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Term insurance is one of the life insurance products which you can buy for the financial security of your family in your absence. And since it secures the financial future of your family, your child is included too. In an event where the policyholder dies within the term insurance policy tenure, a lump sum amount is offered to the nominee of the plan. The premiums payable under a term insurance plan are much more affordable as compared to the other types of life insurance products. This kind of plan can be bought at any stage of life and a policyholder can even customize the plan, as and when required. To get even more benefits, policyholders can even buy riders by paying an additional premium.
Read More: Best Term Insurance Plans in India 2022
A child insurance plan is an investment as well as a life insurance cover. This is one of the most sought-after plans that is opted by parents for the security of their children’s future. Child insurance contains two components such as investment and life insurance. Therefore, the life insurance component helps in securing the financial future of the child in case of the death of the parent; and the investment component helps in covering the education cost or marriage expenses of the child, depending on the returns earned.
Read More: Best Child Insurance Plans in India 2022
For more clarity, let us discuss some of the key differentiators between both of these insurances.
The premiums that have to be paid under a child plan totally depend on the chosen coverage and the benefits. The insurance provider continues investing in the child insurance plan even after your demise. On the other hand, term insurance plans are known for their affordability. To get an estimate of the premiums, you can even use a term insurance calculator, which is easily available online. After the sudden death of the policyholder, the nominee is offered a lump sum amount by the insurer.
Upon the death of the parent, their children get a lump sum benefit under a child policy. Likewise, even in a term insurance policy, a lump sum benefit is paid to the nominees of the policy.
Under your child insurance plan, you will be able to make partial withdrawals. However, under a term insurance policy, you will not be allowed to make a partial withdrawal. Only if you have a critical illness cover and you are diagnosed with one such illness, you will get a lump sum amount from the insurance provider. The money you get from there can be used for your treatment and hospital bill payments.
As the payouts are concerned, under a child plan, the children receive money at specific intervals. Under a term insurance plan, the only payout is the death benefit received by the nominees.
You can claim a tax deduction of the premiums that you pay for child insurance under Section 80C of the Income Tax Act. And the benefit received from the policy under Section 10(10D) of the Income Tax Act, 1961 is tax-free. The term insurance tax benefit is exactly the same as the child plan; the only difference is in the critical illness cover. You can get a tax deduction under Section 80D of the Income Tax Act, 1961 when you have a critical illness cover.
Here we mention some of the best and most sought-after child insurance plans as well as term insurance plans that you can find in India.
Some of the top term insurance plans that you can go for in the country are:
A few of the child plans in India that you can totally trust are:
You can compare these plans and then make an informed decision that best suits your family’s needs. No matter which plans you choose, it is going to provide benefit to your family when you are not around anymore.
Also read: How Is It Beneficial To Buy Term Insurance Online?
Browse PayBima Blogs to read interesting posts related to Health Insurance, Car Insurance, Bike Insurance, Term Life Insurance, and Investment section. You can visit PayBima to Buy Insurance Online.
PayBima Team
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.
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