help create a corpus for crucial stages in the child’s life
Want to shed off all your worries with regard to your child's future, go for a child plan! With a child plan, you ensure that the financial support required for your child to pass through the essential phases of his life is taken care of by the insurance provider. Today, child insurance is available in various formats and these can help you de-risk your child's future to a great extent.
The eligibility criteria that decides who can buy a child Policy varies amongst insurance companies. But broadly speaking, a child plan can be availed if the parent is above the age of 18, while the child is below the age of 18. The maximum entry age of the parent is restricted up to 60 in most child insurance plans.
The key benefits that the best child plan would offer include:
The Premium amount that you pay towards the child plan is invested by the insurance company and gets compounded over years and you are paid back the same as sum assured. The sum Assured is either payable on Maturity of the plan or on the demise of the parent. A few plans allow the Sum Assured to be paid as installments over multiple years. The installments payments are generally linked to a milestone like further education, marriage etc. The milestones may be anticipated in advance and accordingly the installment milestones are fixed.
Most child plans would have a rider which would give you the benefit of premium waiver in the event of the demise of the Insured parent. Opting for the premium waiver benefit would mean increase in the premium liability. By virtue of the premium waiver clause, the policy will continue even after the demise of the parent and the liability of all future premium payment would be taken up by the insurance provider.
If you do not opt for the disability rider, the premium waiver will be allowed only in the event of the death of the insured. But if you take the disability rider, premium waiver will also be allowed in the event of disability of the insured parent.
Like in the case with other life insurance plan, the premium paid towards a child plan are exempt from tax under section 80C. The maturity or death Claim proceeds are also exempt from tax under section 10 (10D).
There are host of child plans offered by companies and if you wish to buy one, you may compare child plan online with regard to the premium amount payable, sum assured, and availability of premium waiver benefit, disability rider and policy duration. This will give you a very clear picture of which child plan is ideal for you and you may pay for the one that offers the best terms.