Child Plans
  • Future Security for Child
  • Life Cover For Parents
  • Premium Waiver Benefits
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What Is A Child Plan?

Child Plan is a combination of savings and insurance that helps to design a secure financial future for your children. Such a financial corpus can be useful to meet your child's needs like education, marriage, etc.

Why Is A Child Plan Important For You And Your Child?

The life of a parent is full of executing important duties towards the child. Right from raising the kid from infancy to seeing him/her relax with their very own families -there are important matters one needs to attend to. Parents take care of everything related to the child and want to make sure that their child's every want is looked after with zero compromises.

This is where child plans come into the picture. Just invest in one and it will collect enough funds in the times ahead to take care of future expenses related to your child. And even if something unfortunate happens to you, you are confident that the needs of your children are taken care of when you aren't around.

Best Child Plans In India

What Are The Different Types Of Child Plan?

The types of Child plans vary from one insurance provider to another. Some are listed below for your reference:

  • Single-Premium Insurance Plan :- Single-Premium Child Plan requires a one-time investment, which is also subjected to discounts and other benefits.
  • Regular Premium Insurance Plan :- Regular-Premium Plan requires you to pay the premium at prefixed intervals. The frequency of premium payments may be monthly, quarterly, half-yearly or annually (as agreed upon).
  • Child Endowment Plan :- In choosing a Child Endowment Plan, you authorise your insurance provider to invest in the instruments of debt. Endowments Plans provide capital appreciation, while steadily adding to the growth of the fund with returns from investments.
  • Unit-Linked Insurance Plan (ULIP) :- ULIP plan is a combination of investment plans and life coverage. They invest the premium paid in equity instruments and debt instruments. Although the plan carries some amount of risk, it yields more returns than endowment plans in the long term. The policyholder also has the option to switch between funds after a certain waiting period.

Features Of Child Plan

Child plans are one of the best investment options, as they are loaded with multiple features like the generation of additional wealth, tax-savings, and more.

Listed below are some of the significant features of child plans:

  • Waiver of Premium :- The child plan has an in-built premium waiver, which is applicable when the parent dies. This feature may vary from insurer to insurer.
  • Sum Assured :- The sum assured for a child plan is usually 10x the gross earnings of the policyholder, which is paid out in the event of the demise of the parent or at maturity.
  • Partial Withdrawal :- Plans offered by various insurance providers come with the option of partial withdrawals (as and when the child turns 18 years).
  • Choice of Funds :- Child plans allow you to choose between different fund options such as equity, debt, money-market and hybrid. You also have the option of switching between funds after a certain period.
  • High Returns :- The return of child plans goes as high as 12%, which is well above the rate of inflation in the long term. Therefore, it not only protects your investments from getting eroded (as a result of inflation) but also contributes towards the steady growth of the fund.
  • Tax Benefits :- Child plans are characterised by the triple exempt benefit (EEE exemption), which implies that the investment (premium) is eligible for tax dedication, the interest earned is exempted from tax and income generated is also exempted from tax.

Best Child Plans In India

Here is a quick list to get you well-versed with the different criterion of some of the major insurance providers in the market:

Plan Entry Age Maturity AgeMinimum Annual PremiumSum Assured
Aviva Young Scholar Advantage Plan21-45 years60 yearsRs. 50000Sum assured is 10 times the annual premium
Bajaj Allianz Young Assure18-50 years60 yearsN/A10 X Annual Premium
HDFC SL YoungStar Super Premium18-65 years75 yearsRs. 1500010 X Annual Premium
Birla Sun Life Insurance Vision Star Plus18-55 years75 yearsN/AMinimum- Rs.1,00,000

Table Data updated on 27-08-2020

*The values may change as per chosen plan options.

Apart from the above-stated plans, we have prepared a detailed list of the top child plans in India.

What Is A Child Education Plan?

A child education plan offers comprehensive life insurance coverage along with the maturity benefits to cater to the future needs of your child. In short, the plan helps you to deal with the surging cost of education by building sufficient capital.

Benefits of Child Education Plan

The child education plan comes out with a bunch of benefits listed below.

Build a corpus

It helps you to build a corpus for your child's education and assists you to save sufficient savings for the coming future. On paying premium time to time, the plan will provide a lump-sum that will help the child to meet the educational expenses without any financial burden.

Medical treatment

These plans offer the convenience of withdrawals during the policy tenure. You can use this money for medical treatment in case your child falls ill.

Support the child in the absence of parents

The death of the parent can cause severe trauma to the child and can keep his/her future hanging. The plan offers a lump sum amount as promised at the time of purchase. Apart from this, if the insured opts for a premium waiver rider, the company will provide a premium waiver in case the parent passes away during the policy tenure.

Income benefit

A few of the child plans provide regular income to children that is equal to 1% of sum assured.

Things To Consider Before Buying A Child Plan

Look for essential features

Search for all the essential features and rider benefits to secure the financial future of your child.

Claim Settlement Ratio

Always make a point to check the CSR of the insurance provider. With a high claim settlement ratio, there is a significant probability for the company to pass your future claims.

Plan Tenure

Decide the tenure of the policy carefully, ensuring that your child gets all the benefits at the right age. For instance, if your child is below 10 years, (s)he has a lot of time to decide his/her education and career goals. So, the plan tenure should be around 10-15 years.

Fund Allocation

Wisely choose the fund allocation based on your child's age and needs like healthcare, education, wedding, and so on. Many policies offer different fund options with diverse risk factors. You can invest in equity and debt funds to get better returns for your child.

What Are The Different Types Of Child Plan Riders?

Child plan riders are additional benefits that you can add to your existing policy by paying a small premium.

Here is a list for the same-

Child Term Rider :- Child term rider provides death benefits in case of the demise of the child (before a particular age). However, after the child attains maturity, the term plan can be converted to a permanent insurance cover up to five times the original amount without the need for medical exams.

Accidental Death & Disability Benefit :- This rider provides an extra sum assured in case of an unfortunate event that leads to death or disability of the insured.

Critical Illness Rider :- Critical illness rider offers coverage for a predefined set of critical illness.

Premium Waiver Rider :- In case of the demise of the policyholder, the outstanding premium gets waived off, and the beneficiary will get the benefits at the maturity.

Income Benefit Rider :- This rider makes the child eligible to receive 1% of the rider sum assured every month in following occurrences:

  • Death of the parent.
  • Permanent disability of the parent due to an accident.
  • Parents being diagnosed with any of the critical illnesses specified in the policy.

How To Get The Best Child Plan?

You can log on to PolicyX.com to buy a Child plan. Below are the steps-

  • Find 'Free Quotes From Top Companies' given at the top-right corner of this page.
  • Submit the necessary details such as DOB, annual income, gender, etc.
  • Click on the tab 'Continue'.
  • Provide your phone number, name, and city.
  • Click on the tab 'Proceed'.
  • Check the available quotes from the top insurance companies in India.
  • Choose the desired plan and tap on 'Invest' at the right corner of the chosen plan.
  • Click on the tab 'Proceed to Buy'.
  • Enter your 'Email id' and click on the tab 'Submit'.
  • It will take you to the company's official website.
  • Make the payment using available payment options.
  • You will receive a confirmation along with the policy documents on your registered email address.

Note: In case of any query, feel free to connect on our toll-free number (1800-4200-269). You can also email us at helpdesk@policyx.com.

How Much Should You Invest In Child Plan?

To know this, it is vital to understand the growing expenses of the education industry. The cost of higher education is rising at 10-12% a year. Normally, a four-year engineering course can cost around 7-8 lakhs. In the coming six years, the cost is likely to touch 14 to 25 lakh. By 2027, it would cost around 28 lakhs.

You need adequate investment to counter such expenses. Normally, building a corpus of 1 crore may seem difficult, but it's not impossible to save this amount. You can make it with the help of a SIP of Rs 9,000 for 18 years in an equity fund at the rate of 15% per year. As the rate of inflation in the education industry is so high, you need compounding to work for you over a longer tenure.

How Does The Child Plan Work?

Mr. Kumar has a child of 6 years, and he wants to invest in a child plan for the higher education of his ward. He decides to invest in a child plan for 14 years with a sum assured of 10 lakhs. He plays the premium every year.

If he dies during the 8th year of the policy, the insurer pays a death benefit to the claimant, and all future premiums are waived off. The plan stays active for the rest of the years. At the time of maturity, the plan will provide a maturity benefit of Rs.10 lakhs to Mr.Kumar's child/claimant.

Documents Required To Buy

  • Age Proof: Copy of Birth Certificate, 10th or 12th mark sheet, Driving License, Passport, Voter ID, etc.(Anyone)
  • Identity proof: Copy of Driving License, Passport, Voter ID, PAN Card, Aadhar Card, which proves one's citizenship
  • Income Proof: Income proof specifying the income of the person buying the insurance
  • Address Proof: Electricity Bill, Telephone Bill, Ration Card, Driving License or Passport should mention the permanent address
  • Proposal Form: Duly filled in proposal form is required

How To File A Child Plan Claim?

  • To file a claim, you need to inform the insurance company about the crisis as soon as possible. You can do the same by visiting the official website of the company, visiting the nearest branch office, calling at their toll-free number or by sending an email.
  • You have to submit the claim form and other details of the policy such as the date, and cause of the crisis, the name of the nominee, etc.
  • Once you register the claim, provide other required documents and reports.
  • The company will now appoint an assessor to analyse the documents.
  • If it gets approved, and no further investigation is needed, the claim benefit will get transferred within 30 days to the registered account.
  • In case of rejection, you will receive the reason behind the same via call, SMS, Email, or post.

FAQs

1. What should be the minimum age to buy a child insurance plan?

For any child insurance plan, there is no such strict entry age as it varies from insurer to insurer. However, the minimum age to avail of a child insurance plan is 18 years (for the parent).

2. Can I take a loan on the Child Education Plan?

Yes. A person gets a loan of 90% against the principal account balance of the Recurring Deposit during the investment tenure. During the Benefit Phase, a person can take a loan at 75% against the remaining FD balance.

3. What is the range of minimum premium under the child plan?

There is no such restriction over the sum assured amount. However, the minimum premium amount starts from Rs. 500 per month. It may vary from insurer to insurer.

4. Can a minor be a nominee for my plan?

Yes, you can, but you need an appointee, who gets the benefits of the insurance on behalf of the nominee.

5. Who fixes the frequency of the payouts?

This is decided by the insured while investing in a child plan. The frequency is mentioned in the policy document.

6. How can I check the policy status?

For the same, you must first register at the e-portal of the chosen insurance company. After generating your password, you have to log in to your account and check all your policy details.

7. When can I withdraw money from a Child Plan?

You can easily withdraw the entire amount after the completion of 5 years (anytime) before the maturity date.

8. Can I buy child insurance for a 15 year old kid?

Yes, you can invest in a child insurance plan for a kid of 15 years through both online and offline modes.

9. Are the proceeds from the child plan tax-free?

Yes. The money that you withdraw from the child plan during the policy tenure is tax-free. Even the death benefit and maturity benefit is also tax-free.

10. When should I invest in a child plan for my child?

You should invest in a child plan as soon as possible. Ideally, it should be as soon as your kid is born. However, companies allow you to insure your child within the set guidelines of the entry age that varies from insurer to insurer.

11. Why is the beneficiary or nominee important in a child plan?

Beneficiary or nominee plays a vital role in a child plan. If the parent dies, all the money and authorities will be handed over to the nominee/beneficiary only.

Last updated on 27-08-2020