Benefits of Waiver of Premium Rider in Child Education Plan

A child insurance plan serves the dual purpose of investment as well as insurance that helps in planning your child’s future financially like higher education at the correct age. These insurance plans need the accumulation of money over a time period and then upon maturity, a total or lump sum amount is paid to a child that assists in covering their educational expenses.

Meaning of Waiver of Premium Rider

A waiver of premium rider is an add-on cover that is bought to increase the worth of your life insurance plan. With the help of this add-on, your child continues receiving each of the benefits offered under the plan, even when you are gone. In the venet of an unforeseen incident like injury or disability because of an accident, the waiver of premium add-on takes care of all the future premiums that needs to be paid in the future. It also makes sure that the premiums paid are waived off, if you lose the only earning member due to an injury or illness.

Also read - How to Plan for Your Child Education Fund?

Benefits of Waiver of Premium Add-On

The following benefits are offered under waiver of premium add-on cover:

1. Waiving Off Future Premiums: In the event of death, critical illness or total permanent disability, all of your future premiums payable would get waived off and then you would not have to pay for any future premiums towards your insurance plan.

2. Safety Against Critical Illness, Death or Total Permanent Disability: In case the parent gets diagnosed with a critical illness like kidney failure, cancer, heart stroke, etc and dies untimely during the plan tenure, then waiver of premium rider add-on assists the child in covering the remaining premium amount.

3. Tax Benefits: You can receive tax benefit on premium payable against the term insurance plan including waiver of premium add-on. The premium payable towards riders are exempt from tax  up to Rs 1,50,000 as per section 80C of the Income Tax Act.

4. Plan Does Not Lapse: By including a waiver of premium add-on ensures that your insurance plan does not lapses due to an unforeseen event. With this add-on added with your standard insurance plan, you can always worry—free regarding the future of your child.

5. Budget-Friendly Premium Rates: There are various insurance companies that offer a child insurance cover that has an in-built waiver of premium add on. This can also be added to the current base plan in the event of its unavailability.

You may also like to read - What are the factors to be considered while purchasing child life insurance?

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.