Life insurance for kids might not be the first thing parents think about when they plan their money. But it’s something to think about. In India, more families are getting life insurance for their children. It’s popular because it helps save money and ensures they can get insurance in the future. Let’s look into why it’s becoming a big deal for lots of families.
Life insurance for kids is like insurance for adults. Parents pay money to an insurance company, and if the child dies, the company gives them money. But these policies aren’t mainly about the money if the child dies; they’re more about providing financial security for the future or it can be called an investment plan.
Life insurance or term insurance for kids has a big benefit: it builds up cash over time. These policies usually have a part that saves or invests money. Some of the money parents pay goes into this cash pot. The cash grows without being taxed until you take it out. As the child gets older, this money can be used for different things.
Another important thing about life insurance for kids is making sure they can get insurance later on or they can get a retirement plan after a certain age. Kids usually have fewer health problems than adults, so insurance for them can be cheaper. If parents get a life insurance policy for their child early, it means the child can get insurance later like child insurance plan at regular or even cheaper rates, no matter what their health is like.
School is one of the biggest costs for parents. Life insurance for kids can help with that. As the cash in the policy grows, it can be used to pay for things like college fees. Also, some policies let you borrow money from the cash pot, which can be handy for school costs.
In India, life insurance for kids comes with tax benefits. The money you pay for premiums can be deducted from your taxable income under Section 80C of the Income Tax Act. And when the policy matures and you get the money, you don’t have to pay tax on it under Section 10(10D) of the Income Tax Act. This makes it a good way for parents to invest their money without worrying about taxes.
It’s hard to think about, but kids can get sick or have accidents. When that happens, it can be really tough on the family financially. Life insurance for children helps with this. It gives money to the family if something bad happens to the child, so the parents can focus on helping their child get better without worrying about money.
Life insurance for kids in India isn’t just about money; it’s about making sure their future is safe. By saving money and guaranteeing they can get insurance later, these policies give children a strong financial start. Plus, they’re tax-friendly and can help pay for school. They’re a complete package for parents who want to protect their children’s future. So, even though it might seem unusual, getting life insurance for children could be a smart move for long-term financial security.
Life insurance for children can help build cash value over time, providing financial security for the child’s future and ensuring their insurability regardless of any health issues that may arise.
Cash value in a child’s life insurance policy grows over time through regular premium payments, accumulating interest, and potentially earning dividends, creating a valuable asset for the child’s future.
Yes, children can typically convert their juvenile life insurance policy into a permanent policy as adults, without having to undergo medical underwriting, ensuring continued coverage and financial protection.
