Childbirth is one of the most important events in the life of parents. They plan their children only when they are completely able to provide for their children - emotionally as well as financially. However, despite all the planning, there is always the thought of uncertainty looming over every parent’s mind, irrespective of their age or wealth. This is where life insurance policy for your children chips in with a guaranteed sum of money that would help them in education as well as lead a dignified life.

Why Do You Need a Children’s Life Insurance?

Most Indian parents are quite protective of their child, and they want their child to be safe no matter what the circumstances are. This idea of protectionism emanates from a deep-rooted love for their children, which is why they try and save their income to ensure that their child leads a happy life in future. Thus, to guarantee a well-provided for and protected life for their child, parents can consider buying a children’s life insurance plan.

• Financial security for your child – Child insurance plans ascertains that your child is financially protected irrespective of your financial situation. Most child insurance policies have the provision of providing for a sum assured upon the demise of the earning parent, who also would be policyholder in most cases. Moreover, in the case of policyholder’s demise, the subsequent premiums are also waived off so that there is no financial liability on the child.
  
• Education coverage – Education is an integral part of a child’s life. Tuition fees for secondary as well as higher studies have skyrocketed over the years. Moreover, it is not always possible to get an educational loan, or even if one gets, it cannot be sufficient for every expense ranging from food to lodging. Hence, getting a child insurance plan is the best strategy to fund such goals and requirements.
  
• Tax benefits – The aspect of tax benefits is common is most insurance policies. The premiums paid are tax-deductible under the Section 80C of the Income Tax Act 1961, while the maturity benefits are tax exempted under Sec 10 (10D) of the same Act. However, the tax-deductible under Sec 80C is limited to only ₹1.5 lakh per annum.
  
• Collateral security – There is also a provision of availing credit facility against the corpus of the sum assured in your insurance policy. Such a provision can be very useful to opt for education loan for any university in India or abroad. This can also be used for collateral security for any borrowings for your child’s health or marriage.
  

Now that you are well aware of the benefits let us look into the procedural aspects of life insurance policies for your children.

How to Choose Life Insurance for Children?

The financial market is filled with many companies who make tall claims about their insurance policies, so it becomes difficult to choose from the lot. However, there are basic parameters that need to be considered before buying life insurance for children.

• Premium payments – The cost of the premium is one of the primary concerns that every policyholder has while buying or renewing a policy. So, you must thoroughly check the offered benefits vis-a-vis potential premium payments to determine if the premium paid is cost-effective.
  
• Claim settlement ratio – Having a higher claim settlement ratio means that the claims made against the insurance policy get through resulting in payments of the amount. Therefore, having a good ratio ensures that your insurance company is credible.
  
• Flexibility options – It is important that you evaluate the flexibility options such as altering the premium fees or the term period etc. This ensures that in case of any requirement, you can get it changed seamlessly.
  

You can also get an online quote or call customer support for further information on any of the policy details.

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