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Why You Should Opt For a Child Plan

  • Highlights

  • Benefit from premium waivers in case of unforeseen events

  • Get flexible payment and payout options

  • Get Income tax benefits on premium paid

  • Get added benefits from various riders

A child insurance plan is a financial safety net that you can put around your children for reasons like education, marriage and of course, security. But why should you go for a child plan instead of other general plans? Here are the reasons:

Premier Waivers

For any other insurance policy, if the insurer dies during the policy period, the benefit of the policy is given straight away to the beneficiary. But child insurance plans are markedly different. The main benefit of a child insurance plan is that the policy is not stopped when the insurer dies. At that moment the beneficiary is paid the sum assured. Then the remaining premiums are paid by the insurance company and at maturity, the amount is paid to the beneficiary. This is one key benefit of a child plan.

However, some insurance policies do not have that benefit, but is given as a rider option. It is always beneficial to take the rider option for premium waiver. It’s wise to check the policy document carefully.

Additional Read: 4 Best Child Plans in India That You Should Consider

Flexibility in Premium Payment and Payouts

Child insurance plans provide great flexibility in both premium payments and payouts. You can pay the premium as a lump sum or periodically (monthly, quarterly or yearly). Based on your cash flow you can plan so that it does not create burden to you. Similarly, you can take the final payout as a lump sum, or as staggered payouts. For example, you can arrange the payout in such a way that they coincide with expenses at that stage in your life.

Tax Benefits

One more added advantage of a child plan is the tax benefits offered. Under Section 80C of the Income Tax Act, you get tax deductions on the premiums you are paying on each financial year. Also under section 10(10)D of Income Tax Act, any income out of the plan is tax-free.

Additional Read: How To Invest In A Child Plan?

Various Riders

Riders are another key benefit of a good child plan. You have already heard of the premium waiver rider. There are other types of riders like accidental death benefit, critical illness benefit, income benefit, etc. You need to read the policy document to choose the riders suitable for you.

These reasons make it evident that a child insurance plan is a prudent tool to secure the future of your child, and protect them financially in case of unforeseen events.

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