Child Plan

A child plan is a mix of investment and insurance that helps in the financial planning for a kid's future needs. The insurance aspect ensures that a child remains protected in the event of the unfortunate demise of a parent. The investment avenue allows you to create a sufficient corpus to secure your child’s future. More importantly, child plans come with flexible payouts at crucial milestones that can effectively fund a kid’s education at different stages.

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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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What is Child Education Plan?

A child education plan is designed to help children follow their educational pursuits in whichever field they choose. These plans come with a life cover and opportunities to maximize savings on the payment of due premiums. The lump-sum amount at the end of the policy term ensures that neither you nor your kid struggles for capital when it comes to financing higher education. 

There are a number of options for you to look at when it comes to saving for your child’s secure future. The following table compares three different types of savings avenues.

Significance Of Insurance For Children

Insurance for children should not be overlooked given the uncertainty of life. Children are dependent on adults to feed them and finance their educational pursuits, among other needs. On the death of a parent, a child should not be made to struggle for funds to survive and access the basic level of care and education. This is why insurance for children is a must if you are a parent.

Are Child Plans Tax Free?

In addition to the death benefit and the annual income benefit, insurance buyers often look for tax saving avenues. It is noteworthy that child plans come with tax benefits like any other insurance scheme. Policyholders can claim deductions on their taxable income through such policies under Sections 80C, 10(10D), and 80DD of the Income Tax Act, 1961. Note that all the proceeds including death and maturity benefits from a child plan are entirely tax free.

Tax Benefits on Child Insurance Plan

Sections of the Income Tax Act, 1961 Tax Benefits
Section 80C
  • Premiums paid against a child plan are eligible for tax deductions.
  • One can claim deductions up to Rs. 1.5 Lakhs from their taxable income.
  • One can claim reduction of up to Rs. 1 Lakh on their child’s tuition fees.*
Section 10(10D)
  • All the proceeds, including maturity benefit, death benefit, and income benefit from a child plan are completely tax-free.
Section 80DD
  • This applies to parents of children with critical illnesses or special needs.
  • Deductions of up to 33% can be claimed against child treatment related expenses.
  • Deductions up to 40% and 80% can be claimed against expenses related to minor and major disabilities, respectively. 
Section 80E
  • Interest paid towards a loan for a child’s higher education is tax deductible. 

* The tuition fees should not exceed the prescribed limit. Further, exemptions can be availed for two children only.

Best Child Plans in India

Plans Entry Age Maximum Maturity Age Minimum Annual Premium Minimum Sum assured
AEGON Life Rising Star Insurance Plan 18-48 years 65 years Rs 20,000/- 10 times of the regular Annualized premium
Aviva Young Scholar Secure 21-50 years 71 years Rs 50,000/- 10 times the annual premium
Bajaj Allianz Young Assure 18-50 years  60 years N/A 10 times the Annualized premium
Bharti AXA Life Child Advantage Plan 18-55 years 76 years Depends on Minimum Sum Assured Rs 25,000/-
Birla Sun Life Insurance Vision Star Plus 18-55years 75 years N/A Rs 1 Lakh
Edelweiss Tokio Life EduSave 18-45 years 60 years Rs 6,968/- Rs 2.25 Lakh
Exide Life New Creating Life Insurance Plus 18-45 years 60 years 5 Years PPT: 50,000 p.a; 8 Years PPT: 30,000 p.a; 10 Years: 25,000 pa : 5 PPT: 2,05,020 (Monthly) and 1,85,280 (Annual) ; 8 PPT: 1,78,780 (Monthly) and 1,62,380 (Annual) ; 10 PPT: 1,79,590 (Monthly) and 1,63,120 (Annual)
Future Generali Assured Education Plan 21-50 years 67 years Rs 20,000/- N/A
HDFC SL YoungStar Super Premium 18-65 years 75 years Rs 15,000/- 10 times the annualized premium
ICICI Pru SmartKid Solution 20-54 years 64 years Rs 48,000/-  Rs 45,000/-
IndiaFirst Happy India Plan 18-50 years 60 years Rs 12,000/- Higher of 10 or 7 times the annual premium or 0.5/0.25*term*annual premium
Kotak HeadStart Child Assure 18-60 years 70 years Regular pay – Rs 20, 0005 Pay – Rs.50, 00010 Pay – Rs.20, 000 Higher of 10 or 7 times the annual premium or 0.5/0.25*term*annual premium 
Max Life Shiksha Plus Super 21-50 years 65 years Rs 25000/- Rs 2.5 Lakh
PNB MetLife College Plan 20-45 years 69 years Rs 18,000/- Rs 2,12,040
Pramerica Life Future Idols Gold Plan 18-50 years 65 years Rs 10, 800/- Rs 1.5 Lakh
Reliance Life Child Plan 20-60 years 70 years Rs 25,000/- Equal to Policy
Sahara Ankur Child Plan 0-13 years 40 years Single-Premium- Rs. 30,000/- 5 times of Single
Premium Paid
SBI Life- Smart Champ Insurance 21-50 years 70 years Rs 6,000/- Rs 1 Lakh
SBI Life- Smart Scholar 18-57 years 65 Years Rs 24,000/- 20/7 times the annual premium (regular pay) 1.25 times single premium (single pay)
Shriram Life New Shri Vidya 18-50 years 70 years N/A Rs 1 Lakh
Smart Future Income Plan 18-55 years 80 years N/A 100 times the chosen monthly income
SUD Life Aashirvad 18-50 years 70 years N/A Rs 4 lakh
TATA AIA Life Insurance Super Achiever 25-50 years 70 years Rs 24,000/- 10 times of the yearly premium
Wealthsurance Future Star Insurance Plan 18-54 years 64 years Rs 25,000/- Higher of 10/7 times the annual premium or 0.5/0.25*term*annual premium
See More Plans

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

Why Buy Child Insurance Plan?

Secure your child’s future even in your absence
in case of unfortunate death of parent
Life Cover paid to family to meet immediate expenses
Future premiums are paid by the Insurance Company. On maturity, amount is paid to the child
Child gets Monthly income to meet the regular expenses

Compare Best Child Insurance Plans in India

Insurance providers have been shelling out different kinds of child insurance plans, each serving unique needs of a concerned parent. Some of the popular ones are market-linked insurance policies, traditional endowment based policies, plans that offer periodic payouts, plans that come with lump sum payout, among others. 

Given the range of options available pertaining to insurance for children, it is important that you carefully research and shortlist the ones that best suit you and your child’s requirements. The table below lists some of the best child insurance plans in India today.

secure child career goal secure child career goal

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

Key Features and Benefits of a Child Education Plan

The purchase of insurance for children offers a wide range of exciting and unique benefits to the policyholder. It offers a comprehensive maturity benefit along with life cover to financially secure the future of the child. 

Further, a child education plan will help you make sizeable savings for your child without having to run from pillar to post.

Let’s take a look at the benefits offered by the child education plan.

  1. Corpus for Child's Education

    A child plan helps you save enough for the coming times and build a corpus for your child. The money available from a child education plan depends on the terms and conditions of the plan and on the amount one has invested in it by way of premiums.

  2. High Returns Beating Inflation

    All market-linked child plans offer returns above 10-12%. Most government schemes like Sukanya Samridhi Schemes offer much lower returns that do not beat inflation.

    Further, a child education plan such as a ULIP plan enables you to choose the type of fund to invest (money market, hybrid, debt, and equity) in. You’re also given an option to choose from Dynamic Fund Allocation and Systematic Transfer Plan.

  3. A Kitty for Medical Treatment of the Child

    Child plans also allow the option of withdrawing money during the tenure of the child investment plans. Such partial withdrawals come in handy when the child is hospitalized due to an ailment, a minor accident, or a serious medical condition. The best child plan act as an add-on for one's health insurance plan.

  4. Supports the Child in the Absence of Parent(s)

    Insurance companies offer a premium waiver if the parent (i.e., the insured) passes away during the policy term of a child education plan. With the waiver of Premium (WoP) feature, the sum assured will be paid out to the nominated beneficiary, while the due premium for the remaining policy term is paid by the insurance company.

    At the maturity of the policy, the child is entitled to receive the maturity amount as a lump sum payout promised at the time of purchasing the best child plan.

    The premium waiver benefit often comes inbuilt with the best child education plan. 

  5. Income Protection for the Child

    Some child savings plans provide regular income to children, which is equal to 1% of sum assured if parents are not around to pay the premiums.

  6. Acts as Collateral for Loans for Higher Education

    Higher education is expensive, whether one plans to send the child to a private college or university in India or abroad. A Child plan comes in handy if one intends to secure a loan for higher education as these are allowed to be used as collaterals. 

    They can also be used as collateral for other child-related borrowings.

    A child's plan is a great education policy and the best investment plan for the child. The child education plan also instills discipline and helps form the habit of saving to secure the child's future.

  7. Partial Withdrawal to Enhance your Child’s Talent

    If your child possesses a special talent like playing an instrument or acting, then you can encourage your child to pursue it further by making a partial withdrawal from the child education plan. Moreover, some of the plans offer the option of periodic pay-outs that can be used to encourage the child’s talent further.

  8. Tax Benefits

    All child plans fall under the highest bracket of tax exemption i.e. E-E-E category. This is the highest grade of tax benefit accorded by the Indian Tax Laws to schemes like PPF.

  9. Additional Riders

    Certain riders are available, which give you more than just a simple life insurance policy. These riders are available in three sub-categories:

    • Accidental Death and Disability Benefit – The Accidental Death and Disability Rider Benefit pay the extra sum assured in the event of your unfortunate mishap causing death or disability.

    • Critical Illness Rider Benefit – Critical Illness rider benefit offers coverage for a pre-determined set of critical diseases.

  10. Flexibility in Policy Term, Premium Paying Term, and Benefit Payout

    When you realize that your child should get on his/her feet is the best time for the policy to mature. Choose the policy term to meet the exact period. 

    The premium amount is subject to the sum assured and the amount of maturity benefit you opt for. You may opt to pay the premium amount at regular intervals or for a certain period. Most of the life insurance providers offer options such as annually, semi-annually, quarterly, and monthly mode of payment.

    When it comes to the maturity amount payout, you can choose to receive it as a lump-sum payout or over 5 years or more, depending on the policy chosen.

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

child investment child investment

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

Types of Child Plans

Mostly all the insurance providers offer child insurance policies as a vital insurance product in the portfolio. These child plans may vary on different parameters basis the individual priorities and needs and come handy with customized and tailor-made features.

Different types of Child Plans in India are:

  1. Single-Premium Child Plan

    The policyholder pays a lump sum amount in the form of a single premium for the entire policy term and stays worry-free from remembering the due dates of premium payment. You’ll not have to come across any hassles of arranging finances for the premium payment. Some insurance providers additionally offer appealing discounts or reduce the premium on child plans.

  2. Regular Premium Child Plan

    Unlike a single premium child education plan, regular premium child policy offers you flexibility on payment of premium. You can pay the premium monthly, quarterly, half-yearly, or yearly.

  3. Child ULIP

    Child ULIP plan gives you a three-prolonged benefit, along with higher insurance coverage, contribution in the equity market, and disciplined investments. Three benefits mean that the nominated beneficiary, i.e. the child receives the sum assured on the demise of the insured parent or guardian. The future premiums are waived off and the maturity amount is paid when the policy matures, making sure that the future dream of your children is fulfilled.

  4. Traditional Child Endowment Plan

    When it comes to the child endowment plans it is essentially a traditional life insurance plan that provides security and savings. It enables you to save over some time and on policy maturity receive the lump sum amount. A child endowment plan will act as a financial wherein the financial objectives for the benefit of your child will be fulfilled. The premium is invested in debt instruments while the decision is kept with the insurance company. The bonus payable at maturity decides the returns.

Why Do You Need a Child Education Plan?

With inflation at an all-time high, the education sector has seen a massive rise in costs. Be it in India or elsewhere, the cost of education has deprived many passionate kids of quality learning. Therefore, the need for a child education plan cannot be understated and every parent should plan ahead and save for their children’s education. 

Here are some important factors why parents need to invest in a child education plan.

  1. Immediate financial protection

    In the case of death of a parent, child plans pay a lump sum amount in case of death of earning member who was paying the premiums for child plan. This money is completely tax-free and is usually sufficient to pay off any immediate debts so that child education is not impacted.

  2. Counter education inflation in India

    The education inflation in India currently stands at 11-12%. Now couple that to studying abroad, you will be left with a big dent on your savings if you don’t have a concrete plan. In fact, tuition fees alone for university education abroad have increased by 16% in the last 10 years. 

  3. Offset growing cost of tuition and foreign studies

    A child education plan at an early stage should be an ideal choice for young parents. You should know that according to experts, by 2040, an engineering degree would cost nearly Rs. 45 Lakhs! Investing your savings in a child education plan can help you offset increasing tuition fees, private school education, or pursuing studies in a foreign nation.

  4. Continued investment even after the parent’s death 

    The best child education plan not only pays a lump sum amount on death of the parent/guardian, but also continues investing on behalf of the insured.

    Insurance companies believe that the premium waiver benefit in a child education plan is key as it does not let the demise of the insured derail the investment plan for the child.

  5. High returns on Investments 

    At this stage, if you don’t want to compromise on your child’s education, you need to look for suitable options as soon as possible. Although the investment component allows you to create a decent corpus, in order for the power of compounding to work, you need to work with a longer-term, definitive timeline.

How Much Should You Invest In a Child Plan?

To answer this question, it is important to understand the importance of good education in India. India is rapidly moving towards a society where the gap between rich and poor is widening. A good education can be a foot in the door for your child to start earning a good livelihood and more importantly not become a liability on your earnings when you need your earnings for your retirement.

Cost of Education(Graduation course) in India in 2020 Cost of Education in India in 2040 Investment Amount
15 Lakh 45 Lakh 10000 per month for the next 5 years

How does it Work?

A child education plan can work as an Endowment Policy, a ULIP, or money-back. 

  1. Money-back Child Plans

    The money-back plan is so far the most sought after the plan. This scheme makes sure that your child will get survival benefit at regular interval of time. These plans are highly useful for individuals who need a lump sum money at regular intervals and help in life stage planning. 

    The disadvantage of using the money-back only is that sometimes the returns from this investment may not match the rate of inflation, especially when you plan to it for the education of your child. Cost of education is rising at around 12%. In comparison, money-back plans would give you approx. 4% - 8%, leaving you underfunded at the time of the goal.

    Moreover, money back plans have steep premiums. 

  2. ULIPs

    ULIPs are non-traditional plans and the returns depend on the market condition. In case of the demise of the parent, the sum assured would be received by the child as a lump sum. This will include the waiver of all the future premiums and the fund value upon its maturity.

    Do not forget that ULIPs deliver a wide variety of funds ranging from aggressive too conservative. ULIP schemes give you an option of switching funds from equity to debt and vice versa without paying tax on it.

  3. Endowment-based Child Plans

    The third operational child plan instrument could be the Endowment Policy. This policy is where you will receive the lump sum amount on maturity along with bonuses. This is beneficial as it gives space for preparation of your child’s expenses like higher education, etc. However, this is different from ULIPs, since it allows for a least guaranteed payment.

Sample Illustration

Let us Take Examples and Understand the Working of all Kinds of Child Education Plan:

Imagine, Mr Sharma has a child of 5 years and he would need money when his child turns 20 for higher education. He, thus, purchases a child policy for 15 years.

  1. Scenario 1:

    Mr Sharma needs a financial corpus of Rs 10 Lakh. So, he purchases a traditional endowment plan with a Sum Assured of Rs 10 Lakh for 15 years and pays premium every year. 

    If during the policy term (i.e. 15 years), Mr Sharma dies in the 8th year, the policy would not end. The insurance provider would pay a death benefit (generally the SA of Rs 10 Lakh) immediately and waive off the future premiums. This policy would then continue for the remaining 7 years. After completing 15 years of the policy term, the policy would mature and pay maturity benefit of Rs 10 Lakh. 

    Hence, the child policy pays the financial corpus, which Mr Sharma would require after the completion of 15 years for the higher education of his child. M. Sharma’s dream gets fulfilled even when he’s not around.

  2. Scenario 2:

    Mr Sharma buys a money-back policy that promises to pay around 20 per cent of the Sum Assured after the completion of every 5 years. After completing the first 5 years of this child education plan, Mr Sharma gets Rs 2 Lakh (where SA is Rs 10 Lakh).

    Henceforth, in the 10th year also, he receives another Rs 2 Lakh. In the 12th year, Mr Sharma faces an unfortunate death. This policy pays the total SA of Rs 10 Lakh regardless of the money-back benefits already paid. The insurer will waive off the premiums for the next 3 years and the plan continues.

    Upon the maturity of the best child policy chosen by him, the guaranteed maturity benefit, i.e. 60 per cent of the SA is again paid.

  3. Scenario 3:

    Mr Sharma purchases a ULIP plan and pays a premium of Rs 1 Lakh every year for 15 years. In case of his demise during the policy term of the child education plan, the insurance company will give the death benefit. Moreover, the insurer will waive off the premiums and the child education plan would continue. 

    On maturity of the plan, the insurer will pay the fund value that would aid Mr Sharma’s family to send his child abroad for higher education.

List of Documents Required for buying Child Insurance

Here’s a list of documents that will be required while buying a child policy:

  1. Proof of Age

    Birth Certificate, 10th /12th Mark sheet, and Passport.

  2. Proof of Identity

    Aadhaar card, Passport, PAN Card, Voter ID

  3. Proof of Income

    Proof of income showing the income of the buyer of the insurance.

  4. Proof of Address

    Telephone bill, Electricity bill, Ration card, Passport, Driving License

  5. Proposal Form

    Duly filled proposal form.

What is the Complete Child Insurance Plan Claim Process?

You must buy a child insurance plan for your child from an insurance provider that has a higher claim settlement ratio. This will make sure of the quick and smooth claim process and settlement in the times of crisis. Here’s the common claim process for almost every insurance provider:

  • In case of any situation for, which you need to file a claim, notify the insurance provider about the incidence ASAP. You can do this online by sending an email or by calling on your insurer’s toll-free number or simply by paying a visit to the nearest branch office.

  • Submission of the duly filled claim form is also necessary along with giving all the minute and necessary details such as the cause and the date of the incident, nominee’s name, etc.

  • Once you register a claim with the insurer, provide the necessary and supporting documents along with reports.

  • The insurance provider will appoint a surveyor to verify the case and the supporting documents.

  • If approved, and with no further inquiry, the insurance company transfers the claim benefit with 30 days of the furnishing documents.

What documents do you required for Child Insurance Claim Process?

You would require the following documents while filing a claim for child plan:

  • Duly filled claim form

  • Policy document

  • Medical certificate

  • Death certificate

  • Diagnostic reports, prescriptions

  • Post-mortem report (in case of unnatural demise),

  • FIR copy (in case of unnatural demise)

  • NEFT details

  • KYC of the nominee and the policyholder

Exclusions of Child Insurance Plan

The insurance provider does not offer coverage in the event of demise occurred under certain circumstances. They are known as exclusions. Child insurance plans do not include the following:

  1. Drug or alcohol abuse

    In case the policyholder dies due to drug overdose or alcohol abuse, the nominee does not receive any benefit.

  2. Self-harm or Suicide

    The nominated beneficiary does not receive any claim amount in case of the death due to suicide within one year of buying the child policy.

  3. Adventurous or Risky Sports

    In case the insured happens to take part in any adventurous or risky sports like skydiving, rock-climbing, racing, etc. that leads to death, the insurance provider does not entertain claims.

  4. Criminal Activities

    Any criminal or illegal act or act of war leading to the demise is also not covered under a child plan.

Understanding the Cost Structure of Education in India

Assuming that the rate of inflation is the equivalent 10% going ahead.

Now having said so, in today’s time somebody who desires to pursue engineering in any of the premier colleges in the country it would cost about Rs 10, 00, 00. And, then in the coming years say 15 years it would be somewhere between 40 to 50 Lakh.

Likewise, if a private medical college charges Rs 25, 00, 00 then you can easily calculate that in the next fifteen years you need to have a corpus of about a crore.

India is one of the most opulent developing countries across the globe. Gone are the days when India was only limited to be known for its rich culture and traditions. Today, it has also earned a name when it comes to the educational sector.

Today, in India, we have a plethora of options available in terms of schools, colleges and universities and opting for the ones that suit your requirements. However, it is prudent to understand the factors, which affect the cost of education in India.

Read below!

Accommodation: Today most of the Indian universities/ colleges provide accommodation facilities within the campus both for the Indian and non-Indian citizens. In case, you are or intend yourself to enrol into a college, which does not have an accommodation facility there is nothing to be worried about. One can conveniently look for personal accommodation.

Depending upon the suitability, one can opt for a rented flat or a private hostel with sharing room facility. Opting for private accommodation has its advantages. One can easily find a room between Rs 10, 000 and calculated annually would be around Rs 1, 20,000.

Additional Expenses (Every Week) Includes:

  • Outside Eating: Rs 1500 to Rs 4500

  • Public Transportation: Rs 50 to Rs 100

  • Private Transportation: Rs 500 to Rs 1000

  • Miscellaneous: Rs 200 to Rs 500

  • Leisure Activities: Rs 500 to Rs 1000

Undoubtedly, parenting a child is not an easy task. As the child grows, similarly the amount being spent on them also increases.

Primary Education: Generally, if a student is studying in the government school somewhere aged between 6 to 14 years the cost of education is almost negligible sometimes almost free. On the contrary, when it comes to private schooling the school mostly charges let's just say towards a lower end Rs 1200 to Rs 2, 000 every month.

Secondary Higher Education: The secondary higher education essentially covers children who are aged between 12 to 18 years. So, if a student is in a government school for 6 years at a stretch it would cost him approx Rs 30, 600 and in private schools, the parents would end up paying approximately Rs 3, 96,000.

In case, if the child is put up in a boarding school, the parents would end up paying Rs 18, 00, 000 for the coming 6 years. As per a survey conducted by Assocham, 169% has been the ascent in inflation in regards to both primary and secondary education from 2005 to 2011.

The Expense of Graduation and Post Graduation Education in India

  • Government College/ University: Rs 5, 00,000 to Rs 6, 00,000

  • Private College/ University: Rs 8, 00,000 to Rs 10, 00,000

  • International College/ University: Rs 1, 00, 00,000

The Expense of Medical Studies in India

  • Government College/ University: Rs 5, 00,000 to Rs 10, 00,000

  • Private College/ University: Rs 18, 00,000 to Rs 20, 00,000

  • International College/ University: Rs 1, 00, 00,000

The Expense of Commerce and Arts/Humanities in India

  • Government College/ University: Rs 2,000 to Rs 15,000

  • Private College/ University: Rs 2, 50, 000 to Rs 5, 00, 000

  • International College/ University: Rs 50, 00,000

The Expense of Engineering in India

The course of engineering is considered to be one of the most sought career options undertaken by a majority of students in India. Besides, it is also one of the reputed and well-paid jobs. The US Silicon Valley comprises of the Indian based- engineers.

For a four-year engineering course, a student ends up paying Rs 1, 25,000 to Rs 5, 00,000. And when it comes to India’s finest engineering colleges such as IIT, NIT, BIT’s Pilani, etc. the parents need to pay approximately Rs 10,00,000- to Rs 15,00,000 respectively.

For Post Graduation-

Just like the expense of engineering, you may consider the expense similarly.

One of the most cherished dreams for any medical aspirant is becoming a doctor. Becoming a doctor is something, which takes in a lot of hard work and sincerity and something to take extreme pride. In India, the medical seats are limited and the competition is high.

In terms of fees-structure and other expenses, the government colleges/ university have a reasonable structure with fewer than Rs 10, 00,000. However, in private colleges/ universities, the fees could easily go up to Rs 50, 00,000 for the equivalent.

And, if someone is interested in undertaking a postgraduate degree in the same field, then one should be mentally and financially stable to spend approximately Rs 30, 00,000 in a private institute.

As discussed earlier, raising a child is no meek man task and to raise a child in the best possible manner financial planning is of utmost importance. In case, as a parent you still wonder in regards to the importance of planning then we will help you.

The below table consists of the basic and essential educational expenses that are involved when it comes to raising one or two children:

Expense Yearly Expense For Single Child Yearly Expense For Two Children
Basic Expenses Involved In School
School Uniform Rs 3,000 Rs 6,000
Transport, Lunch and Tuitions Rs 36, 000 Rs 75, 000
School Shoes Rs 3500 Rs 7,000
Sports Kit Rs 3500 Rs 7,000
Bottles and Bag Rs 1800 Rs 3500
Coursebooks Rs 4500 Rs 8500
Computers Rs 2500 Rs 3800
School Club Rs 2500 Rs 4000
Stationary/ Newspapers Rs 3000 Rs 5600
School Trips Rs 3800 Rs 7000
Fair Rs 3500 Rs 5500
Building Fund Rs 15, 000 to Rs 25,000 Rs 30,000
Extra-Curricular Activities
Primary Level Rs 2,000 Rs 4,000
Secondary Level Rs 4,000 Rs 8,000
Coaching/ Tuition Expenses
Primary Level Rs 3,000 Rs 6,000
Secondary Level Rs 8,000 Rs 10,000

How to Get the Best Child Education Plan

There are many child plans offered by insurance providers; however, certain things should be considered while choosing the best child plan to ensure the best future for your child. Below-mentioned tips help in making a wise decision to best meet the child's needs.

  1. Start Early

    It is advised that you start investing as early as possible for the future of your child as it helps to build a larger corpus, which in turn, gives greater freedom in taking any financial decision.

    Most child plans offer maturity benefit and start giving payouts at key milestones in life after the child turns 18 years old. The overall benefit of the best child education plan is higher if one starts investing early.

    This tip cannot be stressed enough as most people do not realize that each additional year of investment means a bigger corpus. Starting the child education plan when the child says 5 years old or when he or she is 10 years old, may eventually translate into having to take a loan to pay off the tuition or college fees in the latter case.

    Starting early helps as the investment returns between starting a couple of years later for the same plan and the same amount can mean a difference of a few Lakh.

  2. Factor in Economic Variables

    It is important to understand that savings and investment for your child will be taken advantage of only in the forthcoming years. Multiple economic variables need to be factored in while deciding an appropriate sum assured.

    Inflation, an increase in the cost of education and healthcare expenses, among other economic factors, if accounted for properly will provide adequate funds for the child in the future. The best child education plan can help you fight this.

  3. Special Attention to Terms and Conditions

    You should scrutinize the fine print and understand the terms and conditions of the child education plans' policy document properly. The best child plan has unique features and it is important to interpret them correctly. This will prevent confusion at the time of maturity and/or in the payout.

    It will also help in selecting the best education plan as per individual requirements, one that is best for the child's needs. It makes sense to use our site to compare the various plans in detail and pick the child education plan that best suits the requirements.

  4. Choose the Premium Waiver Benefit

    In the event of your unfortunate death during the policy tenure, insurance companies often offer to waive the premium. This is known as premium waiver benefit or self-funding of premium. It helps in continuing the policy without straining the family including the child for premium payments.

    The child receives the full benefit at maturity, promised at the beginning while purchasing the policy. This feature is normally built into child plans; if not, then you should go for this rider.

  5. Opt for Partial Withdrawals Clause

    Emergencies can happen at any time and the child may require financial aid to tide over emergency cash requirement situations. The provision of partial withdrawals allows withdrawal of partial sums of money from the best child education plan to meet unforeseen expenses.

    This prevents any emergencies from causing any sort of financial instability in the family or the child's education or dreams. Partial withdrawals help in not disturbing financial planning and not resorting to regular income to pay off the requirements.

  6. Choice of Funds

    Child plans usually invest funds collected from policyholders in capital markets to earn a higher return. However, they offer the insured or policyholder, the choice to choose the type of fund to invest their money in depending on individual investment appetite and risk-taking ability.

    Those who are risk-averse may want their funds to be allocated in debt, which offers more stability against market volatility. People who want to earn a higher return on investment may be fine with their investment being put into equity.

    Investment Options like Systematic Transfer Plan and Dynamic Fund Allocation help in safeguarding investments against market instability. These child plans allow for higher return investments in the initial years by putting the money in equity-oriented firms and for stable growth in the later years by switching to the more secure debt funds.

    Most insurance companies ensure that the allocation is automatic and the parents do not have to worry about safeguarding the important capital to meet the upcoming future expenses of their loved one.

    These tips are only some pointers, which will help in choosing the best child plan. It pays to start early in securing the child's future. Also, reading up on child plans on our site and the insurance companies websites will ensure you know your ABCs before you pick the right plan.

  7. A Word of Caution

    It is important to choose a trusted appointee for the best child plan selected by you. Your appointee must be someone you share a strong relationship with and someone you can count on, as your child must be taken care of when you are absent.

    In case of an unfortunate event, the claim amount is received by the appointee till the child gets matured and capable of handling the lump-sum payout of sum assured. In case the appointee fails to take care of the child and turns out to be excessively careless, there are chances that the amount of money being exhausted before the child reaches the age when he/she needs it the most.

    So, it is best to be double sure before you choose an appointee for the policy.

  8. Illustration

    You bought the best Child Plan for your 6-year-old child with 10 years of the policy term and expecting to receive the maturity benefit of Rs 20, 00,000. You opted for a life cover of Rs 25, 00,000. Unfortunately, you died after 4 years the policy began. The insurer is liable to pay the appointee a sum of Rs 25, 00,000 and also to bear the premium to be paid for the rest of the policy term left, i.e. 6 years. The child will also get the maturity benefit of Rs 20, 00,000 once he reaches the age of 16 years.

Explore more Investment options

Child Investment Plan
Retirement Plans
Guranteed Return Plan
Ulip

Cost of Delay

So, if you have a child who is 5 years old. Let us see the cost of delay if you start saving the money today as compared to the next year.

The following values are calculated at an expected rate of return of 9%.

Monthly Investment Investment Tenure Maturity Value Maturity Value With Delay of One year Cost of Delay
10,000 10 1935143 1654832 280311
10,000 15 3784058 3345181 438877

Let Us Help You

At PolicyBazaar, we take pride in helping parents like you to ensure a bright future for your children. Every child is unique and so are his insurance needs. Who knows, your children might turn out to be future Einstein or Tendulkar. Make sure you financially equip your child to tap the opportunity when it knocks.

There are many variants of child plans as per your budget and needs; thus, it is always advisable to compare insurance quotes from various insurers. An online comparison makes it easy for you to match quotes with your specific needs and go for the best child education plan.

There are a number of options for you to look at when it comes to saving for your child’s secure future. The following table compares three different types of savings avenues. 

Child Plan versus Sukanya Samriddhi Yojana and PPF

FAQ's

  • Q: What does make a child plan special?

    Ans: A child education plan offers a comprehensive advantage of life insurance cover along with the maturity benefit. It acts as the safety net that ensures that a child's education is not affected due to a shortage of funds. With a child education plan in place, the child will receive a lump sum payout to fund their education.
    The key aspect of the child insurance plan is that the future premiums will be paid by the insurance company in the event of the parent/guardian’s death. The corresponding maturity benefits will be paid to the child towards the end of the policy term.
  • Q: What are the types of child plans?

    Ans: The following are the types of child insurance plans:
    • Savings Plan: Under this, the plan does not invest in the market. An individual either pays the regular premiums or for a limited period and towards the end of the policy term, the guaranteed payouts are received each year.
    • Investment Plan: These plans invest in the debt-equity markets wherein the premium is paid regularly or for a limited period, which is then invested in debt and equity instruments. As this is market-linked, such child plans offer good returns over the long term.
    On the premise of the financial risk appetite, choose from the fund options with varying risk degrees.
  • Q: What is a child education plan?

    Ans: Child plans are a type of insurance cum investment option, which enables an individual to create a corpus for the child's future over the policy term. Upon maturity, the child plan will receive the lump sum amount that can be used to pay the expenses in regards to the education of the child and so forth. The insurance cover amount in such plans is minimum 10 times of the premium paid amount.
    In case the policyholder passes away while the policy is still in force, the child or nominee will receive the death benefit as promised when buying the policy.
  • Q: How important is it to buy a child insurance plan?

    Ans: Any parents who do not wish to compromise on the bright future of their children and want to secure their financial future should look into buying a child insurance plan. Listed below are some of the key reasons why a child should be equipped with such a policy.
    • Use as the Collateral: In case a parent needs to avail of an education loan for the child in the future, then the child plan can be used as the collateral.
    • Fund Higher Education: The corpus built through a child education plan can be used to fund private tuitions, hostel accommodation, studies in a foreign nation, etc.
    • Medical Treatment: In case the child gets admitted due to an accident or any other medical condition, the child's insurance plan permits to withdrawal lump sum amount from the yet-to-mature policy.
    • Tax Benefits: The premiums paid towards the child plan remain tax exempted under Section 80C of the IT Act. The maturity benefits also remain tax exempted as per Section 10 (10D).
    Note: Tax benefit is subject to changes in tax laws
  • Q: When can one withdraw money from the child plan?

    Ans: One can easily withdraw the entire sum at any point after 5 years of the policy and before the end of the policy term. Partial withdrawals are also allowed with child plans that you can use towards your child’s liquidity needs.
  • Q: Are the proceeds from the child plan tax-free?

    Ans: Yes, the money withdrawn from the child plan and the money received on death or maturity is entirely tax-free. Here is how you can claim tax benefits:
    • Tax Deduction u/s 80C of the IT Act: The premiums payable for the best child education plan during a fiscal year are eligible for tax deductions u/s 80C of the IT Act, 1961. You can avail up to Rs.1.5 Lakh of tax deduction while calculating the taxable income. the IT Act, 1961. You can avail of up to Rs.1.5 Lakh of tax deduction while calculating the taxable income.
    • Tax Deduction u/s 10 (10D) of the IT Act: Benefits such as maturity benefit, death benefit, bonuses, give financial aid and assistance along with tax exemptions on the payout of the plans u/s 10 (10D) of the IT Act, 1961.
  • Q: When to buy a child education plan?

    Ans: Ideally, you must buy the best child education plan as soon as your kid is born. Nevertheless, buy a child education plan only when you understand the variable given below:
    • Knowledge – Inflation is an antecedent of rising costs and such surging costs do not allow savings. Even if you manage to save, such savings are eventually used in financial contingencies when your savings are not allocated to meet specific causes.
    • Type of Plan – Child plans come in both kinds of insurance variants namely, unit-linked insurance plans, and traditional plans. It is up to you to decide whether you want to experience market risks and reap better returns or want a traditional plan for guaranteed returns.
    • Benefits – Once you've decided the type of plan you'd like to buy, you must compare the benefits of the plan. Do thorough research and find out what the policy's death benefits and maturity benefits are. Also, find out if the plan comes with any bonus if it's a traditional child policy.
    Figure out if there is any feature of guaranteed additions in the ULIP plans. Guaranteed additions and bonuses play an important role in enhancing the financial corpus accrued and must be given due consideration.
  • Q: Can I purchase a child insurance plan for my 15-year old kid?

    Ans: Yes, you can buy a child plan for your 15-year old kid via two modes – offline and online. In the offline mode, you need to schedule a meeting with an insurance agent of the insurer or visit the insurers' office. Or you can simply visit the website of insurance web aggregators and insurers.
  • Q: What is the difference between a nominee and a beneficiary?

    Ans: As the name suggests, a nominee in a child policy is a person who is appointed or nominated by the insured to take care of his/her assets, financial records, etc. after his demise. The nominee becomes responsible for disbursing the profits or earnings among the legal heir. A beneficiary in a child education plan is a person who has a financial interest in the policyholder's life. The beneficiary can either be a financial institution like a bank that provided finance/loans to the insured or legal heirs. In some cases, the beneficiary and nominee can be the same individual.
  • Q: Why is beneficiary or nominee important in a child plan?

    Ans: Beneficiary plays a crucial role in a child's plan. When the parent dies, all the money goes to the beneficiary. Hence, it is really important that you know and understands the role of the beneficiary properly. Once you are aware, choose a beneficiary wisely if you want the proceeds to go to your child and not be misused.
  • Q: How can I choose the right child education plan?

    Ans: You must choose the right and the best child education plan after carefully considering the factors mentioned below:
    • Premium Waiver Benefit
    • Your monthly saving
    • Number of children
    • Adequate cover
    • Rate of inflation
    • Market conditions
  • Q: Can I add my kid to my health plan?

    Ans: Yes, you can add your kid to your health plan together with your spouse. You’ll have to pay an extra premium for the addition of any family member to your health insurance policy.
  • Q: How much does it cost to insure a child?

    Ans: The amount of premium will be based on several factors such as the term of the policy, age, the sum assured, etc.
  • Q: Can I purchase a health insurance policy for my child only?

    Ans: Yes, there are certain child-only policies where no guardian or parent is covered. However, the age of the policyholder must be 18 years or less.
  • Q: What is the meaning of child life coverage?

    Ans: Child life coverage is the sum assured on death that is offered to the nominees in the event of the policyholder’s death.
  • Q: Who should you buy a child insurance plan?

    Ans: If your kid is aged between 0 and 15 years, you must buy a child plan for your child. Moreover, any individual who wishes to create a financial corpus to fund your child's education and beat inflation via regular investments must opt for a child insurance plan.
  • Q: How can a child insurance policy secure your kid’s future?

    Ans: A child plan secures your kid’s future in the following ways:
    • Offers financial security during the most critical years of the life of your child.
    • Provides an ideal blend of savings and investment in just one plan.
    • Protects the future of your child, even when you’re no longer around.
    • Favours long-term, disciplined savings that otherwise becomes a challenge.
Child education
Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.
Average Rating
(Based on 222 Reviews)
Child Plan3

Nothing is more important than securing your child's future

  • Life Cover paid to family to meet immediate expense
  • Future premiums are paid by the Insurance Company

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Child Insurance Reviews & Ratings
4.5 / 5 (Based on 222 Reviews)
(Showing Newest 10 reviews)
Vivek
Bhuban, June 21, 2021
Long-term plan
I got the long-term plan for my child and it is known as child insurance plan. The plan is good and I really like it. It is also reliable in nature. Kudos team.
Veer
Lakhawati, June 18, 2021
Less documentation required
In the buying of the child insurance plan I have to submit only less documents. I really like the and it is easy to buy. It is one of the hassle-free plan.
Anish
Bandikui, June 16, 2021
Appropriate plans available
I have availed the best child plan with low premium rates. I compared various plans at one place and it has been the best decision of mine. I am quite satisfied and relieved.
Deep
Baijalpur, June 15, 2021
Futuristic plan for my son
I have availed the child insurance plan for my son recently and it is one of the amazing plan. I checked various child plans into the website of Policybazaar and found one of the best plan.
Om
Pune, June 11, 2021
Life cover
In my term plan I have got a better coverage for myself. It is a plan that is beneficial for my family when I am not around. A best way to give safety to my family members.
Harshit
Patna, June 11, 2021
Great work and plans
I have recently bought the term insurance plan from the website of policybazaar. The plan is supremely very good and under my budget. I am much happy and satisfied with the services.
Amit
Pune, June 10, 2021
Discount available online
I have recently bought the child insurance plan and it is a kind of life insurance plan. I got the online discount when I bought this plan. It is good and as compared to others it is best.
Aditi
Kerala, June 10, 2021
Low premiums
I have got the child plan 3 years back and now my son has turned 6 years old. It is the plan to save money for his future and the premium price of this plan is quite less. It is under my budget.
Arpan
Baragarh, June 08, 2021
Supportive plans
It is one of the supportive plan for me and for my child. I always wanted a different yet unique plan for my child. So, I went for a child insurance plan. This plan works as a wonder for my baby girl. Great one.
Rupal
Delhi, June 08, 2021
Different plans at one place
I came across different child plans when I visited the website of Policybazaar. I found ultimate good plans for my child and compared a lot before buying. The plan has so many features in it which makes it reasonable to use. My ultimate goal is to provide good future to my son.
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