These days, anyone can see insurance related advertisements from major insurance providers. The difference between the advertisements few years back and now is that insurance companies have woke up to the niche of child insurance. Now, the plans are targeting children and working towards various policies designed to take care of children health and their needs.
Cost of living has been on the rise. Thereby, savings have a major impact on the field. Education is very important, and insurance for the same is beneficial. One can never know the cost of education, especially if a child wants to pursue higher education from some foreign university. Therefore, as a parent, one can at least prepare for the basics so that education doesn’t dent a hole in either parent’s pocket or child’s future.
Some of the factors must be noted before putting finger on any insurance policy. These may be:-
• Company’s performance record: It is a very important aspect. One can’t just choose a policy irrespective of company’s reputation. Ultimately it is the company that is going to return benefits which may be maturity bonus or education fee.
• Additional benefits: If one is taking an education policy, additional benefits will include health benefits and life cover. It is an important consideration while taking an insurance policy.
• Premium Waiver: When taking insurance on child’s name, it is very important to ensure premium waiver. If it isn’t there in the insurance of one’s choice, one must ask for the provisions to get this feature added. According to premium waiver, the insurance premium will be waived off in case of death of the parent.
• One may consider taking insurance for an adult and making a child dependant. In any case, child insurance can’t have a dependent. It must be considered before finalizing on the plan.
• Tax Benefits: Every major insurance policy provides tax benefits. It is important to know what kind of tax benefits the policy is offering. According to the Income Tax Act 1961, tax benefits are available under section 80C and section 10(10D), and the parents who take policy for child are entitled to tax benefits under these sections.
• Nothing is a surety in today’s world. Therefore, child insurance is a precaution to ensure child doesn’t suffer to life’s uncertainties, or fate’s roll of the dice.