What is a Child Plan?
For every parent, their kid is the topmost priority. The upbringing of a child needs excellent financial planning and therefore the sooner one begins it, the better. It is the best financial plan, investment plan and the best-suited policy for your child because it ensures continuing education and a secure future. It makes sure that the child receives all financial aid he needs for overall development in all the years of growth.
Benefits of A Child Plan
A child plan is a scheme to secure your child’s future. It takes care of your child’s desires in your absence and it also brings a substantial amount, time to time, to fulfill various milestones in your child’s life.
Instrument For Child’s Education
Take it because of the most basic, yet most effective profit. Even minimum premium payment helps you to secure significant returns for your child’s education, as high as ten times the paid premium. as an example, you purchase a policy with a premium payment of INR 12,000/-. You become eligible to redeem INR 1,20,000/- at the time of want when you might want to pay faculty fee, higher education fee or overseas education.
Aid For Child’s Medical Expenses
Child plans have a major profit that they are available with a provision of partial withdrawal of a lump sum amount, even if the policy has not reached maturity. this can be very useful in the unfortunate event of hospitalization of a child just in case of severe illness or accident. This amount covers the medical expenses adequately and also act as an add-on to your existing health insurance.
Major Support For child In Parent’s Absence
The arrange comes with features like a waiver of premium, death benefit and lump sum payout at maturity. which means, within the unforeseen circumstance of the parent’s death, the child isn’t responsible to pay future premiums, gets the payment assured, and another payout at the time of maturity of the plan.
Investment For Creatively talented kids
Children in inventive fields like cinema, artists, and singers start to earn at a very young age. One will invest that financial gain in a child plan to protect it and substantiate it in the later years. Capital generation over the years can always be security for the child’s entire life.
Two types of Maturity benefits To the child
Child schemes provide maturity benefits in 2 ways
1. a reimbursement option; which means the child gets assured returns per annum after a number of years of the policy becoming active. This helps at education, higher education, and courses abroad, etc
2. lump sum payout at the maturity of the plan. you’ll take into account your financial condition and wishes, to decide on the best possibility for you. this is a large amount that helps in important events like the wedding of the child or buying a house.
Collateral For Child’s Education Loans
Many financial establishments allow child plans to be kept as collaterals against the loan being searched for education abroad, college education, or to fulfill other child desires.
You can avail tax advantages under a child plan on death or maturity claim profits under section 10 (10D). Moreover, the premium purchased a child education plan is eligible for tax deduction under section 80C of the income tax Act, 1961.
At the time of maturity of the child plan, the add assured is paid resolute the guardian or parent. within the event of the first death of the insured, the kid is allowed to get all the advantages of the child plan.
You can additionally avail secured loans against a child education plan.
Types of child Plans
Mostly all the insurance providers offer child insurance policies as an important insurance product within the portfolio. These child plans might vary on different parameters basis the individual priorities and wishes and are available handy with customized and tailor-made features.
Different types of child Plans in India are:
Single-Premium child plan
The customer pays a lump sum amount within the kind of one premium for the whole policy term and stays worried free from remembering the due dates of premium payment. You’ll not need to come across any hassles of creating an arrangement of finances for the premium payment. Some insurance providers in addition provide appealing discounts or reduce the premium on child plans.
Regular Premium child plan
This way you pay more but you do not have to pay a large amount, you can divide it into smaller parts. you’ll pay the premium monthly, quarterly, half-yearly, or yearly.
Child ULIP plan gives you a three-prolonged benefit, together with higher insurance coverage, contribution within the equity market, and disciplined investments. three benefits mean that the nominative beneficiary, i.e. the child receives the total assured on the death of the insured parent or guardian. the future premiums are waived off and also the maturity amount is paid when the policy matures, ensuring that the future dream of your children is fulfilled.
Traditional child Endowment plan
The premium is invested in debt instruments while the decision is at the unbroken with the insurance company. The bonus payable at maturity decides the returns.
How is it different from a Term Plan?
|Condition||Term Plan||Child Plan|
|In case the Policyholder dies||The death benefit is paid and the policy comes to an end||The death benefit is paid and the policy continues as the insurer pays rest of the premiums.|
|In case the Policyholder survives||No Maturity Benefit||Maturity Benefit|
Best Child Insurance Plans in India
HDFC Life Click2Wealth
Type of Plan-ULIP
Policy Term-Minimum: 10 years Maximum: 40 years
Maturity Benefit: policyholder gets fund value on the end of the policy, all maturity payment get in one single lump sum payment.
Death Benefit: in HDFC Life Click2Wealth policyholder also get death benefits.
Death of the Proposer*: Equal sum of modal premium credited to Fund Value. -Return of Mortality Charges –
Partial Withdrawal -Settlement Option -Top-up premiumsPlan Benefits-
ICICI Pru Smart Kid
Type of Plan-ULIP
Policy Term-Minimum: 10 years Maximum: 25 years
Death Benefit: Lump Sum Benefit
Smart Benefit -Maturity Benefit: You’ll receive the Fund Value that will include top-up fund value (if any)
ICICI Pru Wealth Plus – Rising Star
It is a ULIP plan, its limit is at least 10 years and the maximum is 20 years, in which you also get maturity benefit, which is becoming very popular nowadays.