Top Frequently Asked Questions On Child Insurance Policy
Updated On Sep 22, 2021
Table of Contents
- Most Frequently Asked Questions About Child Life Insurance Plans
- 1. What Are The Expenses For Which I Am Setting Aside Funds?
- 2. When Should I Start Making Plans?
- 3. How Can I Figure Out How Much It Will Cost?
- 4. How Long Will The Strategy Be In Place?
- 5. Is It Possible To Withdraw Money From A Child’s Plan In Installments?
- 6. Is The Plan Covered By A Premium Waiver?
- 7. Is It Better To Invest In An Endowment Or An Equity-Linked Plan?
- 8. Is There Any Money Left Over In The Budget?
- 9. What Is The Amount Of Money I Will Save In Taxes?
Child Plans are a way for you to save money for your child's future, and the more you can do to assist your child in reaching their goals and thriving in life, the better. These plans offer long-term investing options, allowing you to save for your kid until they reach maturity or independence, or even later, depending on the duration you select. It not only ensures you a guaranteed return on all assets, but it also provides life insurance for your child in the event of a crisis.
Most Frequently Asked Questions About Child Life Insurance Plans
A list of frequently asked questions concerning child insurance plans is provided below.
1. What Are The Expenses For Which I Am Setting Aside Funds?
This is the greatest spot to start with this essential question when choosing a child plan. It's crucial to think about what kind of education you're saving the corpus for. Given the competitive nature of today's society and the necessity of multidimensional development, it's important that every child engages in extracurricular activities. You must save adequately if your child decides to seek additional vocational training in a field of their choosing in the future.
2. When Should I Start Making Plans?
Starting early allows you to invest for a longer length of time, allowing you to consistently grow your money. It happens before settling on a long-term investing strategy.
3. How Can I Figure Out How Much It Will Cost?
When deciding how much to allocate, you must anticipate your children's school expenses based on annual inflation rates.
4. How Long Will The Strategy Be In Place?
The maturity phase of your plan is usually decided by your child's present age. If your child is six years old right now, he or she will be at college in 11 or 12 years. As a consequence, you must choose a child education plan that has a minimum maturity period of 10-12 years
5. Is It Possible To Withdraw Money From A Child’s Plan In Installments?
If you need cash fast before your plan matures, a partial withdrawal feature may be beneficial. The option to withdraw funds at regular intervals might be quite helpful in paying rising school costs.
6. Is The Plan Covered By A Premium Waiver?
A premium waiver is included in the majority of child policies, allowing the policy beneficiary to continue to benefit from the plan after it has matured. All outstanding premium payments are canceled if the policyholder dies, and the nominee receives a guaranteed sum at maturity.
7. Is It Better To Invest In An Endowment Or An Equity-Linked Plan?
Depending on your risk tolerance, you can choose one of them. You can invest in unit-linked child plans or equities for a duration of 10 years or more if you have higher risk tolerance. If you are afraid to take investment risks, an endowment plan that is protected from market volatility while still providing enough coverage is a better option. Endowment plans serve as both savings and insurance coverage.
8. Is There Any Money Left Over In The Budget?
You may be eligible for rewards depending on the terms and conditions of your plan. Bonuses begin to be credited after the first year, aiding in the fund's maximizing. A reversionary bonus might be simple or complicated. Certain programs may offer a monetary incentive as well as a final bonus.
9. What Is The Amount Of Money I Will Save In Taxes?
The sum assured, including any bonus claimed on maturity or owing to the insured's death, is free from taxation under Section 10D of the Income Tax Act of 1961. The insurance premium is also tax-deductible under Section 80C.
Child Plans allow you to save money for your child's future, and the more you can help them reach their objectives and flourish in life, the better. It not only assures you assured earnings on all assets, but it also provides life insurance for your kid in difficult circumstances.
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.