A child insurance policy is a specially designed life insurance plan that provides financial protection for a child’s future. It ensures that a child’s major expenses, such as education, marriage, and financial independence, are secured, even in the unfortunate event of the parent’s demise. This policy offers both life coverage and investment benefits, helping parents accumulate a lump-sum amount by the end of the policy term.
A child insurance policy is typically purchased by parents or legal guardians to safeguard their child's financial future. Here's how it works:
A child plan ensures financial protection for important life goals like education and marriage, even if the parent is no longer around.
At the end of the policy term, the child receives a lump sum payout, which can be used for higher education, business setup, or other financial needs.
In case of the policyholder’s unfortunate death, the insurance company waives off all future premiums, ensuring that the policy remains active and the child receives the benefits as planned.
Some child insurance policies allow partial withdrawals, which can be useful for covering urgent education-related expenses.
Premiums paid towards a child insurance policy qualify for tax deductions under Section 80C, and the maturity benefits are tax-free under Section 10(10D).
Additional riders like accidental death, disability, and critical illness coverage can be added to enhance the financial security of the child.
These plans offer a mix of insurance and investment, ensuring a guaranteed payout at maturity.
A ULIP-based child insurance policy allows investment in equity or debt funds, offering market-linked returns with life insurance benefits.
These policies provide periodic payouts at key milestones of a child’s life, such as school completion and higher education.
Ensure the sum assured is sufficient to meet future financial goals like higher education and marriage.
Choose a term that aligns with the child’s major milestones, such as graduation or higher education needs.
Select a policy that offers optimal coverage within your budget.
Check the claim settlement ratio of the insurer to ensure a hassle-free claim process.
Opt for plans with investment benefits to grow savings over time.
Calculate estimated education, settlement, and marriage costs.
Use online tools to compare different child insurance plans based on benefits and premium costs.
Select a policy that continues even after the parent's demise without additional premium payments.
Look for riders like critical illness, accidental death, and disability benefits.
Complete the application process online or visit a financial advisor to finalize the policy
