream a reality.
03Gives peace of mind
As you plan for your child’s future you are the life insured while you child is the nominee. In case something was to happen to you, the waiver of premium feature kicks-in and all the future premiums are waived off. However, the policy continues to be in force till maturity giving all the mentioned benefits. It thus gives you the peace of mind as you know your child’s future needs won’t be compromised even in your absence.
04Riders for comprehensive coverage etc.
While the waiver of premium is one of the most common riders available with child plans, there are many riders that you can add to the plan for comprehensive coverage. By paying a nominal premium for the riders, you can strengthen the coverage.
05Provides tax benefits under section 80C and 10(10D)
Lower your tax outgo by investing in our child plan as investments up to Rs. 1.5 lakhs qualify for tax deduction under section 80C of the Income Tax Act, 1961. The maturity pay-out at the end of the policy term or on death is exempt from tax under section 10(10D). Tax benefits are subject to changes in tax laws.
In conclusion
As evident, child insurance plans not only help you
address varied needs of your child but also gives you
peace of mind knowing that your child is financially
secured even in your absence. Compare different plans
and choose the one that best fits in your scheme of
things.
Sources:[1][2] Economictimes
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