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A child plan or child insurance plan is an insurance policy for the financial protection of your child's future. A child plan also acts as an investment plan. The amount invested in a child policy can be used to meet your child's important future finances, for example, higher education or marriage.For example, any MBA or study abroad, or marriage is quite expensive these days. A child plan helps to reduce the limitations of the moment and help your child fulfill their dreams. Typically, child insurance covers the life of a parent who has a minor to care for. However, the benefits of the plan are given to children when they reach a certain age and need funding for their future needs.
Funding is available either in installments or as a single amount. In India, LIC Child Planning is one of the most popular child investment plans among people. However, it is advisable to look for different baby plans offered by life insurance companies in India and then choose the best baby plan among them. [dutch insurance companies]
Types of a child plan
A child plan can be broadly classified into two categories:
Children's diction enduring endowment plans
Investments under the Traditional Endowment Plan provide stable returns. The money you invest in the child plan is further invested to provide better interest than the sum insured. An endowment plan pays a sum at the end of the contract, i.e. in case of maturity or death of the parent. Also, it is essential to keep an eye on your bonus and the interest applicable on your return, such as general or compounded interest.Child Unit Linked Insurance Plan
These are market-linked plans that provide temporary payments. Under the Unit Combined Insurance Plan (ULIP), money is invested in equity funds so returns depend on market fluctuations. It is advisable to invest in ULIPs for a long period of time (more than ten years) to ensure better returns. Moreover, some life insurance ULIP providers also offer an option to customize different funds enabling you to control your investment.
Why should you buy child insurance?
One of the major benefits of child planning is that it serves as both an insurance and investment opportunity. In addition, there are several other benefits to having a child insurance plan. Some of them are mentioned below, take a look!1. Creates large corps
Child planning is extremely beneficial for saving as well as saving for your child’s future. Typically, child insurance plans have the potential to provide up to 10 times the amount invested. This amount can be used for your child's education, marriage, or any medical emergency. Compounding energy works wonders in increasing the resources applicable to these funds. Thus, the investment child plan ensures that your child does not lack money for big milestones or sudden events.2. Tax benefits
Child insurance plans also offer tax benefits. Under Section 80C of the Income Tax Act, policyholders can claim a tax deduction. If the premium exceeds 10% of the original sum insured paid in a given year, one can claim a tax deduction of up to 10% of the sum insured. Additionally, under Section 10 (10D), if the annual premium paid is not more than 1/10 of the Basic Insurer, you can avail tax deduction on the interest earned on the investment. However, the funds distributed in case of death are completely tax-free.3. Can be used as security for Ananya
Your child insurance policy can be used as collateral for a loan after a certain lock-in period. It gives you an extra resource and thus enhances your financial position. Child plans can also be used as collateral for various child-related innings such as marriage, education, etc.4. Beating helps in inflation
The money you are saving for your child will not increase over time and will give you the same value after a few years. That's why investing money is important When you invest money in a children's plan, your money not only grows over time but also gives you financial support.LIC Children's Plan
The Life Insurance Corporation of India (LIC) is one of the most reliable life insurance providers in India. Currently, LIC in India has around 250 million customers and is still working to maintain the same services and product pricing in the competitive insurance industry. The company offers various insurance plans, term plans, investment plans, savings plans, and child plans. Listed below are some of the best LIC plans for the child.The best LIC plan for Children 2017
- LIC's money-back policy
- LIC life is young
A child insurance plan ensures that your child's future is secure even if you are not around. It gives your child a stable financial cover that any parent would want. So don't wait any longer! Set your priorities, choose a baby plan according to your needs, and ensure your child's future today!
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