Everything You Need To Know About Withdrawing Money From A Child Plan
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Higher education is frequently portrayed as a long journey with several stops along the way, rather than a single goal. All of these stages should be covered in the best child plan without increasing your stress level. Child Plan includes a number of choices to assist you in meeting your child's financial requirements in the future. In this piece, we'll go over some of the benefits of a Child Insurance Plan to help you make an informed decision before purchasing one. The best Child plan will allow you to withdraw from the accrued cash without suffering any tax penalties or jeopardizing your investment. You may take numerous partial withdrawals from these sorts of Child plans while still investing in the next. The Child plan also allows you to invest in both your child's future education and marriage ambitions at the same time.
Withdrawals from the Child Plan
Partial withdrawals under Child Plans are permitted only once the lock-in period has elapsed. When you invest in Child Plans, you have many withdrawal alternatives.
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Withdrawals Prior to the 5-Year Lock-In
Every Child Plan normally includes a 5-year lock-in period. If the money is taken in part or in full by surrendering the policy or refusing to pay the premiums, the monies collected can only be returned once the Child Plan investment has been in place for five years. The maturity amount will be paid in a single payment as well, and any additional costs will be applied when the policy is canceled. Because your Child Plan life cover will become null and void if you withdraw before the lock-in period, you will need to buy it online.
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You can withdraw after a 5-year lock-in term.
After the lock-in period on your Child Plan has expired, it is normally advised that you make partial withdrawals rather than withdrawing the full amount. Instead of canceling your whole policy, breaking your fixed deposits, or taking out loans, you can overcome financial problems by making partial withdrawals. Withdrawals are subject to particular restrictions, which vary based on the firm's policy terms and conditions.
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Important Factors to Consider When Withdrawing From A Child Plan
1. Understand the withdrawal's terms and conditions.
2. Pay your premiums on time or early to prevent having your coverage canceled.
3. Only after 5 years of steady premium payment are partial withdrawals permitted.
4. Partially withdrawn funds cause a reduction in the Sum Assured for two years from the time the funds are taken.
Conclusion
To make partial withdrawals from a Child plan, all that is required is that the premiums be paid on time. If the policyholder fails to pay the premiums on time, the policy will be terminated and the withdrawal benefits would be forfeited. So, if you're considering canceling your kid plan, make sure you've made all of your previous payments to avoid getting canceled.
Also read- The Value of a Premium Rider Waiver in a Child Education Plan
