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Child Insurance Scheme: Keeping in mind the ever increasing inflation, it has become very important to plan for children's education, marriage and to achieve future goals. Today the price of the item is Rs. 100, after 10 to 15 years it becomes Rs. 1000 can be done. This insurance plan for children provides insurance facility as well as future fund needs of your child.
Benefits of Child Insurance Scheme
Through child insurance (Bal Bima Yojana) you can raise money for your child's future. Enables you to save a large sum of money in advance for expenses like child's education and marriage. A child insurance plan offers the facility to make payments at different times during your child's schooling. Future coverage also provides coverage for such emergencies and illnesses.
Withdrawal made easy
Child plan provides coverage covering all the expenses of the child. It provides the facility to withdraw the lump sum amount annually during maturity or when the child turns 18.
Insurance plans include SmartKid (ICICI Pru Smart Life), Max Life Child Insurance Plan, LIC New Children Money Back, HDFC Life YoungStar Udaan, SBI Life – Smart Scholar.
Four types of child plans:
There are four types of child plans in India – one is Child ULIP, which mainly offers high insurance coverage. Apart from this, you also invest regularly, this money is also invested in the equity market. In case of your death, the sum assured is paid to the nominee's child or legal guardian. Future premiums are waived off after death. You can withdraw the entire amount during maturity. These plans are usually for 10-15 years.
Second, the traditional endowment plan, which offers fixed returns in the form of a bonus on the sum assured. Usually the bonus is paid from the second year onwards. The third plan is the Single Premium Child Plan, in which you pay the entire amount as premium in one go. No more hassle of remembering premium payment due dates. Some companies offer discounts or lower premiums under this.
The fourth is the Regular Premium Child Plan, where you can have flexible premium payment options. You can pay the premium monthly, quarterly, half-yearly or annually.
tax exemption
On this insurance you also get tax benefits under Section 80C in the old tax regime of the Income Tax Act. You get a rebate on the investment you make as insurance for your child. The premium paid for these insurance plans out of your total taxable income is Rs. 1.5 lakh is eligible for deduction. Under Section 10(10D) of the Income Tax Act, maturity benefits from child insurance plans are completely tax free. This means that the lump sum amount received on maturity, all benefits including accrued bonuses are free from income tax.