Every parent wants to secure their child's future and offer the best that they can. Nothing is more important for a parent than the safety and well-being of their children. Getting a Child Insurance policy makes this easier to meet the financial demands posed by rising higher education costs, vocational expenses, and even marriage.
A child insurance policy is a secured fund that is built for specific financial needs expected to arise at various milestones in the child's future.
In case of any unfortunate event that might threaten a particular requirement in the child's future, the proceeds from a child life insurance policy come to their rescue
With volatile markets, most investors remain skeptical about the best time to invest and try to 'time' their entry into the market. Rupee-cost averaging allows you to opt out of the guessing game. Since you are a regular investor, your money fetches more units when the price is low and lesser when the price is high. During volatile period, it may allow you to achieve a lower average cost per unit.
Various types of child insurance products are available in the market today. Child plans differ across insurance companies.
Based on the individual's personal financial plans, they should evaluate the amount of money that they are willing to set aside for the particular financial goal. Based on the length of the premium payment term, most of the child insurance policies are categorized into two types:
In the Regular Premium Scheme, the annual premium payments are made until the child turns 18 years old. Post this the insurer pays back in installments for four years.
Generally, the life of the parent is covered under the policy. If the parent dies before the maturity of the policy, the premiums are waived off, and the insurer keeps the policy running until maturity. Hence, in case of the parent's death, the child receives a sum assured; otherwise, you can withdraw the money as and when required.
In case of Single Premium Scheme, a lump sum amount is paid while purchasing the policy.
Each child insurance plan has specific features (and optional extra benefits called Riders), that make it unique. It is best to choose a plan that best satisfies your financial goals.
An experienced and ethical good financial planner can help you ascertain the inflation-adjusted amount that you should have as the sum assured. You can start slow and keep increasing the money you invest every year.
Children's life insurance plans are wonderful tax-saving tools also. You are allowed to claim the premiums as exemptions while calculating taxable income. These exemptions are defined in Section 80 (C) of the Income Tax Act.