Secure your Newborn Child’s Future with Child Plan

Your mind is crowded with numerous wonderful possibilities for your child. Yet, this is accompanied by the realization that it will take financial discipline to accumulate enough to provide your child the very best.

Needless to say, this will require your constant attention and efforts, besides supervision. But what if fate were to suddenly snatch you from your child’s world? Who will then provide your child with what he/she needs and deserves? Thankfully, your child’s future and dreams can remain secure and unhampered due to financial constraints, even in your absence. Here’s how.

Even before you make your first investments for your child, you need to ensure financial security for your child with the help of life insurance. If you don’t have life insurance coverage yet, you can buy a life insurance policy in the child’s first month itself. The whole process can get over in as less a time as 15 minutes if you buy the policy online. Money from a life insurance plan will not only ensure that the regular living expenses are met but also provide for the child’s future needs like higher education.

With a wide variety of life insurance policies offered by life insurance companies, the issue is which type of life insurance you should buy. Broadly there are life insurance plans that provide only financial protection and those that combine financial protection with investment. To get started in securing your child’s future, we suggest that you buy a term plan. These life insurance policies provide a high level of protection at affordable premiums.

When scouting for the best term plan, ensure that you take the term plan with the longest possible term. Good term plans provide life insurance coverage of up to the age of 70-75 years and a period of up to 40 years. This will ensure that your child and other family members stay protected until you have saved enough.

It is important to buy the term plan early. If you are seeking to secure your newborn child’s future, you can do this in the child’s first month. If you buy the term plan when you are young, you will benefit from the low premiums. You will continue to pay the same low premium until the end of the policy term. Just in case you need higher life insurance coverage later, you can buy another term plan.

Good term plans also provide choice in terms of death benefit payout. You can choose between a lump sum payment and a mix of lump sum and a monthly payout. The choice can be made based on the anticipated requirements of the surviving spouse.

There is an added advantage of term plan in the form of tax benefits. You get an annual tax deduction for premiums of up to Rs 1.5 lakh under Section 80C. The death benefits are also exempted from tax under Section 10(10)D. This means tax-free death benefits are received by the nominees of the policyholder in case of an unfortunate event. That’s not all.