What are the Tax Benefits On Child Insurance Plans in India?

Child Insurance Plans and Their Tax Benefits 2022 in India

Do you know that child insurance plans allow several tax benefits? Would you like to avail the benefits under child insurance plans. Read on to know the various advantages of buying child insurance plans.

Every child deserves a bright future and it is the responsibility of parents to ensure that. So, what is the best way to protect the future of your child? Yes, you are right!  You can protect the future of your child with a child life insurance plan offered by a reliable and trustworthy life insurance company.

A child insurance plan helps to build a corpus for the future of a child as well as it makes sure that the child receives financial aid in case of unexpected death of parents. Hence, with a life insurance plan, you can benefit from both the objective of saving a corpus for his/her future needs along with getting life protection. Thus, it serves the purpose of both investment as well as insurance within one policy.

By buying a child life insurance plan at the time of birth of your kid or when the baby is very young, you can ensure to have a lump sum amount as security for the child’s future. This way you can make sure that your child could pursue his/her preferred higher education and career goals with the money saved.

Further, being a regular life insurance plan, a child plan allows the additional benefit of ‘premium waiver’. As per this benefit, if  the insured parent who buys the policy for their children dies suddenly during the term of the plan, the nominee – the child – is paid the benefits immediately. In addition, under child plans, unlike in other life insurance plans,  the policy doesn’t terminate with the death of the insured. Rather it continues till the end of tenure of the plan without any premium payments made towards maintaining the policy.

Also Read: Different Types of Child Plans Available in India

Tax Benefits on Child Insurance Plans

We have already discussed the benefits of child education insurance offered by life insurance companies in India. These plans take care of all financial goals of a child even if the parents are no more. However, along with all the above mentioned child insurance benefits, they also provide tax benefits to the insured.

Tax Benefits under Section 80C of Income Tax Act 1961 – The insured can avail yearly tax deductions of up to INR 150,000 under section 80C on the premium paid on a child insurance plan.

Tax Benefits under Section 10 (10D) of Income Tax Act 1961 – Another tax deduction that the insured can avail is on the lump sum maturity amount of the policy. So, whatever maturity the nominee receives is also exempted from tax under this section. Thus, along with tax deduction on premium, tax exemption on maturity is also available under a child insurance policy.

To Conclude

It is true that protecting the future of our children is our utmost priority. And a child life insurance plan helps in protecting and meeting the future educational and career goals of your child. These plans also help them when you are not around or in case of your sudden demise.

Moreover, a best child insurance plan continues even if the premium stops coming due to the death of the parents. Thus, it allows total benefit to the nominee including sum assured, and maturity benefits etc.

Hence, with so many benefits of child insurance plans, it can surely be termed as the best plan for your child in helping him/her live up to their future dreams. Be it their higher education, education abroad or other needs like marriage of your child, the child insurance plan can support in every possible way.

Also read: Why Invest in Child Insurance Policy?

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