Becoming a parent is not only a matter of joy2wqqqq but also of immense responsibility. Creating and nurturing a new life requires well-planned and executed financial security to ensure smooth sailing for the entire family.
The onus of responsibility primarily lies on the shoulders of the parents. Therefore, it is best to secure the future of your child from the very beginning. A child insurance plan plays a significant role in this context.
What is the standard coverage limit of a basic child insurance plan?
Ideally, a standard child insurance plan covers child education costs, healthcare expenses, etc. as per the chosen plan terms. After the parents, the child remains the nominee of all the funds in this case. To ensure a smooth financially secure future for your child, it is best to invest in a competent child plan as early as possible.
Importance of investing in a child insurance plan
A child insurance plan is almost an indispensable part of a financially secure future for your beloved child despite challenging circumstances. Some of the most highlighting necessities of child plan investment include the following:
- Child education coverage: Inflation is too true in the education sector. If you do not plan early, continuing with your child’s education at higher levels might prove to be a challenge. If you do not want to compromise in this field, it is best to invest in a competent child plan with education coverage as soon as possible.
- Inculcating saving habits: Child plan investments inculcate the habit of systematic saving that aids you, especially in challenging circumstances. The financial requirements of your child will alter at different stages. Therefore, it is crucial to plan accordingly and then proceed to enjoy optimum protection in every situation.
- Health protection cover: A standard child plan allows healthcare coverage. This is especially essential if you have any serious familial medical record. God forbid, but if your child gets affected somehow, running the treatment will not be a serious problem if you maintain a child plan.
- Death of parent(s): Death may hit you at any point. It is unpredictable. It will gravely affect your family both emotionally and financially, especially if you are the family’s breadwinner. There is no substitute for a competent comprehensive child insurance policy to handle the financial void caused by the death of one or both parents in the life of the child. There remains a premium waiver benefit and the child receives the insurance lump sum.
Choosing the right child insurance cover
With the rising popularity of child insurance plans, the market is currently loaded with multiple competent insurance policies ideally designed to secure your child’s future. However, each plan is different and no one plan can suit equally well to all. The primary reason for this is that the financial targets, status, etc. vary from one individual to another. Some handy tips that you should consider before selecting the right plan include the following:
- Premium waiver benefits:
It is best to opt for a plan that allows premium waiver benefits. In the absence of this feature, the insured child will be burdened by the premium dues despite the death of the parent(s). However, this feature will relieve him/her of this burden and he/she will receive the death benefit as per the plan terms. - Calculate before finalisation:
It is best to make a tentative calculation before you finalise your investment. You can even utilize an investment calculator to understand the potential returns and maintain a diversified portfolio. The financial requirements vary at different stages of life. Depending on the targets you should plan accordingly to enjoy a smooth journey despite challenging circumstances. - Comparative study:
As mentioned earlier, the market has several child plans on offer. However, each plan is different and suits you in different ways. Therefore, it is best that you compare different plans to understand the scenario well and then zero in on a particular plan that suits your requirements well, offering optimum returns. - Investment plans for girl child:
There are several investment plans for girl child. So, if you have a girl child, you can explore these added options. Some of the most popular investment options in this genre include Sukanya Samriddhi Yojana, Public Provident Fund, National Savings Certificate, ULIPs, Balika Samriddhi Yojana, Lakshmi Scheme, etc. - Tax benefits:
Child plan investments qualify for tax benefits. Both the investment and maturity proceeds are tax-exempt. The premium payable amount remains tax deductible under Section 80C of the IT Act. The optimum yearly limit is INR 1.5 lakhs. Apart from this, tax exemption can be availed on death and maturity benefits u/s 10 (10D).
Conclusion
Investing in a competent child insurance plan aids you in more ways than one. It helps your child to achieve future goals smoothly despite contingencies, allowing education and healthcare support. It also includes death benefits during any mishap and continues to act as a protective shield for your child throughout.
