Child Insurance Schemes in India and their Tax Benefits 2022
Did you know that child insurance plans offer many tax benefits? Do you want to avail benefits under child insurance schemes? Read on to know the various benefits of shopping Child Insurance Plans.
Every child deserves a bright future and it is the responsibility of parents to ensure it. So, what is the best way to secure your child’s future? Yes. You are right! You can secure your child’s future with a child life insurance plan offered by a reliable and trustworthy life insurance company.
A child insurance plan helps build a corpus for the child’s future and ensures that the child receives financial support in case of unexpected death of a parent. Hence, with a life insurance plan, you can benefit from both the objective of getting life security as well as saving the corpus for its future needs. Thus, it serves the purpose of both investment and insurance in one policy.
By buying a child life insurance plan at the time of your child’s birth or when the child is very young, you can ensure a lump sum as security for the child’s future. This way you can ensure that your child can pursue his preferred higher education and career goals with the money saved.
Additionally, being a regular life insurance plan, Bal Yojana allows an additional benefit of ‘premium waiver’. As per this benefit, if the insured parent who buys the policy for their children dies suddenly during the term of the plan, the nominee – the child – is paid the benefits immediately. Further, under child plans, unlike other life insurance plans, the policy does not terminate with the death of the insured. Instead it continues till the end of the term of the plan without any premium payment being made to maintain the policy.
Red too: There are various types of child schemes available in India
Tax benefits on 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 if the parents are not much. However, along with all the above child insurance benefits, they also provide tax benefits to the insured.
Tax benefits under Section 80C of Income Tax Act 1961 – The insured can avail an annual tax deduction of up to INR 150,000 under section 80C on the premium paid on the child insurance plan.
Tax benefits under Section 10 (10D) of the Income Tax Act, 1961 – Another tax deduction that an insured can avail is on the lump sum maturity amount of the policy. Therefore, whatever maturity the nominee attains is also exempted from tax under this section. Thus, along with tax deduction on premium, tax exemption is also available on maturity under child insurance policy.
concluded
It is true that protecting the future of our children is our highest priority. And a child life insurance plan helps protect and fulfill your child’s future educational and career goals. These plans help them even when you are not around or in case of your sudden death.
Additionally, the best child insurance plan continues even if the premium stops due to the death of the parent. Thus, it allows total benefit to the nominee including sum assured and maturity benefits etc.
Hence, with so many benefits of child insurance plans, it can definitely be called the best plan to help your child realize their future dreams. Be it their higher education, education abroad or other needs like your child’s marriage, a child insurance plan can help in every possible way.
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