Why Buy A Child Plan?
Parent’s responsibility starts with the birth of a child and continues throughout life. From providing the best education to ensuring financial security (in case of an untimely demise), a parent’s responsibility ends with no bar. However, taking care of a child is expensive and needs proper planning. In this endeavor, to safeguard children’s interests, child plans come in handy to shoulder the duty.
What Does It Mean By Child Plans?
A child plan or a Child insurance plan signifies the combination of an insurance and investment (savings plan) product. The investment part creates a corpus for future requirements (education, marriage) of children while insurance secures a child’s future through life cover benefits(in case of untimely demise). Not only that, the child plans are an easy and simple way to meet the expenditure at the crucial junctures of children’s education through flexible pay-outs.
Child plan ensures that the financial insecurities due to unprecedented events do not hamper your child’s bright prospects.
Why Buy A Child Plan?
A corpus created through simple savings often falls short in the future as the rising inflation and increasing cost of living eats into your savings. This may take a toll on the expected expenses to be incurred on your child’s higher education in the future. Child plans give the flexibility to invest based on your financial goals, child education needs, and other requirements. The other advantages of a child plan include:
A safety net with life cover benefits.
Partial withdrawal facility to meet emergency requirements
Tax benefits on premium paid.
What Is The Importance Of Child Plans?
Child plans have significant benefits and serve the future financial needs of children in the following ways:
Future financial security
In the case of a parent’s unfortunate death, the child’s plan ensures the children’s financial security. The plan’s maturity benefits are provided to the beneficiary as promised, even if the parent dies.
Waiver of premium
In the case of the parent’s death during the term plan, there is a provision of waiving of the future premium of the plan. Hence, not just maturity benefit to the family, even waving off the future premium is ensured.
Saves taxes
Under section 80C of the IT act, a child plan premium of up to Rs.1.5 lakh is tax-free. Even the maturity benefit or death benefit is also exempt from income tax.
Discipline savings
Consistent investing in a child plan helps create a corpus to meet your children’s future financial needs. Regular disciplined savings helps in giving the best possible returns in the long term.
Maturity date customization
An investor can select the maturity date as per his/her convenience. This will help to meet the financial requirements at the due time.
Systematic withdrawal
An investor can pre-define different stages when money is required by an investor to meet financial requirements. Thus, a partial money withdrawal facility is available.
Loan facility
The child plan also comes with a loan facility in case of an immediate fund requirement.
Documents Required For Buying A Child Plan
Age proof – Birth certificate, passport
Identity proof – Aadhar card, PAN card, Voter ID
Income proof – The income proof of the investor
Address proof – Driving license, Ration card, Utility bills (telephone, electricity, water)
Conclusion
Child plan gives financial security so that children can pursue their dreams with confidence. The money available at regular intervals and at the time of maturity can fulfill future fund needs so that your child can explore life without worries.
