Planning the best future for your child!
Every parent wishes the best for their child and wants to fulfil their every need. To pave the path for a better future, they also wish that their child gets access to the best education possible. However, with spiralling education costs that are growing at a rate higher than the inflation rate, it's imperative that you plan ahead. After all, when it comes to securing the future of your children, you do not want to leave anything to chance.
Here are a few benefits of how opting for a child plan can help you get a head start.
1. Helps Cover for Their Educational Needs
Child plans are designed to meet the needs of your child. Through systematic investments, you will be able to accumulate a corpus that can be utilised to cover your child’s education expenses in the future. Thereon, a child plan allows you to efficiently plan for your child's education as you'll be aware right from the beginning the amount that your child stands to receive at the end of the term. Moreover, the payouts are structured to be released at specific intervals to suit his/her educational requirements.
2. Unparalleled Protection
Life is full of uncertainties, and you never know what tomorrow brings. Thanks to a child plan, in the event of your untimely demise, a lump sum amount will be made payable while the policy will continue to be active till it reaches maturity. Thus, by availing a child plan at the right time, you can ensure that your child gets to live the future you always dreamt of for them.
3. Take Advantage of the compounding effect
The best part about investing in a child plan is that you get to enjoy the compounding interest effect. By continuously reinvesting your premium amount, compound interest will help make your money grow at a faster rate than the current rate of inflation thus allowing you to build a large enough corpus for your child’s future educational needs.
Child Plans also come with several additional benefits such as Waiver of Premium Rider. Opting for a Waiver of Premium Rider ensures that in case of an unfortunate event that could lead to your untimely demise during the course of the policy, all future premium payment would be waived off as well. Thus, a child plan helps safeguard your child and your family in your presence and even in your absence.
5. Tax Benefits
When you opt for a child plan, you also stand to gain several tax exemptions. The premiums you pay towards a child plan are tax exempted under section 80(C) of the Income Tax Act up to a maximum of 1,50,000/ annually. Moreover, even the maturity amount is exempt from tax under Section 10(10D) of the Income Tax Act, 1961. *
*Disclaimer: Taxes are subject to change as per tax laws
AN Jun 80/18Related Articles: Opting for a Child Plan: The best way forward A First Timer Parent’s Guide to Financial Planning Step by Step guide to Filing Income Tax Returns this Year
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