As the name suggests, a child plan is an investment option offered to parents who wish to provide their child financial support. Child plans are a mix of investment and insurance designed to aid in financial support for children's needs and requirements, safeguarding their future. One can protect their child's future by purchasing child insurance plans combining them with child education plans.
The life cover under the best child plans is usually available as a lump sum payout on maturity along with the option of flexible payouts at important milestones in said child's life. Be it in savings, educational needs, life cover, and alike; a good child plan will ensure that the beneficiary of the purchased plan with receive the right guidance and security towards building his/her future. In a world where expenses are skyrocketing with regards to education and medical facilities, among others, it is imperative to invest in one of the best child plans available in the market.
Why Should One Invest in a Child Plan?
The surging cost of education is the biggest concern among parents. Monthly savings may not be enough to adhere to these costs. To be able to see one's child stand out and strive in this competitive atmosphere of today, the rising educational costs can surely put a halt to that, which is not a compromise one should make for his/her kid. Several child plans come loaded with numerous benefits such as life coverage, building a solid financial backing as well as add-on riders which further enhance the already purchased policy.
Typically, a child plan provides a life cover of nearly 10 times the yearly premium. Furthermore, these plans also offer partial withdrawal facilities as per the requirement. The icing on the cake is tax benefits that one can avail from investing in some of the country's best child plans. If all of this is not reason enough to invest in one's child's future, then what is?
Features and Benefits of Child Plans
Insurance plans for children come riddled with a never-ending list of useful features that ensure lucrative returns and consequent protection. In addition to the obvious features, various such plans also offer a range of exciting and unique benefits for the policyholder. In addition to the variety of benefits for the insured child, they also offer comprehensive maturity benefits along with a life cover. Let us look at some of the key features and benefits of India's best child plans.
Key Features of Child Plans
Here is a rundown to the salient features offered by Child Plans:
Premium Benefit Waiver
The waiver of premium is one of the most inherent key features of a child plan. This applies in the unfortunate circumstance of the parent's untimely demise. If such an unsavoury situation should occur, the sum assured is paid out to the nominated beneficiary, and the insurance company pays off the due balance premium. After the policy's maturity, the insured child is entitled to get the maturity sum, as mentioned in the clause during inception. Often, the best child plans have this stipulation in their terms. However, in case it is not included, it is advised that this clause is opted for at the time of policy purchase.
The sum assured is the amount of money that the insured child is entitled to receive in the case of the unfortunate or untimely death of the insuring parent. Typically, the sum assured is more than ten times the policyholder's gross earning at the said time. This ideally means that the sum assured must be no less than ten times the income at the time of death. There are two types of premiums under this feature as mentioned below;
Single-Premium - As the name suggests, this involved a lump sum one-time premium payment to avail the benefits of the policy.
Regular Premium - Under this mode of premium payments, the money can be paid in pre-decided installments and can range as per the buyer's convenience. These installments can periodically be paid annually, bi-annually, and quarterly.
Quite often, parents need to make due payments for their children at regular intervals for expenses incurring from various important milestones of their lives. Such milestones include school fees, further education costs, weddings, etc. The partial withdrawal feature allows parents to be able to withdraw part of the amount that one would expect at maturity. This amount is taken in multiple fragments to cater to various financial needs in the key elements of a child’s life span. Most of the child plans available in India offer this option of partial withdrawal after the insured child becomes an adult, i.e., complete 18 years.
Tax Saving Advantages
The most lucrative feature offered by India's best child plans comes with a tax-saving benefit. All the plans fall under the highest bracket of exemption from tax, which is the E-E-E category. In comparison to various other tax saving plans in the country, investing in a child plan will ensure that the parent can save large sums of money, which would otherwise need to be paid to the government as a tax. According to Indian law, these plans give an even better option to save money as compared to options such as mutual funds, fixed deposits, and even PPF. *Tax benefit is subject to changes in tax laws.
The maturity amount is a very important aspect to consider before investing in your child's desired policy. This needs to be meticulously calculated to ensure that his/her future be bright and not be hampered due to financial shortcomings. It is also imperative to keep in mind the inflation rate and other relevant factors, so the expected maturity amount is paid out at the end of the policy term. One can choose to take the entire sum as a lump sum at maturity or in installments spanning up to 5 years.
Many single premium policies do not offer appropriate maturity sums, so reading the desired plan's fine print is a must. Various financial consultants are readily available to give you sound advice while you are deciding to purchase the policy. One can get details for the same on the official website of Paisawiki, where their customer care game is on point. (*Paisawiki does not endorse, rate, or recommend any particular insurer or insurance product offered by an insurer.)
Instant Financial Protection
In a sad situation of the parent's death, child plans pay a one-time lump sum amount. The child can do so in place of the earning member to ensure the policy stays active, continuing to safeguard his/her monetary gain for the future. This amount will be completely tax-free (*tax benefit is subject to changes in tax laws) and often is more than enough to be able to pay off any debts at the time of the insuring parent's death.
This is a great feature of investing in child plans, which enable the child to not have his/her life affected by financial constraints. Taking into consideration the current coronavirus pandemic, the government has reduced the interest rates of many such best child plans. Not only now, but it is also expected to slash rates further, working proudly towards making India a developed country of the world.
Unless otherwise specified, all market-linked children's policies generate returns above 10% - 12%. Many government-run schemes offer comparatively much lower returns, which do not beat inflation costs. Furthermore, such schemes can also keep you locked in and subject your money to risks caused due to fluctuations in the market. This results in undulated interest returns.
Deciding when the policy matures is one of the most important features of child policy. When the parent plans the policy's maturity to be in tandem with when he/she wishes for their child to reap the benefits of the maturity amount, the child plan is the most effective then. Ideally, if your child is 12 years old, you can choose a policy term of 10 years. This helps in giving your kid the financial aid at a time of the parent's choosing.
Amount of Premium
The premium amount is dependent on the sum assured and the amount of maturity that is opted for when purchasing the policy. This amount can be paid in installments of the purchaser's choosing. Often parents pay the premium amount based on their convenient incomes so some can pay more frequently than the others. Almost all the child plans offer the option of paying this amount at regular intervals, ranging from monthly payments, quarterly payments, half-yearly payments as well as yearly payments. The amount of premium varies from plan to plan, depending on the sum assured that is selected at the purchase time.
On various child education plans, parents can avail loan facilities if needed. This is a great feature of several such children’s policies and further help with educational finances if and when needed.
Choice of Funds
Many child education plans such as ULIP plans allow the insuring parents to pick the type of funds to invest in, such as money market, debt, equity, and hybrid funds. Additionally, options such as systematic transfer plans and dynamic fund allocation are also provided if needed.
Options of Rider Add-Ons
Many of the best child policies have an in-built feature of the premium waiver benefit. In this, the child is paid a lump sum amount in case of his/her parent's death. It also completely waives off the balance premiums to enable the child to be able to secure his/her future. In case this benefit is not part of a child policy one desires to purchase, it will allow the insured to be able to buy this facility as an add-on rider. Not only this, one can choose from several other such additional rider benefits to further safeguard their policies. Critical illness rider, accidental death rider as well as disability caused by accident are some such add-ons.
Core Benefits of Child Plans
Now that several child plans' main features have been generically covered, the benefits are not far behind. There is a range of advantages associated with child plans, including a generous maturity benefit and a life cover, educational requirements coverage, medical aid, and many more. In a world where inflation is skyrocketing, and finances need to be treated with the utmost care, a good policy for one's child will not only ensure that he/she gets a hassle-free future but will also take a load off the parent's stress levels. Stated below are the benefits of investing in some of the best child plans available in India.
Aggregation for a Child’s Education
With each passing year, the demands for a finer lifestyle keep nagging at parents. To ensure that their kids have a fruitful and bright future, investing in a child plan is a no-brainer. A good child plan aids in creating a financial corpus towards the betterment of the said child. Timely premium payments enable the kitty to keep growing deeper, offering a sizeable sum to the child so that he/she can pursue their education without the worry of expenses. This not only takes a load away from the child but also gives parents the satisfaction of zero compromises when it comes to their family's lives. Child education plans are usually sufficient to be able to pay for school education, college education, and even abroad for further studies if and when needed. This amount depends on the terms and conditions of the selected plan and the amount invested in the policy.
Support after Parent’s Death
Death is an inevitable and often unexpected consequence of living. In such a case, no amount of preparation or pre-planned schemes can avoid it. In case of the untimely demise of a parent, the sufferer is always an innocent child. Not only is this death traumatizing for the kid, but also, his/her future can very well be hanging by a thread. Some of the best child plans offer an option of the premium waiver benefit in case of the insured parent's passing during the policy's active term. This premium waiver advantage is in-built with most of the best education plans, and for those that are not backed with this, can be purchased as an add-on rider. This benefit pays the beneficiary a lump sum amount as decided at the time of policy purchase in case of the parent's death. Additionally, it also forfeits the balance premium payment amounts, relieving the child from any financial payments to be made.
Medical Treatment Kitty
Investment plans for children, permit the withdrawal of money during the policy's active tenure in pre-decided installments. God forbid if the child falls ill; this money can be used to cover medical expenses such as hospitalization due to ailments, diseases, injuries caused by accident, and various other serious medical conditions. Child insurance plans help in reducing the financial burden, such as medical emergencies, can incur. This can be purchased with many of the in-built best child plans or bought as an add-on rider.
There are several add-on rider benefits associated with several child plans, which one can choose to enhance the already existing policy and further safeguard their children's’ lives. Many of these need to be purchased at the inception of the policy; however, some also allow one to opt for these during the current term as well. The following mentioned add-on riders can be opted for;
- Critical Illness Rider - This type of rider offers coverage for expenses incurred due to a set of critical medical conditions. This rider is a great way to get rid of the stress caused due to such unsavoury circumstances. It is important to note that the critical rider add-on applies only to pre-determined illnesses.
- Premium Waiver Benefit - This benefit is offered as an add-on advantage in cases where the policy does not have it already built-in. This benefit pays a lump sum amount to the child in case of the insuring parent's death and waives the balance premium payment amounts, ensuring that the child does not have to risk his/her future due to lack of financial aid.
- Accidental Death and Disability Add-on - This add-on benefit pays an extra sum assured in the event of a death caused by accident. It also covers any disability caused to do accidents. This benefit can be purchased as an additional facility to safeguard the interests of both the insured as well as the beneficiary of the policy.
Partial Withdrawal Facilities
In today's day, just being book smart is not enough. Street smarts also account for a lot in securing a good future for children. In addition to the study, if a parent wants to encourage his/her child's talents, such as playing an instrument, singing, dancing, and many others, a good education plan will allow withdrawals to be made in partial amounts so that these talents can be financed. Many plans also offer timely payouts, which can also be utilized towards the expenses that occurred during the pursuit of the kid's talents. This amount can go a long way in covering extra classes, special tuitions, and even events across the globe if needed.
Several child saving plans generate a regular income for the children. This amount is calculated as 1% of the sum assured at inception. This is a good way for a kid to get his/her dues in case the parent is no longer able to pay the premiums due to extreme reasons.
Collateral for Higher Education
A good education is expensive, but one can never really put a price when it comes to their children's future. Higher studies, be it within an educational institution within the country or a prestigious establishment abroad, can often incur exorbitant costs, which are daunting. The latter, more often than the former, is usually significantly more expensive, and a solid child plan is the most efficient way to be able to meet this expense. To be able to procure a loan for further studies, parents often tend to take a loan, which may or may not be rejected. At such a time, if a child's plan is handy, one can easily avail of this loan by using this plan as collateral against the amount. Not only for this reason, but child plans can also be used as collateral for other borrowings that may be needed for a kid's requirements. Generally, investing in an education plan creates a need to save and instils discipline in a parent.
Types of Child Plans
There are several types of child plans available in India. Ranging from life insurance plans, medical insurance policies, education plans, and alike, it can become quite the task when one is trying to purchase the scheme that fits their requirements and budgets accurately. Every plan has its pros and cons, and one can pick from the one that works best for their children. Almost all the insurance providers offer kid's insurance policies as an important product to be kept in one's kitty.
These plans vary based on different parameters such as endowment plans, unit-linked plans, money back plans, etc. These can be invested in as per the buyer's priorities and can also be further enhanced with additional features to spruce up the coverage value. Stated below are the types of child plans offered by competent insuring companies in the country;
Regular Premium Child Plans
A regular premium child plan typically offers a whole lot of flexibility in payment as opposed to one-time lump sum payment single premium policies. Policyholders of such types of policies can opt to pay their premium amounts in periodic installments. These installments can range from monthly payments, quarterly payments, bi-annual payments, and yearly payments as decided at the time of inception of the chosen plan. For those who are salaried and prefer to make small payments instead of large ones, this type of plan is the best option.
Single-Premium Child Plan
As the same suggests, these types of child plans allow the policy purchaser to make a lump sum one-time payment at one go, so should he/she desire to do so. This relieves the policyholder from periodic payments and leaves them worry-free in terms of keeping track of the due dates and adhering to timelines related to paying premium installments.
Many insurance providers offer rather generous discounts for those looking to pay a single premium, which furthermore reduces the total policy cost. Single premium plans make for a good option for those who want to have their children financially insured without dealing with a lapsed policy or other hassles related to periodic installment payments.
Traditional Child Endowment Plans
Child endowment plans are essentially the same as traditional life insurance policies, which offer a lucrative combination of savings and investment. These types of plans allow the policyholder to save money over some time while building their insurance kitty. They also pay a lump sum amount to the beneficiary in case of death of the policyholder as well as a maturity amount to the policyholder at the end of the policy term in case of his/her survival until that time.
Child endowment plans act as financial aid for benefiting the future of the insured child in question. The premium paid in such schemes is usually invested in debt instruments and this decision on how to make such investments lie solely in the insuring company's hands. The bonus which is payable at the term end of these plans usually deciphers the amount of return payable.
Child ULIP Plans
Child ULIP plans (Unit linked insurance plans) give their policyholders and beneficiaries three key advantages - namely, high insurance coverage, disciplined investments, and contribution to the equity markets. These three advantages mean that the beneficiary i.e., the child stands to receive the sum assured in case his/her insuring parent or guardian passes away due to unforeseen circumstances.
Furthermore, the maturity amount is paid to the child as a lump sum amount, and the balance premium payments which need to be made until the end of the policy term are completely waived off. These policies are specially designed to ensure that the child does not lose his/her chance at a bright future despite losing a parent/guardian.
The Best Child Plans
Raising a child in today's day and age is not an inexpensive task. Gone are the days when children would not need extra attention. The world is growing by leaps and bounds, and parents are under constant pressure to provide the best they possibly can for their children. Every child differs from one another, and it is imperative to choose the best policy for a child when it comes to encompassing their needs and enhancing their talents. The ideal resolution to tackle this problem of expenses is by ensuring that a foolproof child plan is invested in at the right time, keeping in mind all the pros and cons. Below mentioned are some of the best child plans available in India;
|Name of the Child Plan||Minimum Yearly Premium||Age at Entry||Age at Entry||Maximum Age at Maturity||Minimum Sum Assured|
|AEGON Life Rising Star Insurance Plan||Rs. 20,000/-||18 to 48 years||18 to 48 years||65 years||10 times the sum of the regular yearly premium|
|Aviva Young Scholar Secure Plan||Rs. 50,000/-||21 to 50 years||21 to 50 years||71 years||10 times the sum of the yearly premium|
|Bajaj Allianz Young Assure Plan||Not applicable||18- 50 years||18- 50 years||60 years||10 times the sum of the yearly premium|
|Bharti AXA Life Child Advantage Plan||Depending on the minimum sum assured||18- 55 years||18- 55 years||76 years||Rs. 25,000/-|
|Birla Sunlife Insurance Vision Star Plus Plan||Not applicable||18- 55 years||18- 55 years||75 years||Rs. 1,00,000/-|
|Canara HSBC Smart Junior Plan||Not applicable||18- 50 years||18- 50 years||70 years||10 times the sum of the annual premium|
|Edelweiss Tokio Life EduSave Plan||Rs. 6,968/-||18- 45 years||18- 45 years||60 years||Rs. 2,25,000/-|
|Exide Life Mera Aashirwad Plan||Not applicable||21- 50 years||21- 50 years||65 years||Rs. 3,50,000/-|
|Exide Life New Creating Life Plus Plan||Not applicable||18- 45 years||18- 45 years||60 years||10 times the sum of the annualized premium|
|Future Generali Assured Education Plan||Rs. 20,000/-||21- 50 years||21- 50 years||67 years||Not Applicable|
|HDFC SL Young Star Super Premium Plan||Rs. 15,000/-||18- 65 years||18- 65 years||75 years||10 times the amount of the yearly premium|
|HDFC Life Young Star Udaan Plan||Rs. 24,000/-||30- 60 days||30- 60 days||75 years||Depending on the premium, age, and term|
|ICICI Prudential Smart Kid Solution Plan||Rs. 48,000/-||20- 54 years||20- 54 years||64 years||Rs. 45,000/-|
|IndiaFirst Happy India Plan||Rs. 12,000/-||18- 50 years||18- 50 years||60 years||The higher side of 10/7 times of the yearly premium or 0.5/0.25 term yearly premium|
|Kotak HeadStart Child Assure Plan||Regular : Pay - Rs.20,0005 pay - Rs.50 and 00010 pay - Rs.20,000||18- 60 years||18- 60 years||70 years||Higher side of 10 or 7 times the yearly premium or 0.5/0.25 term yearly premium|
|Max Life Shiksha Plus Super Plan||Rs. 25,000/-||21- 50 years||21- 50 years||65 years||Rs. 2,50,000/-|
|PNB Met Life College Plan||Rs. 18,000/-||20- 45 years||20- 45 years||69 years||Rs. 2,12,040/-|
|Pramerica Life Future Idols Gold Plan||Rs. 10,800/-||18- 50 years||18- 50 years||65 years||Rs. 1,50,000/-|
|Reliance Life Child Plan||Rs. 25,000/-||20- 60 years||20- 60 years||70 years||Same as policy|
|Sahara Ankur Child Plan||Rs. 30,000/- (single premium plan)||0 - 13 years||0 - 13 years||40 years||5 times the sum of single premium paid|
|SBI Life Smart Champ Insurance Plan||Rs. 6,000/-||21- 50 years||21- 50 years||70 years||Rs. 1,00,000/-|
|SBI Life - Smart Scholar Plan||Rs. 24,000/-||18- 57 years||18- 57 years||65 years||1.25 times the single premium (lump sum payment) and 20/7 times the yearly premium (regular pay)|
|Shriram Life New Shri Vidya Plan||Not applicable||18- 50 years||18- 50 years||70 years||Rs. 1,00,000/-|
|Smart Future Income Plan||Not applicable||18- 55 years||18- 55 years||80 years||100 times the monthly income as chosen|
|SUD Life Aashirwad Plan||Not applicable||18- 50 years||18- 50 years||70 years||Rs. 4,00,000/-|
|TATA AIA Super Insurance Life Achiever Plan||Rs. 24,000/-||25- 50 years||25- 50 years||70 years||10 times the annual premium|
|Wealthsurance Future Star Insurance Plan||Rs. 25,000/-||18- 54 years||18- 54 years||64 years||The higher side of 10 or 7 times the yearly premium or 0.5/0.25 term yearly premium|
*Paisawiki does not endorse, rate, or recommend any particular insurer or insurance product offered by an insurer.
Listed below are some of the best child plans available in India.
AEGON Life Rising Star Insurance Plan
This plan has been designed to help the insured child to achieve his/her future without the worry of expenses. In this policy, the fund value, which is also inclusive of the top-up fund value, will be given to the beneficiary upon the policy's maturity. In case one chooses not to take the entire sum in one go, then he/she can opt for a settlement.
Aviva Young Scholar Secure Plan
The Aviva Young Scholar secure is an educational plan, specially designed to take care of all the necessary steps taken by the insured child for his/her studies. This plan will ensure that the child is taken care of even if the insuring parent or guardian is not around. In the case of the parent's death, all the promised benefits shall be paid to the child. In this plan, however, it is important to note that all the premiums would need to be paid until that date to avail the benefits.
Bajaj Allianz Young Assure Plan
Designed to help parents plan their child's imperative milestones while he/she is growing up, the Bajaj Young Assure plan safeguards the financial requirements and also provides long term investing. In this plan, the risk cover ceases to exist once the policy has matured. The maturity benefits shall be paid out in two cash installments as per the decision made during inception. The first installment begins from the policy term's completion date. Add-on riders such as accidental death and disability, premium waiver, etc. can be purchased to enhance the scheme further.
Bharti AXA Life Child Advantage Plan
Bharti AXA Life Child Advantage Plan is a non-linked participating life insurance product that promises guaranteed returns. It offers complete protection for the child’s future. The plan has two options to choose the benefits namely, endowment option and money-back option. Apart from this, it also offers tax benefits under section 80C and Section 10 (10D) of the Income Tax Act, 1961.
ABSLI Vision Star Plan
Aditya Birla Sun Life Insurance Vision Star Plan is a non-linked participating life insurance product with a special benefit of waiver of premium in the case of the demise of the policyholder. This plan aids in growth to the savings of the parents. This plan makes sure that you receive regular assured pay-outs to provide finance to the education of your child, protecting your kid’s future even when you are not around. This plan offers comprehensive financial protection to your child’s future.
Canara HSBC Smart Junior Plan
Smart Junior Plan by Canara HSBC Oriental Bank of Commerce Life Insurance is an individual non-linked par protection cum life insurance savings plan. This plan is designed to take care of the future education needs of your child, even in your absence. This plan offers guaranteed pay-outs during the policy term of 5 years.
Edelweiss Tokio Life EduSave Plan
This plan is a child insurance plan with the benefits of an endowment plan to cater to the need of your kid’s marriage and education planning. The plan offers a waiver of premium option and the sum assured is paid immediately.
*This plan has been withdrawn.
Exide Life Mera Ashirvad Plan
This plan is a non-participating traditional child plan that protects the future of your child even if you’re not around. Exide Life Mera Ashirvad Plan creates a guaranteed corpus. It is a plan with limited premium payment term.
Future Generali Assured Education Plan
In the case of the policyholder's untimely passing due to unfortunate circumstances, this plan will take care of the beneficiary to ensure that he/she won't suffer in their life. Investing in this plan also makes for a systematic saving of premium payer's money so that the kid can have a bright and fulfilling future. In this plan, 100% of the sum assured will be paid out as decided at the commencement time. In the case of policyholder's death, the death sum assured will be payable to the child. Additionally, on every subsequent death anniversary, the insurance company pays 5% of the premium.
HDFC Life Young Star Udaan Plan
HDFC Life Young Star facilitates your young ones to reach unordered heights of success and fulfilling life. Monetarily, this plan has the children covered on all the different milestones of their lives. There are essentially two maturity benefits associated with this plan. Endowment plans offer a lump sum amount at the maturity of the policy. In contrast, the money-back schemed plans give alternate payments over a recent 5 years before the plan reaches maturity.
ICICI Prudential Smart Kid Solution Plan
This plan will ensure that a parent gives his/her kid an uncompromising career and a bright future, despite the growing expenses in the field of education. The tax benefits on this plan are subject to premiums paid and other laws in India, which as amended from time to time. The maturity benefit gives a fund value along with any top-up fund value if applicable. This is paid to the beneficiary regardless of the policyholder's survival until the final date of maturity. One can choose to take this amount in a structured manner or take it as a lump sum at the policy term's end.
Kotak Head Start Child Assure Plan
The Kotak Head Start Child Assure plan comes riddled with several advantages, providing financial security through triple benefits. In the event of death, the beneficiary will be eligible to receive triple benefits as stated here:
- The basic sum assured shall be paid out immediately without any delay
- The policy will remain active and continue without any hitches until the end of the policy term
- The premium waiver benefit will be shut down at this point, and all the future premiums shall be added to the total fund value
On maturity of the plan, one can choose to take the entire fund value to meet the child's monetary requirements. These proceeds can also be opted to be collected partly in cash payments and partly in balanced installments after choosing the settlement option. These part installments can only be availed for 5 years after maturity.
IndiaFirst Happy India Plan
The plan is a unit-linked endowment plan, which provides insurance cover on your life and aids in growing money via linked instruments. IndiaFirst Happy India Plan makes sure that your family and loved ones get financial support as you planned.
Kotak Headstart Child Assure Plan
Kotak Headstart Child Assure Plan is a ULIP child plan that offers protection and investment in one plan. It offers triple benefits namely, the premium of waiver option, immediate payment of the basic Sum assured, and continuation of policy and the payment of the Fund Value at the maturity of the policy.
Max Life Shiksha Plus Super Plan
Max Life Shiksha Plus Super Plan is a non-participating, unit-linked individual life insurance policy where the investment risk in the portfolio of investment is borne by the policyholder. This plan offers insurance with flexibility in order to make an investment in the equity market with different fund options. Moreover, it offers financial protection to your kid during the times of emergencies, and funds to meet the higher education costs and expenses of your child.
PNB MetLife College Plan
PNB MetLife - Met College Plan is a traditional investment-cum-insurance plan aimed towards meeting the future financial requirements of the education of your child. This plan is a participating plan that depends on the periodic bonuses declared by the policyholder.
Pramerica Life Future Idols Gold Plan
Pramerica Life Future Idols Gold Plan is a traditional child insurance policy where the life insured is the parent but this plan offers benefits to their kid. Under this policy, the policyholder does not have to pay further premiums in case of the demise of the parent or total and permanent disability within the term of the policy. Moreover, the kid will get 50 per cent of the Sum Assured for the immediate expenses.
Reliance Life Child Plan
This child plan assures the policyholder that their kid will remain taken care of financially, even if the former meets an untimely death. To ensure that one's kid's future is not compromised, no matter what the circumstance, this is one of the best child policies to take into consideration. Furthermore, this policy offers guaranteed advantages such as the receipt of both deaths as well as survival benefit. Additionally, a sum assured of 25% shall be paid on the last three anniversaries right before the plan's maturity. This will be paid out regardless of the survival of the life assured.
Sahara Ankur Child Plan
Purchasing this policy will give the parent the satisfaction and relief of having chosen well to secure their precious child's future. Financially, this child plan will safeguard all the beneficiary's needs, leaving both the parents stress-free. In a situation where the group policy comes to an end in the middle of the policy year, the promised coverage will be received until the time of completion of the plan's anniversary.
SBI Smart Scholar Plan
Investing in this child plan will give parents the utmost satisfaction of ensuring a bright future for their children. Not only that, but this policy also provides lucrative market-linked returns on the invested amount. Safeguarding the child's future while making money on the side is a win-win situation. At the time of maturity, the fund value shall be paid out in a one-time lump sum amount.
Shriram Life New Shri Vidya Plan
Facilitating the fulfilment of a child's future aspirations and taking a load of the parents' stress levels by financially safeguarding their children, the Shriram Life New Shri Vidya plan is one of the best child plans to invest in. A child's education is important, and this is an apt policy to take for helping that aspect in his/her life. This plan has a great survival benefit, which ensures that if the policyholder survives until the end of the policy tenure, for every year of the recent most four years of the policy, 25% of the basic sum assured shall be payable for every year of those four years as stated. It is important to note that this is applicable, given the arrangement is in power.
SUD Life Aashirwad Plan
SUD Life Aashirwad Plan is a non-participating, non-linked endowment plan that makes sure the child soars as higher without making any compromises, even when you are not around. This plan offers flexibility to opt from 5 maturities pay-out option along with guaranteed benefits at maturity.
TATA AIG Life Insurance Fortune Maxima
This plan protects the dreams every parent has for his/her child by ensuring the child achieves everything he/she needs at important milestones of his/her life. The fortune maxima policy is an insurance plan that aids in accomplishing long-term goals and the security of a bright future. In this plan, a maturity benefit is applicable, which means that one can claim the entire fund value at the maturity of the policy term. This value will be the sum of regular premium payments, top-up payments, or the single premium fund value, whichever is applicable upon the maturity of the NAVs. To better understand this, ensure that thorough research is done and the fine print is read properly before making a payment.
Child Plans with Lowest Premiums
Almost all the child plans in India have been designed, keeping in mind the safeguarding of children. After all, children are India's future, and their achievements will only reflect well on the country. However, it can be difficult for many parents to be able to make premium payment installments or even gather up a one-time payment for single-premium plans. Many child plans have low premiums compared to others, so the investing parent or guardian will choose to pick from. Some of the lowest premium child policies are listed below:
|Name of Child Plan||Minimum Yearly Premium|
|AEGON Life Rising Star Insurance Plan||Rs. 20,000/-|
|Edelweiss Tokio Life Edu Save Plan||Rs. 6,968/-|
|Future Generali Assured Education Plan||Rs. 20,000/-|
|HDFC SL Young Star Super Premium Plan||Rs. 15,000/|
|India First Happy India Plan||Rs. 12,000/-|
|Kotak Head Start Child Assure Plan||Rs. 20,000/- (Regular pay plan)|
|Metlife College Plan||Rs. 18,000/-|
|Pramerica Future Idols Gold||Rs. 10,800/-|
|SBI Life Smart Scholar Plan||Rs. 24,000/-|
|SBI Life Smart Champ Insurance Plan||Rs. 6,000/-|
*PaisaWiki does not endorse, rate, or recommend any particular insurer or insurance product offered by an insurer.
Exclusions of Child Plans
Despite the plethora of benefits, one gets when they invest in a child plan; there are some instances when these advantages are not carried out as expected. Often, insuring companies are strict about a few factors that can hamper the coverage for the children and end in a cancellation of the policy in some cases as well. It is important to make a note of such circumstances that will most definitely halt the plans and eventually not entitle the beneficiary to the promised coverage. Mentioned below are the exclusions of the best child plans;
Death due to Intoxication
Many child plans offer a premium waiver rider, enabling the nominee or beneficiary to receive a lump sum payment and waiving off the subsequent premiums until the end of the policy case the insuring parent/guardian passes away. However, in case the policyholder has met his/her end due to a drug overdose, alcohol poisoning, or any other intoxicating agent. The child in question shall not be entitled to gain any benefits of the plan.
Death due to Extreme Sports
Similar to the rule that follows the intoxication mishap, in case the insuring parent or guardian tragically meets his/her death at the time of participating in adventurous or risky sports, his/her child will not receive any benefits of the plan. In case the parent survives the accident and later passes away at the hospital, this rule still stands as a cause of death should not be due to such activities.
Death due to Suicide
It is anyway very irresponsible to self-harm and ends one’s life out of choice, especially when there is a dependent child in the equation. Insuring companies in no way encourage this behaviour. Therefore in case the policyholder commits suicide, the beneficiary child shall not be privy to any benefits of the said policy and, in many cases, might even be lapsed.
Death due to Illegal Activities
Participation in criminal activities of any sort, which results in the untimely demise of the policyholder, will not be entertained by insuring companies. Any illegal acts that even include the act of war shall be strictly discouraged, and no advantage shall be released to the surviving nominee.
Tax Benefits of Child Plans
With child plans offered in India, policyholders can choose to make investments as allowed by their risk appetite. Younger parents in their thirties can have a larger exposure to equity markets where the returns tend to be higher as compared to debt funds. Those who do not wish to take risks should only invest in debt funds. However, the plus side of investing in some of India's best child plans are the tax benefits. Such policies designed to safeguard children's future fall into the highest tax-saving bracket as allowed by the Indian law. A few ways one can calculate their tax savings can be deciphered from the below-mentioned points:
Tax Saving Perks on Income from Child Plans
Any income earned from child plans is tax-free under section 10 (10D) of India's income tax act. *Tax benefit is subject to changes in tax laws.
Tax Saving Perks on Premiums of Child Plans
Premiums paid under any child plan are eligible for exemption from tax under section 80C of India's income tax. One can claim a deduction for their taxable income for this. *Tax benefit is subject to changes in tax laws.
Tax Savings on Treatments for Children
Parents of children who have special needs can claim a tax deduction from their yearly income. *Standard terms and conditions apply. These claims can be made as stated below:
- 33% deduction can be claimed for money spent on a child's treatment under section 80 DDB of the income tax act. *Tax benefit is subject to changes in tax laws
- 40% deduction can be claimed for expenses caused for minor and major disabilities treatments under section 80 DDD. *Tax benefit is subject to changes in tax laws
Tax Saving on Further Studies Loans
Tax deduction on interest amount that needs to be paid on loans availed for children's' higher studies can be claimed under 80E under India's income tax act. *Tax benefit is subject to changes in tax laws.
Tax Saving on Tuition Fees
An annual reduction of up to Rs. 1 lakh can be claimed as a tax deduction for tuition fees for children under section 80C of the Income Tax Act. This is only available for a maximum of two children per family. *Tax benefit is subject to changes in tax laws.
Steps to Buy the Best Policy for Child Online
Purchasing a child plan online is a simple task. Before the purchase, though, one should ensure that they are investing in the right plan. This should be taken into consideration as per the maturity sum receivable at a specific time, risk appetite, the sum insured, and many other factors. Once the plan has been finalized, buying it online can be done swiftly and easily with just a few clicks. To be able to purchase a child plan online, the following mentioned steps should be adhered to;
Step 1: Log on to the official website of PaisaWiki and register by filling in all the necessary details.
Step 2: Go on to the child plans tab from the home page.
Step 3: Skim through all the child plans and pick the right one by comparing different plans and their quotes.
Step 4: Once you click on the plan, there will be an option to 'buy a plan' similar, which should be clicked on.
Step 5: The next page will open up a form, and the necessary details will need to be filled, such as name, age, sex, address, etc.
Step 6: Once the form is filled, attach the required documents along with it.
Step 7: Submit the form, and the policy will become active in approximately 30-45 days based on verification from the company.
The documents that will be required for buying child plans are:
- Age proof - birth certificate, 10th/12th standard mark sheet, passport
- Identification proof - Passport, Aadhar card, PAN card, Voter’s ID
- Address proof - Electricity bills, landline telephone bills, passport, driver's license, etc.
- Income Proof - Proof of income of the policy buyer
- Proposal form - Duly signed and filled form as displayed on the website
How to Compare Child Plans?
Buying the right child policy can be a challenging task. With the number of options available, it is only human to be slightly confused at the beginning. However, the official website of PaisaWiki (*Paisawiki does not endorse, rate, or recommend any particular insurer or insurance product offered by an insurer) has a detailed description of every child plan offered by various insuring companies. To make things simpler, they have published tables mentioning the name of plans, their features, advantages, disadvantages, premium installment options, and various other factors one will need to look into when investing in a good scheme. It becomes a fairly simple task to skim through these details to be able to make an informed decision.
Comparing various child policies online is made easy on the company's website already, and to make things more convenient, they also have a mobile application one can download. However, for those who want an even more detailed description or have questions about the same, the company contact details such as the helpline numbers and customer care email address are also published. The interested party can contact an executive and get all the relevant details he/she needs before investing. Not only this, but the website also ensures that it displays active policies only, so one does not get confused. At this point, though, it is important to note that the company only makes suggestions based on the aspiring investor's requirements. The final decision solely lies with the buyer.
Child Plans - FAQs
Ans. To choose your family's ideal child plan, various stages of your child's milestones will need to be considered. The paying capability, such as the ability to pay premiums on time for the stipulated policy term, external factors such as market inflation, interest rate fluctuations, will need to be taken into heed. Premium waiver benefit is one of the most crucial factors to consider when purchasing a child plan, which will ensure that your child gets a lump sum amount in case you die due to unforeseen circumstances.
Ans. Yes. All the insuring companies have branches in various areas of the city you reside in. The process would be fairly similar in which you would be needed to fill the form physically as well as submit all the documents as hard copies. The payment can be made by credit cards and debit cards as well as cheque payments to the branch in person. Many independent insurance agents can help you with the same.
Ans. Most definitely, yes! One wouldn't want their child to remain behind, especially when it comes to their education. Getting into good educational institutes, taking extra tuition, and achieving their dreams is a primary concern for parents. Financial restraints should not be the downfall of your child. With some spectacular benefits, investing in a good child policy is a necessity.
Ans. If the child is aged between 0-15 years, it is the apt range to buy a scheme for him/her. This also aids in creating a financial corpus to fund the child's education by beating inflation through regular investments.
Ans. Investing in child plans offer the highest tax exemption as allowed by Indian law. All the child policies are available in the country in the E-E-E category. Furthermore, you can save on your income, premium payments, medical treatments as well as for loans on further studies. A detailed description of tax-saving benefits has been mentioned in this article. (*tax benefit is subject to changes in tax laws.
Ans. Yes. You can withdraw money from the child plan whenever you need after the initial lock-in period of 5 years is over. After that, until the end of the policy term, you can withdraw as and when you please. (*Standard terms and conditions apply)
Ans. It is never too early to start planning the future of your children, so why wait? The best time to start designing their future should be as early as from the time they are born. Before purchasing though, you should consider some important factors such as:
Financial Contingencies - Despite saving, market inflation may add to the premium costs. Knowledge of this is important and should be thoroughly researched before making a decision, so nothing hampers the plan.
Type of the Policy - Child plans come in categories of unit-linked plans (ULIP) and traditional plans. If you have the risk appetite to handle market risks, then invest in the former. Otherwise, you really can't go very wrong with a traditional policy.
Advantages - Compare the different benefits of each plan before you make an informed decision. It is necessary to know what your priorities are for your children and accordingly make the purchase. Many plans allow add-on riders so you can enhance an already lucrative child policy.
Ans. A nominee is a trusted person who is appointed by the policy buyer to take responsibility for all the assets, financial records, and other such factors in case of his/her death. This person has to take the responsibility of ensuring that the legal heir receives the profits and earnings. On the other hand, the beneficiary is someone who has a financial interest in the life of the policyholder. The beneficiary is usually a relative or even the bank in some cases. Often, nominees and beneficiaries are the same people.
A9. The best way to decide which education scheme suits your needs the most is to consider some key factors beforehand. A good child education plan should include the premium waiver benefit without a doubt as it is one of the most important aspects that safeguards your child in case you meet your end unexpectedly. Other factors to consider are ULIPs, monthly saving amounts, number of children to be insured, inflation rates, adequate coverage, government policies, tax-saving benefits, market conditions, etc.
A10. Your health plan can include your child as well as your spouse. All that is needed for you to do is pay an extra premium for any additional family member, and they will also benefit from the health coverage you are enjoying.
Ans. A minor can be appointed as a nominee on a child plan, but you will also need to nominate an appointee that will have to give his or her consent to act upon it until the minor is of sound age. Once the minor becomes an adult, the appointee will then cease to hold control over the actions to be taken or benefits to be reaped from the policy in question. In case there is a claim to be made, and the nominee is a minor, the proceedings will then go on to the legal heirs. (This will only be the case if an appointee is not nominated)
Ans. Typically, the policyholder decided the frequency of the payouts at the time of inception of the policy. The payments are made as per this. However, this is not set in stone, and during the term of the policy, this frequency can be altered as per the wishes of the policyholder.
Ans. Yes. All the money received from child plans, be it maturity benefit or death benefits, will all be completely tax-free under the Indian law. (*tax benefit is subject to changes in tax laws)
Ans. There are a few child health plans available in India that solely covers the insured child's health in question. In such plans, no adults, be it parents or guardians will be covered. In such a case, it is important to note that the policyholder's age should be no less than 18 years complete.
Q15. Other than providing monetary relief for parents regarding their child's future needs, are there any other benefits for the parents?
Ans. Some of the best child plans offer a range of benefits for the children and the policyholders. Apart from securing the child, which is a huge benefit, other advantages include;
- A profitable blend of investment and savings in one plan
- Encourages long term disciplined saving and creating a wealth corpus
- Benefits to the child even after your death
Ans. As it turns out, extremely! As the name suggests, the beneficiary is liable to get all the benefits of the plan even after the policyholder passes away. In case this unholy instance occurs, the beneficiary received all the money of the plan along with added benefits of premium being paid by the insuring company, which was to be done by the parent when alive. One must know the pros of having a beneficiary and appoint one when buying a child plan to ensure that their hard-earned money does not go to waste.
Ans. The amount is usually deciphered based on factors such as policy term, the sum assured, investor's age, child's age, etc. There are several child plans available in India that have very low annual premium amounts. Furthermore, there are traditional policies which have the least amount of risk involved. These child plans are ideal for parents looking to secure their children with limited budgets and lower risk appetites.
Ans. This is one of the most important features of child plans. Most of them have it, but in case the one you choose does not, you should ensure that you purchase it as an add-on rider benefit. This premium waiver advantage is extremely beneficial as it offers a lump sum payment to the child in case the insured parent or guardian passes away due to some reason. Not only that, but it also waives off the balance premiums to be paid, and the insuring company pays the balance premiums until the end of the policy term. This ensures that the child does not suffer further trauma in already testing times, and his/her future is financially secured.
Ans. Various add-on rider benefits can be purchased along with various child plans. As the name suggests, this is an 'additional' cover that you can buy during the inception of the policy, which further enhances the policy's coverage. Riders such as accidental death, accidental disability, premium waiver benefit, and many more are a few examples of add-on riders. Often, they are meant to be purchased during the commencement of the policy, but in many plans, these add-on riders can be bought even during the middle of the policy term, provided it is active. *Standard terms and conditions apply
Ans. Fairly easy to understand, as the name suggests, a single premium child plan is a policy that you can buy by paying a one-time single premium payment. In this type of plan, insuring parents or guardians who have enough money to make a large payment in one go can get their child insurance stress-free. No premium installments are expected to be made, and you will not need to worry about missing the due date or worrying about inflation costs that might affect these payments. It is a great option for investing in a child plan for those who want to secure their child's future without worrying about making timely payments for the policy term's entire tenure.
Ans. When purchasing a child plan online, you will need basic identification and KYC (know your customer) documents, which you will need to attach along with the form before making a payment. In case your KYC, as well as the child's KYC is not done, you will not be able to purchase a policy. This has been made mandatory by the government of India. The documents you will need are;
- Address Proof - Landline bills, electricity bills, passport, etc.
- Identification documents - Passport, Aadhar card, driver's license, voter's ID. Etc.
- KYC (know your customer) documents - Aadhar card, PAN card, voter’s ID
- Age proof - Birth certificate, passport, etc.
- Duly filled and attested policy form
Q22. If I need to make a thorough decision regarding which policy to buy, what is a good website for accurate information?
Ans. There are several variants of child plans made available by all the reputed insuring companies, all fully loaded with spectacular advantages and benefits for children. Every parent would want to secure their kid, and it can be quite confusing when going through so many plans. Paisawiki takes pride in shelling out the right information and helping parents make the right choice for their children. After all, they are the future of the country. You can see various articles about the policies on the website - all listed out in easy formats in tables and listicles. You can go through the website and make an informed decision with the information you get on the website. For some reason, if you are still unsure, you can contact the customer care helpline email address or phone numbers, and an executive will further guide you with anything you need. (*Paisawiki does not endorse, rate, or recommend any particular insurer or insurance product offered by an insurer.)
Ans. A child insurance plan must be bought from an insurance provider with a high settlement ratio compared to others. This will facilitate a quick and smooth claim settlement process. The generic process is simple and is as follows:
- Notify the insurance provider at your earliest in case a mishap occurs for which you will need to make a claim. You can call, send an email or physically visit the nearest branch to do this
- Fill the claim form and submit it along with details of the accident, death, etc.
- Include the nominee details along with the claim form before submission
- Once the claim is registered, necessary documents shall need to be submitted to the insurance provider as asked
- The insuring provider will then verify if the claim is legitimate by appointing a surveyor to come and do a check
- Once approved, the provider will transfer the claim benefit into the nominee's/beneficiary's account within approximately one month of furnishing the documents
Ans. A duly filled form will need to be submitted along with relevant documents when making a claim process. A few of them might differ depending on what the insurance provider asks for, but generally, the following stated documents will need to be submitted:
- Duly signed and filled claim form (usually comes along with the original policy papers)
- Medical certificates and doctor’s certificates
- Original policy document
- Doctor’s prescriptions
- Diagnostic reports
- Death certificate in case of demise
- Post-mortem report (this only needs to be submitted in case of unnatural death)
- Copy of FIR (this only needs to be submitted in case of unnatural death)
- Bank details for facilitating a smooth NEFT bank transfer
- KYC (know your customer) documents of the nominee
- KYC (know your customer) documents of the policyholder
Ans. A very important question, the cost of bringing up a kid is increasing by leaps and bounds in today's fast-paced world. If a child is given good financial aid to fulfil their future dreams, they can, in turn, bring in a lot of money with getting a good education and lucrative jobs thereon. Just to get a brief idea about how much a child's education would cost, the following table states a hypothetical prediction.
Education cost in India 2020 (Graduation program)
Estimated education cost in India 2040
Amount of Investment
Rs. 15 Lakh
Rs. 45 Lakh
Rs. 1000 per month for the next five years
Ans. This is a great investment as it provides the policy buyer with the dual benefit of investment as well as savings. This policy helps you save over time and give you a lump sum amount at the end of the policy tenure. This policy will act as a financial backing for ensuring that your child's educational, medical, and other talents will be well taken care of in the monetary aspect.
Ans. A regular premium plan is one of the most popular plans people buy. In this, as opposed to single premium payment, premium payments are payable at regular intervals, as stipulated during the policy's inception. These intervals are paid out in annual, bi-annual, quarterly, and monthly installments. This type of child plan is perfect for salaried parents where a monthly income comes in every month and part of it can be put towards the policy. The only thing that can be a little taxing is that you have to keep a schedule of the payments and make them on time as scheduled. Missing a payment can cause the policy to lapse in certain cases.
Ans. Child insurance plans can start with a minimum installment of as little as Rs. 500 and after that, multiples of Rs. 100 is to be paid.
Q29. In case I miss a premium payment due date by paying manually every month, can I opt for a direct debit mode of payment?
Ans. Yes. To avoid late payment charges and, in some cases, the lapse in a policy, you can opt to link your bank account to the policy. This will ensure that you do not miss timely payments, and on the set date of every month, the stipulated amount will automatically get debited from your account and be paid towards the child investment plan.