15 Year Child Education Insurance Plan

Child life insurance policies are used to build a fund to cover your child's future financial obligations. These plans provide financial security to children in the event of the untimely death of the life-assured parent. Child life insurance plans can be used to help support your child's higher education, job advancement, or even the start-up of their own dream business.

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  • Insurer pays premium in case of loss of life of parent

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  • 12+ plans available

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They can even be used to help fund your child's marital expenditures. These plans can assist a parent in ensuring their child's financial security in an unanticipated occurrence. 

What is a Child Insurance Plan?

A child insurance plan combines insurance and investment to safeguard your child's future security. At the end of the policy term, life insurance might be paid out as a lump sum amount. 

Not only that, but these plans also offer flexible rewards at key junctures in your child's schooling. While it may be difficult to predict tragic mishappenings such as death or significant medical disease, it is critical to protect your child's future from such occurrences. 

Even if the parents are absent, the child insurance plans ensure that your child's future financial requirements are met. If you require quick funding for your child's necessities, the policy can be used as collateral for a loan.

Features of Child Education Plan

There are many known benefits of a child education plan. Some of them are listed below:

  • Lump-sum benefit- If you die during the policy term, your children will get a lump-sum benefit from the plan.

  • Waiver of Premium- Your child will not be responsible for paying premiums because the corporation will do it on your behalf. As a result, the policy remains in place.

  • Partial Withdrawal- You can withdraw a portion of your funds at any time throughout the term, subject to certain limitations. This covers your child's many educational milestones.

  • Tax Advantages: Loyalty Addition and Wealth Booster- These policies provide tax benefits to policyholders. These programs may also include features like Loyalty Addition and Wealth Booster, which can help you expand your money without having to invest additional funds.

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Types of Child Education Plans

Mentioned below are the different types of child education plans that are in force these days. 

  1. Child Endowment Plan

    You can invest in multiple loan products based on the insurance provider's selections with a child endowment plan. While the profits on these investments aren't large, you can rest assured that your money is safe due to the low risk.

  2. Single Premium Child Plan

    With this plan, a policyholder pays a single premium for the length of the policy and is relieved of any worries about remembering due dates.

  3. Regular Premium Insurance Plan

    Unlike a single premium child insurance plan, a regular premium insurance plan allows you to pay your premiums in installments. According to your capability, you can pay the premium monthly, quarterly, half-yearly, or annual.

  4. Unit Linked Investment Plan (ULIP)

    ULIP allows you to split your money between equities and debt investments. This is the best long-term investment option, with a period of 10 to 15 years. At the end of the policy period, these child education plans pay out a reasonable payment. While the maturity proceeds of these plans can be utilized for any purpose, the primary intention is to provide funds for the child for whom the plan is purchased to attend higher school. 

    Similar to other Unit Linked Insurance Plans, child ULIPs invest in both equity and debt instruments (ULIPs). The main distinction between a child education plan ULIP and other ULIPs is the length of coverage. 

    While ordinary ULIPs have policy terms ranging from 10 to 25 years, a Kid Education Plan ULIP pays out when the child reaches the age of 18. 

Why Should You Buy a Child Education Plan?

A child education plan not only does protect your children but also offers many advantages. Some of them are mentioned below:

  • Guaranteed Benefit: Unlike other forms of investments, a child insurance plan provides a guaranteed child education plan. Many child education programs have a premium exemption advantage as a built-in incentive.
    This benefit promises to pay a maturity benefit regardless of whether the parent is alive or not when the child reaches maturity. As a result, you can protect your child's future by purchasing a kid life insurance policy.

  • Dual Benefit: A dual benefit plan is the greatest type of child education insurance which can also be called an investment-cum-insurance plan. The first portion focuses on building a financial foundation, which is especially important for children.
    The second part provides peace of mind by providing a Child Insurance Plan for their children to protect their future.

How Does a Child Education Plan work?

When you purchase a child plan, you pay premiums for the plan's duration. This period is known as your policy term upon whose completion, the insurer pays you a lump sum payment in the form of a maturity benefit. You can use the money for your child's education or marriage expenditures. 

If anything occurs to you during the policy term, your plan's entire life cover value is given to your nominee, who will be responsible for the future care of your child. To ensure that your children's future is always safe, the insurance provider waives any future premium payments for the remainder of the policy term.

Benefits of Child Education Plans

Some of the benefits of investing in child insurance plans are listed below.

  • Financial Protection- A child education plan functions as a financial safety net because it provides a lump sum payment to the nominee in the case of your untimely death.

  • Tax Benefits- Under Section 80C of the Income Tax Act of 1961, a Child Education Plan is not tax-deductible. You can claim a tax deduction of up to Rs 1.5 lakh for the premium you paid.

  • Investment Component- A life insurance policy includes investment components. Furthermore, a Unit Linked Investment Plan Child Education Plan allows you to take advantage of the financial markets' high-return potential.

  • Partial Withdrawal- If you have a Unit Linked Investment Plan Child Education Plan, you can withdraw a portion of your funds to support your kid's immediate needs. After the lock-in period has ended, you are entitled to cash out some of your units to cover unforeseen medical expenditures, school tuition, and other expenses.

Tax Benefits

Insurance purchasers repeatedly look for ways to save money on taxes in addition to the death and yearly income benefit. It's worth noting that child plans also have tax advantages, similar to any other insurance plan. 

Under Sections 80C, 10D, and 80D of the 1961 Income Tax Act, policyholders can deduct their taxable income from such plans. Under Section 10D, all proceeds from a child plan are tax-free, including the maturity benefit, death benefit, and income benefit.

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Difference Between an Education Loan and a Child Education Plan

Parameters Child Education Plan Child Education Loan
One Time Use Helps in future perspective for the child in addition to the education part of the child Money can be used only for educational purposes.
Burden on the Child Many benefits of a saving cum investment plan. Money can be used when the family needs it the most. Condition of repayment attached to the education loan
Withdrawal In the case of an emergency, you can withdraw a partial amount. No such thing is there in a Child Education Loan.

FAQ's

  • If a minor is insured under the plan, does he or she become the policyholder?

    Yes, when a child reaches the age of 18, he becomes the owner of the policy. It is known as vesting.
  • What do you mean by Child Life Coverage?

    A Child Life Coverage is a lump-sum payment made to the nominee in the event of the policyholder's death during the policy term.
  • Is it possible to get a child plan for a ten-year-old?

    Yes, the parents of a ten-year-old can purchase a child plan. The money can be used for the child's costs and future needs at the end of the policy term. In any misfortune, the child will also receive the entire sum guaranteed.
  • What happens to the child education plan's future premiums if the policyholder dies?

    The waiver of premium benefit is one of the many advantages of child education plans. If the plan's policyholder dies, this benefit assures that the insurer pays all future premiums on the policyholder's behalf. This will allow the policy to continue even if anything bad happens. It ensures that the child's education continues regardless of the circumstances.

*All savings are provided by the insurer as per the IRDAI approved insurance plan.
*Tax benefit is subject to changes in tax laws. Standard T&C Apply
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
#The lumpsum benefit is calculated if policyholder invested ₹10000 monthly for 10 years in the fund with a policy term of 20 years. This Point To Point past performance data of last 10 years has been used to illustrate a scenario for the customers benefit. It is assumed that the past 10 years returns would have also been delivered in last 20 years. This is not guaranteed and not in anyway indicative of what the customer may actually get 20 years from now. The investment is subject to market risk and the risk is borne by the policyholder.
+Returns Since Inception of LIC Growth Fund
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.

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