Learn Why You Need A Child Insurance Policy Today

There is a lot of emphasis given to basic financial planning and generating wealth so that we can retire in style. However, there aren’t as many resources out there dedicated to those with families and children to look after. One of the most important things we should do as parents is to ensure the proper education of our child, which is certainly not a cakewalk as the costs of education are growing constantly. A child Insurance policy is a smart financial decision.

This Is Why You Need A Child Insurance Policy Today!

When you take a closer look, it can help you make a lot of important decisions when your child grows up in the future. With a Child Insurance Policy in place, your children will be able to fully live their dreams. This is because you will have a safety net that will give them financial protection, which promotes making the most of the opportunities they encounter in their life. This blog talks about how a child insurance plan can help in your child’s future.

 
 

Designed For a Specific Purpose

There are numerous investment options available in India that you can use to grow your capital for future utilization. However, none of them is aligned only towards the betterment of your child’s future. A child’s plan is designed in a unique way to secure your child’s future. In the event of the unfortunate death of a parent, most conventional plans terminate the policy as premiums are discontinued.

However, with a child plan, the premiums continue to pay off even after the parent’s death by the insurance company. Moreover, even the death benefit is paid to the children to help them sustain a regular lifestyle. What’s even better, the savings you make throughout the tenure of your policy are intended for your child’s education, which means you can manage your finances in a better way and gain the highest possible returns as per the purpose.

Offers Multiple Tax Benefits

To maximize the returns on your investment, you must make sure that you save money on taxes as well. Fortunately, a child insurance plan provides tax exemption on both the benefits you receive through the policy and the investment you make. The added benefit of a child education plan is that the investment amount is deductible, and there are no taxes on capital gains or maturity benefits under Section 10D(D).

Diversity in Portfolio

Financial planning is important. It helps you determine how much money you will need for your goals and what your assets should be worth when you reach them. Child investment plans are one way to plan for the future betterment of your child. Families are becoming smaller, and people are starting families later in life. Child plans help you save for your children’s education so that you don’t have to worry about the rising costs associated with parenting.

Cushion Against Financial Disruptions

When you make the monthly payments for the child investment plan beforehand, you create a cushion of protection for yourself from an uncertain income flow in the future. In the event of your demise, or case of a drop in your income, your child’s future will be safe. As you may know, the earlier you invest in insurance, the lower your risk. It’s also true that the longer you wait to invest, the more likely it is that you’ll be investing when things get worse. The earlier you invest in a fund, and the more reliable your income sources, the safer your investment.

Prevents Loss of Capital

Changes in the value of funds can mean that you may get back more or less money than you originally invested. To deal with this while protecting your capital, it is necessary to create a funds allocation strategy that automatically adjusts the proportions of different types of investment. You can also choose to invest systematically and select funds that match your risk level and that provide higher returns. With a Systematic Transfer Plan, you can switch to a different fund when the market is volatile.

Fulfill Your Child’s Dreams

If your child is born recently, the fees will be much higher when your child plans to take up the course. But by having a child education plan, you don’t need to worry about what courses your child will pursue. Depending on his interests and skills, he/she will be able to take up any courses of his/her choice. This will help him achieve all his/her goals and aspirations in life. If you start investing for your child’s future now, the accumulated corpus at the time of maturity will be sufficient to pay college fees. The child will benefit from the payment early enough to ensure that his/her dreams are turned into reality. There are various impressive child plans available in the market that can help you secure a bright future for your child.

Riders For Extended Coverage

Even if you have taken out the best insurance policy for your child, it makes sense to consider adding riders. For example, if the policy has a premium waiver rider, it will not charge your child for premiums if something happens to you. Other rider benefits include personal accident insurance to cover your family in case of a personal accident.

Bottom Line

If you have a family, then buying a child Insurance Policy is a must. Having a child is not the only reason for this – your life also gets a lot more complicated when a baby joins your family! Not only does the baby need your love and care constantly, but you also have to be more careful about his daily needs.

Child insurance helps protect you from any unforeseen circumstances like accident or sickness of your child which can cause an extreme financial burden on your hands due to hospitalization and medication expenses as well. Therefore, make sure you consider getting a child insurance plan right away.