Best Child Insurance Policies

Child Insurance Policies: An Overview

A Child Insurance Plan is a financial tool that helps you secure your child’s future with dual protection. The premiums you pay get compounded over time and offer a lump sum amount for a child’s higher education. The life cover protects your child financially in case of your unfortunate demise. These plans help you save enough to provide a brighter future for your child.

Benefits of Child Insurance Policies

Child insurance policies offer a range of benefits, including:

• Financial security for your child
• Flexible payout options as per your need
• Life coverage
• Customized solutions as per your goals
• Helps to beat education inflation
• Tax benefits
• Creation of saving habits

This article is a comprehensive guide to child insurance policies, including the best child insurance plans, their features, and benefits.

Types of Child Life Insurance

There are two types of Child Insurance Plans: Child ULIPs and Child Saving Plans.

Child ULIPs

A child ULIP plan is a financial instrument that helps you save money for your child’s future. Your premiums are invested in market-linked funds, and a portion is invested to provide you with life cover.

Child Saving Plans

These plans also help you save money for your child’s bright future, but your funds are not invested in markets. They also offer various tax advantages under Section 80C and Section 10(10D).

In the next section, we have provided you with a table showing the Child ULIPs and Child Savings Plans.

Best Child Insurance Policies in India

We have provided you with a list of the best child insurance plans that you can choose from for your child’s secured financial future.

The above premiums are for a 30-year-old father having a 1-year-old child, paying premiums of Rs 1 lakh for 18 years, and a policy tenure of 18 years.

How Does Child Insurance Work?

Let’s understand how a child insurance policy works with a simple premium illustration.

Problem

Mr. Ramesh, a father of a 1-year-old child, was looking for a plan to secure his child’s future.

Solution

His financial advisor recommended he purchase a Child Insurance Plan. He bought the SBI Life Smart Scholar Plus Plan to fulfill the purpose.

Let’s understand how the SBI Life Smart Scholar Plus Plan works for him with a premium illustration table.

Key Takeaways

• Once the policy matures, Mr. Ramesh would receive a maturity amount of Rs 21,47,197 that he can use to incur future expenses for his child. In case of Mr. Ramesh’s demise during the policy tenure, his child would get death benefits of Rs 1 crore.

Features of Child Insurance

Here are some features of a child insurance policy:

• Life Coverage

  Child insurance plans offer life coverage to the policyholder so that the future of their child is secured even in case of their unfortunate demise.

• Partial Withdrawals

  Child insurance policies allow you to make partial withdrawals at certain life events, such as once the child reaches maturity age, or for the child's graduation.

• Premium Waiver Option

  In case of the policyholder’s demise during the policy tenure, the policy will continue, and all premiums are paid by the insurer. It ensures that your child is financially protected even in your absence.

• Choose Add-ons

  You can choose additional riders with child insurance plans to enhance your coverage options. Choose the riders that best fit your requirements.

• Sum Assured

  Child plans offer flexible sums assured to the policyholders to choose from. You can choose the sum assured amount that is suitable for you.

Benefits of Child Insurance Plans

There are several benefits of buying a child insurance plan. Let’s understand some of these benefits in detail:

1. Secures Your Child’s Future

   Child insurance plans secure the financial future of your child. They cover their future education and other needs.

2. Peace of Mind

   Buying a child insurance plan offers peace of mind for responsible parents. Even in the absence of parents, the future of the child is financially safe.

3. Helps to Beat Inflation

   We know that inflation is increasing every year. Education inflation is increasing even at a higher rate compared to normal inflation (approximately 15-20%). Child insurance plans help you beat the inflation index of the economy.

4. Higher Returns

   With Child ULIPs, policyholders enjoy higher returns as your funds are invested in the markets. As the economy grows, so will your money.

5. Saving Habit

   Child education plans create a habit of saving among people. These savings compound over time with child insurance plans and offer benefits in the future.

Key Takeaways

• You must buy a child insurance plan as soon as possible to get maximum benefits from it.
• Choose the premium amount you want to invest as per your affordability and future needs.
• Buy a child insurance plan to beat the current inflation rate, which may increase even in the future.
• You should choose add-ons wisely as per your requirements.

Documents Required to Buy Child Insurance Policy

Here is the list of documents required to buy a child insurance policy:

• Proposal form
• Identity proof (Passport, Voter ID card, Aadhaar, Driving license)
• Age proof
• Address proof
• Income proof (Salary slip if salaried or bank statement)

Conclusion

A Child Insurance Policy is an ideal option to secure the future of your child financially. You can choose your sum assured, policy term, premium payment term, and frequency as per your requirements. We have provided you with a list of the best child insurance plans to choose from, and you can consider them for buying.