Child Care Plan

A comprehensive child care plan should be a combination of both investments and insurance. The former allows parents to save and grow funds for their kids’ future. If you add an insurance component to it, you can ensure that the child is protected even in times of adversity. While there are no insurance schemes by the name of Child Care Plan, there are several fund options that serve similar needs. If you couple these funds with a term insurance plan or a child ULIP, you can ensure well-rounded financial protection for your kid.

Best Child Saving Plans

Insurer pays your premiums in your absence
Invest ₹10k/month and your child gets ₹1 Cr tax free*
Save upto ₹46,800 in tax under Section 80(C)

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

Nothing Is More Important Than Securing Your Child's Future

Invest ₹10k/month your child will get ₹1 Cr Tax Free*

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Types Of Child Care Plans
Child Care Funds
Child Care Funds To Explore
ULIP Based Child Care Plans
Best Child ULIPs

Types Of Child Care Plans

Let’s look at the different options to give you an idea of the best possible ways to secure your child’s future.

Child Care Funds

These investment instruments park your money in the equity market. You earn generous returns on your investments if the market performs well. Some important pointers to note about these child care plans are:

The risk of investment in these funds is high and borne entirely by the investor.
You should invest for a longer term, possibly more than 5 years to earn the best returns.
The returns can be used towards a child’s education or their marriage.
Most of these funds come with a lock-in period, during which the investor or the child cannot withdraw any money. This period allows capital appreciation and your money to grow.
You can choose to invest a lump sum amount or a monthly sum through a SIP (systematic investment plan).
SIPs are easier on the pocket and balance out the risk to an extent.

Child Care Funds To Explore

The following table lists examples of child care funds that allow parents to grow their savings for their children’s future.

Name of Fund	Description
SBI Magnum Children’s Benefit Fund Growth	This child care fund invests in debt and equity markets. A minimum investment of Rs. 5000 is required. It is a moderately high-risk investment fund.
ICICI Prudential Child Care Fund (Gift Plan)	The objective of this child care plan is to offer long-term monetary benefits to the child through equity investment. The minimum purchase price is Rs. 5000 and a minimum additional investment of Rs. 1000 is required.
HDFC Children's Gift Fund	The lock-in period is 5 years or till the child attains 18 years of age, whichever comes early. 65-80% of the money is invested in equity and the remaining in debt funds.

Disclaimer: Policybazaar does not rate, endorse or recommend any specific insurance provider or insurance product offered by any insurer.

ULIP Based Child Care Plans

Child plans such as ULIPs (unit-linked insurance plans) have the additional advantage of insurance protection. The combined benefit of market-linked returns and insurance make these plans ideal for children. Key benefits of such child care plans are:

Future premiums are waived off on the death of the parent.
A part of the premium is invested in market linked funds such as equity and debt.
On the parent’s demise, the child receives the death benefit amount.
The investment risk is borne by the parent.
Some insurers may provide loyalty benefits to existing customers.
Investors have flexibility in choosing funds and investment strategies.
Investors can enjoy tax benefits under the existing tax laws in the country.

Best Child ULIPs

Name of Fund	Description
SBI Life Smart Scholar	It offers liquidity benefits from the 6th year. This child care plan comes with 9 fund options Premium waiver benefit is applicable on the death of a parent along with the death benefit.
HDFC SL YoungStar Super Premium	It comes with 4 fund options and you can switch between them anytime. Future premiums are waived off and the child is paid the death benefit amount on the demise of a parent.
Max Life Shiksha Plus Super	It funds future premiums due if the parent dies. It offers an income benefit to finance your child’s key milestones.