These are child plans that offer combined benefits of a life cover, waiver of premiums, and monthly income to the child. Ideal options for parents to explore would be child ULIPs. The insurance space in India features a number of these plans that offer all three benefits in case of adversities.Read more
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*
It is an insurance plan for children that offers 3 primary benefits for comprehensive protection. The triple benefit includes life cover for the parent, waiver of premiums on the death of a parent, and monthly income for the child. All the benefits can be found in a select few Child ULIPs such as the Bajaj Allianz Life Future Gain, Max Life Online Savings Plan, Bajaj Allianz Life Smart Wealth Goal (Child Wealth Variant), among others.
Child ULIPs have caught the attention of people because these offer market-linked returns, which are generally higher than FD or PPF. However, these plans should be opted for only if you have a high-risk appetite. The returns are completely dependent on the market performance of the funds and the entire risk of investment is borne by you.
The best child investment plans come with 3 important benefits that take care of the needs of young children after the death of their parent. These are -
If the parent of the child dies within the policy term, the family receives the death benefit amount in a lump sum payout. The entire sum can be assigned to an adult who will be in charge of taking care of the childrsquo;s needs, his/her education, or marriage, etc.
On the death of the parent, all the due premiums are paid off by the insurer. This ensures that the plan keeps accumulating returns from the market-linked funds till the end of the policy term. The burden to pay premiums is essentially taken over by the insurer. The child is paid the fund value on the date of maturity to be used per their needs.
The child receives a monthly income starting from the date of death of the parent till the end of the policy term. The amount is usually limited to a percentage of the annual premium or the sum assured. This helps the family meet the regular needs of the child or pay for school fees, etc.
Even if the parent survives the policy term, the child receives the accumulated corpus or the fund value at the end of the policy term. This helps the parent pay for education abroad, or any other expenses that require a large sum. The child is also now equipped with the financial means to pursue whichever field they desire without any restrictions.
These are unit-linked insurance plans for children.
Premium payments can be done on a regular basis, for a limited time, or as a lump sum amount.
The premiums are invested in different types of funds, including equity, debt, or hybrid to balance out the risks.
The policyholder has the flexibility to switch between funds if an existing fund is not performing well.
If the child is a minor at the time of receiving the proceeds, the parent can assign a nominee to hold the funds.
Most plans come with the option to receive the maturity benefit in installments. These can be used towards financing key milestones in a childrsquo;s education.
Bonuses in the form of fund boosters, loyalty additions are added to the fund value which increases the final corpus for the child.
Some plans such as the Bajaj Allianz Life Smart Wealth Goal (Child Wealth Variant) and the Max Life Online Savings Plan offer 100% of the amount invested back to you at the end of the policy term.
Disclaimer: Policybazaar does not rate, endorse or recommend any specific insurance provider or insurance product offered by any insurer.
|Entry Age||1 year||60 years|
|Maturity Age||18 years||85 years|
|Policy Term||10 years||30 years|
|Premium Payment||Single, Limited, Regular|
|Premium Payment Frequency||Yearly, Half-yearly, Quarterly, Monthly|
|Sum Assured||10 times the annual premium|
Note - The above table depicts a broader view of the eligibility conditions. These shall vary across different plans and therefore, each policy should be carefully studied before purchase.
Parents can opt for extra protection against unforeseen circumstances by paying a premium amount.
Accidental Death - Most child plans come with riders against death and disability of the parent arising out of an accident.
Accidental Disability - Disability coverage can be both long-term and short term, thereby compensating for the loss of income.
Critical / Terminal Illness - Many plans offer riders against various critical and terminal illnesses to help the family pay for the expenses as a result of it.
Lock-in Period - Some plans may come with a lock-in period during which no withdrawals shall be applicable. This encourages parents to stay invested longer and earn higher returns on the full investment.
Partial Withdrawal - Parents can withdraw a percentage of the fund value after a certain period to fund urgent liquidity needs for the child.
Surrender Benefit - Policies can mostly be surrendered at any point during the policy term. However, the benefit amount will be dependent on when the policy is being surrendered.
Tax Benefit - Parents can for file income tax exemptions under section 80C of the Income Tax Act.
Note - Tax benefit is subject to changes in tax laws
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