Having a child can be one of the most thrilling phases of your life. Right from the first time of holding your baby to getting your child married, you might cherish every minute of your parenthood. Since your child can be the apple of your eyes, you might look forward to fulfill every responsibility of your kid. Until your children settle financially, you might have to meet their expenses.
As a parent, you might have accumulated funds for the safety of your child in the long. However, your hard-earned savings might not suffice to accomplish their long-term financial goals. Therefore, you should purchase term insurance to offer additional financial protection to your child in your absence.
Before you purchase term insurance to protect your child’s future, let’s first understand what is term insurance in detail:
Term insurance plans can act as risk coverage during an unfortunate event. After your demise, your child receives a death benefit to help them maintain their standard of living in your absence. Ideally, you should purchase term insurance plans for 40 years if you wish to secure your child’s future over a long period.
After having a child, buy the term insurance plan in the first month. If you purchase a term plan when you are young, you can pay low premium until the end of the tenure of the policy. However, if your premium amount gradually increases later, you can buy another term plan to protect your child’s future at an affordable cost.
Under a term policy, you can receive more benefits at a low cost. The term insurance benefits can provide a healthy environment to safeguard the academic and professional future of your child. Therefore, let’s go through the following benefits mentioned below to protect your child’s future:
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As a parent, you should consider your child’s financial interests and aspirations. When you evaluate the financial requirements of your loved ones, you would be able to understand the sum assured value. The selected sum assured value can provide financial protection to your child in your absence. Since your children can be your immediate beneficiary, you can choose to decide whether they should obtain a monthly income or a lump-sum amount.
A term insurance plan includes an additional tax-saving advantage. According to Section 80C of the Income Tax Act, 1961, you can claim a tax deduction up to Rs. 1,50,000 on your taxable income. Additionally, your insurance company can provide a tax-free death benefit to your child after your demise, as per Section 10(10D) of the Income Tax Act, 1961.
Under a term policy, you can receive a substantial corpus at a low rate. Due to low premiums, you have an ample amount of savings in your hand to make investments. While protecting your child’s future with a term plan, you can easily accumulate enough resources for your future. For instance, you can obtain a life coverage of Rs. 1 crore by investing Rs. 500-600 every month.
In a nutshell, a term plan can allow your child to reach the sky without worrying about any financial constraints. With a term plan, your little ones can easily meet their aspirations to ensure a bright future. Since term plans can be affordable, you wouldn’t have to worry about spending extravagantly on your child. Use a term insurance calculator before selecting the perfect term plan for yourself.