Is it Compulsory to Buy a Child Insurance Plan?
Published On Nov 17, 2021
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A life insurance policy can provide a reliable supply of capital for retirement, financial assistance for a child's schooling, or even serve as a source of income. When a family has a crisis, the child is generally the most impacted family member since his or her education is jeopardized. Unfortunately, there is no way to make up for lost time. A child education insurance policy can assist to limit risks, allowing education to continue uninterrupted. Child insurance policies might assist you in maintaining this continuity. This Child's life insurance policy has a single purpose: to assist your child in achieving their goals even if you are unable to do so.
5 Reasons To Buy A Child Insurance Plan
Here are five additional compelling reasons to get a Child Insurance Plan.
1. Protection Against Disabilities
The uncertainty of life is one of your biggest hurdles as a parent. Your ability to earn the same amount of money may be harmed if you have a major impairment. The finest Child insurance policies in India alleviate this danger by covering all future premiums, allowing the youngster to continue his or her education.
Must Read: Which Plan is the Best for My Child ?
2. Assists in the Achievement of Future Objectives
The equity-debt arrangements in some child insurance policies are dynamic and balanced. Experienced fund managers guarantee that you get the highest potential return on your investment. Auto funds rebalancing options are available in certain plans, which maintain an allocation in a specified percentage regardless of market moves. Most Child plans have very strong returns because of large investments inequities, and they virtually always outperform inflation in the medium and long run. This not only prevents the money from eroding, but it also significantly increases it. Unexpected bills and emergencies can happen at any time. Flexible insurance that allows for partial withdrawals for unforeseen circumstances might help you overcome momentary setbacks without jeopardizing your long-term financial goals.
3. Loans and Loan Collateral
Higher education is expensive, especially if your child want to attend a western university. Despite the significant scholarships granted to deserving students, there will always be a gap in finances that must be self-funded. You can get a loan from the insurer on a Child insurance policy. Following the lock-in period, the policy begins to accrue cash value (surrender value). As you continue to invest in the policy, the surrender value increases. You can take out a loan against the insurance if you need money for your child's schooling before the policy matures.
4. Benefits from Taxes
Section 80C of the Indian Income Tax Act allows you to deduct up to Rs. 1.5 lakhs in premiums paid into child insurance policies. The maturity value, as well as any partial withdrawals made after the lock-in period, are tax-free.
5. Coverage After The Death Of The Policyholder
The policy can meet your commitments to pay for your child's higher education while also covering your life until you reach the age of 100. As a result, your Child will inherit the sum guaranteed following your natural death. As a result, you may use Child plans to achieve more than simply your child's life objectives. Just make sure you're able to choose the correct plan for the job.
Your present to your child's future is a child insurance plan. It's your piggy bank, which you've carefully built up over the years to assist your child achieve his or her goals. The child's ambitions may include not just school and professional opportunities, but also intriguing hobbies and ideas that, if cultivated, have the potential to transform the world. An insurance plan is a complete financial investment that helps you through all of life's major milestones.
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.