The Life Insurance Industry is in full bloom. With wide marketing from Private Players, LIC and Government insistence, people from all classes are realizing the importance of taking Life Insurance Cover. Short term, long term, pension and child insurance plans are on boom. People are investing in these plans initiated either by self awareness or by the glam of insurance advertisements.
After the flight of pension plans (sale of pension plans have boomed up dramatically in the past years), the next big thing, most insurance companies are targeting is Child Insurance Plan. Even Life Insurance Corporation of India, which majority targeted on Money Back and Term Plans, is now moving towards child plans.
Child Insurance Plans began from the Child age 0, so it’s easy for most of the parents to plan the future of their “to-be-born” child. Child Plans – cut only for children are meant to cover the education, higher education and marriage needs. Sum assured or guaranteed returns are the main features of child plan. The main attraction, insurance companies like ICICI Prudential and HDFC insurance companies tap on is the Maturity Benefit Plan wherein the family need not pay further in case of insured parent death during the policy term and the policy continues with sum assured and the bonuses declared.
Tapping on other benefits, which in fact are beneficial, insurance companies are putting up their best. Child insurance plans have some of the basic attractions like cheques when the child reaches a certain grade/class or age and beneficiary concept where beneficiary (in this case the child) is the sole person to receive the benefit. To add to the icing is the Tax benefit. Parent/s who is taking the child policy is eligible for Tax Benefit under Section 80C and Section 10(10D) of the Income Tax Act, 1961.
– Under Section 80C: You can save tax each year as premiums up to Rs. 1,000,000 are allowed as a deduction from your taxable income.
– Under Section 10 (10D), the benefits you receive from this policy are completely tax-free subject to the exclusions.
Securing ones child future is one of the biggest relief for any parent. With so many insurance companies coming in the child insurance, life insurance field, this should not be a dream too far…