Child plan as the name suggests is an insurance plan specifically designed to meet the needs of the child. It is an investment cum protection plan like any other insurance plan, the difference lies in the way each of them provides benefits. The insurance element provides risk coverage on the life of the child for a fixed duration. It provides protection to the child as well as to parents. Since any child plan policy is made for the child, its features and benefits revolve around the needs of the child.
The core purpose to buy a child insurance plans is to fund various milestones in the child's life like higher education, marriage, owning a dream house or a commercial venture or any other major goal that needs funding. It is bought to acquire safety for the fund invested as well as to invest it systematically in such a way that it can be availed when required.
Best Child Insurance Plan in India
How it works?
When child saving plan is bought, it is bought keeping a particular time horizon in the view, say for 10, 15 or 20 years. To choose the best child plan policy, the parent factors in his age and his child's age and picks the policy term period in such a way that it overlaps the prime time of the child say, 18, 21 or 24. The benefits in the form of sum assured can be availed at maturity or death at once or multiple times in fixed intervals, as set by the parent.
Types of Child Saving Plan
• Traditional child plan
• Market-linked child plan
Optional Riders Available with Child Plan
• Waiver of premium (generally built-in)
• Critical illness
• Accidental death and disability
• Comprehensive health benefit rider
• Income benefit rider
Benefits of Child Insurance Plan
• Flexible payment options
• Safety of investment
• Risk coverage of the child's life
• Waiver of premium (in case of premature death or disability of any kind of the earning parent)
• Loans can be availed against the premium paid
• Availability of sum insured in segments on maturity or death of the proposer
• Tax benefits i.e. deductions u/s 8o (C) and tax exemptions u/s 10 (10D)