Why You Must Have a Child Insurance Plan

Becoming a parent changes the entire outlook towards the future. A parent is responsible for a life's present and future security. Obviously, every parent wants to give the best possible to their child. For that the earlier they start thinking and planning, the easier it gets to build a secure future of their child.

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

Planning for the future of your child is not a child's play. It requires considerable amount of investment along with your efforts to work out the necessary details right from identifying the objectives to deciding on the asset allocation plans.

Providing desired education to the child is the utmost concern of every parent. And, rising cost of education is their major troubling element. Others are lack of knowledge, not enough savings, starting too late and so on. But the biggest worry a parent can have is the risk of his/her own death. Isn't it terrifying for any parent to leave his/her family without ample means to lead a comfortable life? Yes off course it is.

Here's the solution of this biggest worry: A Child Insurance Plan.

You must be thinking that why shouldn't you opt for a term plan instead of a child insurance plan as it offers a high cover at a low cost giving out a lump-sum amount to the nominee.

In case of a term plan, giving the lump-sum amount ends the policy right there but in case of a child insurance plan, the policy doesn't end there. The insurer continues investing this money on behalf of the policyholder waiving off all the future premiums. At specified intervals of time as per the planning of the policy, your child will get the money. This is the best way to ensure your children that even in your absence; their needs will be taken care of.

Child Insurance Policies can be market-linked allowing policyholders to invest in equities and debt or they can be traditional plans allowing investing in debt only. Premium paid in a child insurance plan is eligible for tax deduction under Section 80 C while the income from the plan is tax free under Section 10 (10D).

You may find a simple term plan less expensive and may think to invest the balance money in mutual funds instead of allocating a huge premium to a child plan. If you are thinking so then you are missing out on a crucial detail.

What if the parent dies after five years taking the policy? In that case, the term plan will pay the lump-sum amount and stop further investments but a Child Plan along with paying the lump-sum amount, continue investing on behalf of the policyholder. A child plan doesn't let the death of the parent hinder the investment plan for his/her child.

The higher cost of the child plans is justified as they give double benefits. These plans are structured to meet the requirements of child. So, take a child plan and make the future of your children secure even in your absence.

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