Categorized | Child Insurance

gift your child a bright future

Securing a child’s future is invariably amongst the top priorities of parents. Be it education, training or marriage, parents are expected to put in place a thought-through investment plan, which meets their children’s future requirements and help them turn their aspirations into reality.

Life is full of uncertainties and an absence of future plan can only land you in difficult situations. Starting early and thinking long-term is not a choice but necessity in such a scenario.
 
As the time is passing by, the cost for education is shooting up in a formidable way. The ever-rising cost of living, at the other hand, may further make it difficult to make lump sum investments for your child’s future. With you, your children are also having dreams, and you can actually fulfil all of them, provided you take well-informed, forward-looking decisions.

Investment in any of the child plans or education plans can be one of those decisions. Other than a Guaranteed return in future, you will be benefitted in myriad ways by investing in a child plan.

Choose your options

Child plans fall under two categories i.e., traditional insurance Policy or unit linked insurance policy. You can have guaranteed amount of return in first case, however, if you are ready to bear some risk, you can opt for second one and enjoy the returns as per the shape of the economy.

Nevertheless, the accrued savings can be utilized not only for education but for funding the business ideas for your child or a part of it or whole can again work as base for another profitable investment plan.

Points to consider before buying an investment plan

The time at which you are acquiring a child plan or life insurance is crucial. The sooner you invest in education plan, the better the returns are going to be, as your savings will get more time to earn till maturity.

The amount you will require at the Maturity of life insurance or child plan is to be predicted at the time of buying the plan. You should manage your finance in such a way so that the sum Assured by insurance company can fulfil the objective for which you bought the investment plan.

Benefits of buying insurance related investment plans


Life cover

Child plans provide you dual benefit of savings driven investments and life cover. In case of unexpected event of death, the future of the child is secured as future premiums to be paid are waivered; this is called as Waiver of Premium rider.  So you can burry all your worries about life’s uncertainties.

Other than this, there are many other Riders available to choose from, you only need to be prudent and practical while buying the riders in child plans.

Tax exemptions

Investments in life insurance linked child plans are eligible for tax exemptions. It implies that while you save for your child’s future, you also save income tax up to a certain limit. As per the Income Tax Act, investments of up to one lakh a year in life insurance plans and a set of other investment products are exempted from income tax.

Flexibility

Under education plans you have the option to plan your child education in a comprehensive manner. It is entirely up to you whether you want the Sum Assured in lump sum at maturity or you want the insurance company to release it in regular intervals when your child needs it.

Loyalty addition

The company performing well announces the Bonus from time to time. This bonus is called loyalty addition, which is calculated on sum assured and you get this amount added to guaranteed amount during maturity. The bonus may vary as the percentage at which loyalty addition is calculated is not fixed and can change according to the performance of the company.
 
Added to these benefits, there are many other in-built or optional benefits which depend on the type of investment plan and the insurance company. The parents need to be clear about their requirements of the future to select the right plan. Whether you need the amount in lump sum for your daughter’s marriage or in portions of sum assured in intervals to fund various ambitions of your child, anything you choose should be well-informed and make the future of your child secure and bright.