Your child’s future is a major priority, one that you should not neglect by all means. Securing your child financially is a key step on the way towards building a robust portfolio that keeps you one step ahead. This is where, as a parent, you should consider children insurance plans from an early stage. Let us look at some of the reasons why these plans are worth considering.
Top Benefits of Children Insurance Plans
Children insurance plans come with multiple benefits that you would do well to keep in mind.
- Children insurance policies offer dual advantages of insurance coverage and investment returns. This helps children stay financially secure throughout multiple stages and milestones in their lives.
- Insurance coverage is present throughout the plan period, while the maturity proceeds can be used to meet diverse goals and requirements.
- Insurance plans that have investment components will help you garner attractive returns that may outstrip inflation as well. It will help you take care of higher education costs in the future without any worries.
- Children insurance plans can also help you get loans against their surrender value. It is the sum that you’ll be paid in case you surrender the policy in question. This can work as much-needed security or collateral for loans in case you need them to meet urgent financial needs.
- Many of these plans come with premium waiver features. These are usually add-ons or riders that ensure the waiver of future premiums in case of the demise of the parents. The benefits of the policy will thus continue in an uninterrupted manner, with the insurer paying the rest of the premiums.
- You will usually get investment choices in terms of market-tied financial instruments. These may include debt and equity funds or hybrid funds. Investments may be diversified to lower market risks as well.
- Most plans also give you an option to switch or change funds that are not performing well. Hence, you can always move to better-performing options to sustain the growth of your portfolio.
- Sometimes, you may also change fund allocation based on your life stage and evolving goals. For instance, you may invest in equities earlier in life when you do not have too many financial responsibilities and switch more towards debt later in life when you have other commitments to fulfil. You can decide this ratio in consultation with the fund manager.
- The lump sum amount that you get at maturity will help you take care of various financial requirements of your child, ensuring access to the best education and resources throughout his/her early years.
- Partial withdrawal facilities enable you to strategically get money at various intervals for admissions and other needs.
- There are tax deductions that you can also avail of on your premiums under Section 80C, subject to certain conditions. The maturity payout may also be exempted under Section 10 (10D).
As you can see, children insurance plans offer a beneficial combination of handy coverage and future returns. They enable you to financially safeguard your child even in the most dire of situations.
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