Child plans are crucial for securing your kid’s future. It can provide the benefit of investment as well as insurance. Therefore, it can help you in securing your child’s future.
If you want to know more about the benefits of child plans, then read this article.
The most important concern for every parent is securing their child’s future. Therefore, people look for various investment options that can allow them to ensure their kid has the funds to meet his/her goals. Child plans can be helpful for parents because such plans can help them accumulate money as well as get life cover.
What are Child Plans?
Child plans help in planning for the child’s future requirements. It can help parents to start financial planning for their children from a young age.
The Dual Benefit of Child Plans
In order to help children meet their goals, parents might have to accumulate a lot of money. However, during this accumulation period, it is essential for parents to provide financial protection to their child in case of an unfortunate event.
A child plan can help in building funds as well as provide financial protection with life cover. Therefore, with the help of a child plan, parents can build funds for their children’s future requirements. On maturity, the proceeds of the plan can be provided for the kid’s financial needs. Furthermore, if parents pass away during the tenure of the plan, then the insurer can provide the policyholder’s funds to meet future expenses.
Here are some of the benefits of purchasing a child plan-
- It Can Help Pay for Child’s Education
As education expenses are rising significantly, it has become very important for parents to start financial planning for their children from a young age. With the help of a child plan, parents can accumulate the necessary funds that their kid might require for his/her education.
Furthermore, as a child plan enables parents to start saving for their child’s future, it can help them avoid education loans. Such policies can help parents to build funds by the time their child enters college. Thus, these funds can be used to pay for the expenses.
- Collateral for Loans
Child plans have a surrender value. Therefore, it can be offered as collateral to avail a loan. The amount can vary based on the underlying fund.
- It Can Offer Waiver of Premium
Child plans can offer waiver of premiums. In case the policyholder dies during the tenure of the plan, then the insurer can waive all the future premiums. Thus, the child can receive benefits of the policy in case of an unfortunate event.
- It Can Provide Tax Benefits
Apart from such benefits, a child plan can also provide the policyholders with tax benefits. The premium paid to purchase this policy can be claimed as a tax deduction under Section 80C. Furthermore, the maturity proceeds are exempt from tax under Section 10(10D).
Investing in a child plan can help parents meet their child’s future financial requirements. Therefore, it is important for every parent to consider purchasing child plans.