What is a Dream Completion Children’s Plan?
A Dream Completion Children’s Plan is a type of life insurance policy that is specifically designed to help parents secure their child’s future dreams and aspirations. It is a long-term investment that provides financial support for their education, career, and other life goals.
Unlike traditional life insurance policies, which primarily focus on providing financial assistance in the event of the policyholder’s death, a Dream Completion Children’s Plan is structured to accumulate wealth over time to fund the child’s future dreams.
Key Features and Benefits
1. Savings and Investment Component:
A Dream Completion Children’s Plan combines the benefits of life insurance with a savings and investment component. A portion of the premium paid is allocated towards building a corpus for the child’s future needs.
2. Maturity Benefit:
The plan offers a maturity benefit that is payable when the child reaches a certain age, typically when they are ready to pursue higher education or start their career. This lump sum amount can be used to fund their education, start a business, or any other dream they may have.
3. Flexibility:
These plans offer flexibility in terms of premium payment options, policy term, and the amount of coverage. Parents can choose the premium payment frequency according to their financial capabilities, ensuring that the plan remains affordable.
4. Additional Riders:
Some insurance companies offer additional riders that can be attached to the Dream Completion Children’s Plan. These riders provide extra protection, such as waiver of premium in case of the parent’s demise or critical illness benefit for the child.
5. Tax Benefits:
Premiums paid towards a Dream Completion Children’s Plan are eligible for tax benefits under Section 80C of the Income Tax Act. Additionally, the maturity benefit is tax-free under Section 10(10D) of the Act, subject to certain conditions.
How Does It Work?
When a parent purchases a Dream Completion Children’s Plan, they choose the sum assured and the policy term based on their child’s future needs. The premium paid is divided into two parts – one part goes towards providing life insurance coverage, and the other part is invested to accumulate wealth over time.
As the policyholder, the parent pays the premium for the specified policy term. The plan continues to grow until the child reaches a certain age, at which point the maturity benefit is paid out. This maturity benefit is a lump sum amount that can be used to fulfill the child’s dreams and aspirations.
Who Should Consider a Dream Completion Children’s Plan?
A Dream Completion Children’s Plan is an ideal choice for parents who want to secure their child’s future dreams and aspirations. It provides a disciplined approach to saving and investing, ensuring that funds are available when needed the most.
Parents who are looking for a comprehensive financial plan that not only provides life insurance coverage but also helps in building a corpus for their child’s future goals should consider a Dream Completion Children’s Plan.
SUMMARY:
A Dream Completion Children’s Plan in life insurance policies offers parents the peace of mind that comes with knowing that their child’s dreams and aspirations are financially secured. It combines the benefits of life insurance with a savings and investment component, ensuring that funds are available when needed the most. By planning ahead and investing in a Dream Completion Children’s Plan, parents can provide their children with the best possible opportunities to achieve their dreams.