The life insurance industry is in full swing. With extensive marketing from private players, LICs, and the insistence of the government, people of all classes are realizing the importance of purchasing life insurance coverage. Short-term and long-term pension and child insurance plans are on the rise. People are investing in these plans initiated by self-awareness or the glamor of insurance ads.
After the pension plan runaway (pension plan sales have skyrocketed in recent years), the next big thing most insurance companies are targeting is the Children’s Insurance Plan. Even Life Insurance Corporation of India, which mostly focused on cash back and term plans, is now moving towards children’s plans.
Child Insurance Plans started from Child’s age 0, making it easy for most parents to plan for the future of their “unborn” child. Children’s Plans – cut only for children are designed to cover the needs of education, higher education and marriage. Sum insured or guaranteed return are the main characteristics of the children’s plan. The main attraction that insurance companies like ICICI Prudential and HDFC take advantage of is the Maturity Benefit Plan in which the family does not need to pay more in the event of the death of the insured parent during the policy term and the policy continues with the sum insured and declared bonuses.
Taking advantage of other benefits, which are actually beneficial, insurance companies are doing their best. Insurance plans for children have some of the basic attractions, such as checks when the child reaches a certain grade/class or age and a beneficiary concept where the beneficiary (in this case, the child) is the only person who receives the benefit. To add to the icing on the cake is the Tax Benefit. Parents taking out the policy for children are eligible for the Tax Benefit under Section 80C and Section 10 (10D) of the Income Tax Act of 1961.
– Under Section 80C: You can save tax every 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 exclusions.
Securing the future of children is one of the greatest reliefs for any parent. With so many insurance companies entering the field of child and life insurance, this shouldn’t be too distant a dream…