Questions To Ask Before Buying A Child Insurance Plan

There is nothing more rewarding than seeing your child succeed in their career. What is even more rewarding is to feel good about the fact that you could contribute financially in their journey to achieve success. More and more parents are becoming aware of the importance of investing in a child insurance plan. A child plan is an investment as well as insurance that secures your child’s future. These plans provide you the flexibility to invest in your child’s future based on your financial status. However, given the plethora of options to choose from, it is not unusual to get overwhelmed. Here are a few questions to ask before buying a child plan.

  • What are you saving for?

This is a good question to ask yourself before you start saving. Are you planning on saving for your child’s bachelor’s degree or master’s as well? Would you want your child to study overseas? All these questions are important while investing in a child insurance plan since it may give you multiple policy options to choose from.

  • When to start planning?

The sooner you start investing in a child plan the better. Start right after your child is born. It will give you more time to save enough money.

  • What should the tenure of the plan be?

The minimum maturity period for a child insurance plan should be at least 10 years. There is no shortage of short-term plans, but you may be faced with a cash crunch. The bottom line is that the tenure of your plan should depend on the age of your child when you begin saving.

  • Will you be allowed partial withdrawals?

You never know when you may need the funds. The ability for partial withdrawals can come in handy for unconventional educational expenses.

  • Does your policy include a premium waiver?

In case of the policy holder’s demise, the outstanding premiums are waived the nominee gets a lump sum amount after the maturity period. These benefits come in handy in case of unfortunate emergencies.

  • Will it help you save taxes?

The premiums you pay for a child insurance plan are eligible for tax exemptions under Section 10D of the Income Tax Act, 1961.

A child insurance plan is a great financial asset for your child and your family. Ask these questions before buying a policy and you will be just fine.