Child Insurance Plans and their Tax Benefits 2022 in India
Did you know that child insurance plans allow for several tax benefits? You want to get benefits under child insurance plans. Read on to know the benefits of buying child insurance plans.
Every child deserves a bright future and it is the responsibility of parents to ensure that. So what is the best way to protect your child’s future? Yes, you are right! You can protect your child’s future with child life insurance provided by a reliable and trustworthy insurance company.
A child insurance policy helps build a corpus for the child’s future and also ensures that the child receives financial support in case of sudden death of the parents. Therefore, with a life insurance plan, you can benefit with the goal of saving the group for its future needs and also getting life protection. Hence, it fulfills the purpose of both income and insurance within one policy.
By buying a child life insurance policy at the time of your child’s birth or when the child is very young, you can ensure that you have a large amount of money as security for the child’s future. In this way you can ensure that your child can pursue his higher education and career of his choice with the money saved.
Further, being a regular life insurance policy, the children’s plan allows for the additional benefit of ‘premium waiver’. According to this benefit, if the insurance parent who buys the policy for their children dies suddenly during the policy, the nominee – the child – is paid the benefit immediately. In addition, under children’s plans, unlike other life insurance plans, the policy does not end with the death of the insured. Instead it continues until the end of the plan without any payment being made for the plan.
Also Red: Different Types of Baby Plans Available in India
Tax Benefits of Child Insurance Plans
We have already discussed the benefits of child education insurance offered by life insurance companies in India. These plans take care of all the financial goals of the child even in the absence of the parents. However, along with all the aforementioned benefits of child insurance, it also provides tax benefits to the policyholders.
Tax Benefits under Section 80C of the Income Tax Act 1961 – Policyholders can deduct annual tax up to INR 150,000 under section 80C on premiums paid on child insurance.
Tax benefits under Section 10 (10D) of the Income Tax Act 1961 – Another tax deduction that an insured can avail is on the growth of the premium. Therefore, any maturity received by the nominee is not subject to tax under this section. Hence, along with tax deduction on the premium, tax exemption on growth is also available under child insurance.
It is true that protecting the future of our children is very important. And a child’s life insurance plan helps protect and achieve your child’s future educational and career goals. These plans also help them in your absence or in the event of your sudden death.
In addition, the best child insurance policy continues even after the money stops coming due to the death of the parents. Therefore, it allows full benefits to the nominee including guaranteed income, and mature benefits etc.
Therefore, with many advantages of child insurance plans, it can be termed as the best option for your child in helping him achieve his future dreams. Be it their higher education, foreign education or other needs like your child’s wedding, a child insurance plan can help in every way.
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