Child Plans

A child insurance plan is a savings cum investment cum security plan to meet the child’s future financial needs. Parents or legal guardians can take the policy as a policy holder and the child becomes the Nominee. In case of the death of the parent during the term of the policy, the Sum assured is payable immediately and the policy will continue till end of the term.

Why is Child plan necessary?
Every Parent wants to give the child the best possible care when he/she is an infant and wish to send them to the best schools and colleges for their bright future. The resources to meet these future expenses are usually not available with majority parents as they overlook financial planning and succumb to inflation. One has to plan when the child is very young, to ensure the desired education in reputed schools or colleges. Child plan is the right solution in this context.

The child will receive money at specified intervals as per the original terms of the policy.

Secures the future of the child.

There is no burden of paying the Premiums in the case of the death of the parent during the term of the policy, as all the future Premiums will be waived.

Creates a corpus for the child’s future needs as a start in life.

Sum assured is paid immediately on death of the parent, during the term of the policy.

Key Features
All future payable payments get waived.

These plans are available in market linked and traditional plans.

The Premiums under this plan can paid in a single one-time payment or regular payments which are monthly, quarterly, half yearly or yearly in nature.

Parents who have school going children below the age of 5 years can take the child plan, as it helps them build a corpus as and when the child would require it.

Types of Child Insurance Plans

Child ULIP
These are high insurance covers with systematic investment and participation in the equity market to beat inflation in which the child gets a triple benefit. Triple benefit means the Sum assured is given to the Nominee child on death of the assured parent and all future Premiums are waived off and the maturity value would be paid at the time of maturity.

Traditional Endowment Plans
They provide guaranteed returns in the form of bonuses on the Sum assured. In these type of plans the parent chooses a term depending upon the age of the child.

Riders are available in three basic categories - Premium waiver, critical illness, and accidental death and disability. Some companies offer Premium waiver benefit as in built, hence it is advised to check before one opts for the Premium waiver benefit. The critical illness rider provides coverage for a set of predefined critical illnesses, while accidental death and disability Riders pay an additional Sum assured in case of unfortunate accidents that cause disability or death of the insured.

Tax benefits
This policy not only offers protection but also offers Tax benefits under sec 80C, for the Premiums paid.

The maturity claim benefit and Death Benefit paid in case of death of the policy holder is exempted under sec 10(10D) of Income tax act 1961