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Child Plan

Like most parents, you would also have various concerns when it comes to the future of your child. And, of course, a lot of questions too. Questions like...

Can I afford my kids’ education?

Do I have enough money in my bank account?

What if something bad happens to me, or them?

But many of you don’t consider the most important question – Should I buy a child plan for my kid?

Unlike some questions, this one’s easy to answer.

‘Yes, you should’

A college degree, regardless of the surging cost of education, remains a major and the most important achievement in the modern economy. You’re more likely to get a job and earn an adequate salary the more educated you are.

Yet many parents aren’t preparing for it. The outrageous cost of higher education, with a lack of parental savings and the economic advantage of going to college or university, has led to historic levels of education loans.

Here Child Education Plan Comes to Rescue:

Child Plan is insurance cum investment plan that kills two birds with one stone, i.e. financially securing your kids’ future and financing the decisive moments in your kids’ life like higher education and marriage.

So, like a double-edged sword, the best child education plan is designed to safeguard the child’s future in case of your unfortunate and untimely demise and at the same time, builds a financial corpus over a time to be utilised to finance prime moments in your kid’s life.

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Compare Best Child Insurance Plans in India

A wise mom once said, "Your child will keep building castles in the air; you better start buying bricks for those castles today." Loving your child is what comes naturally, but as a responsible parent, you have certain obligations towards your child. Getting a child education plan is one such obligation; in fact, the most important one. If you are reading this, you've already proved that you are a concerned parent finding ways to secure your child's future. Let us help you in understanding what exactly a child plan is and the need to go for the best one.

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Child Education Plan

Child education plan comes loaded with several benefits like building a financial corpus for your child's future needs, life cover, and the option of adding specific riders. So, invest in the best child education plan, but do not forget to compare quotes before signing on the dotted line.

Best Child Plan - Eligibility Criteria:

Child Plans

Entry age

Maximum Maturity Age

Minimum Annual Premium

Minimum Sum assured

Bajaj Allianz Young Assure

18-50 years

 60 years

N/A

10 times the Annualized premium

Birla Sun Life Insurance Vision Star Plus

18-55years

75 years

N/A

Rs. 1 Lakh

Max Life Shiksha Life Super

21-50 years

65 years

Rs. 25000/-

Rs. 2.5 Lakh

ICICI Pru Smart kid Assure plan

20-54 years

64 years

Rs. 48,000/-

 

Rs. 45,000/-

AEGON Life Rising Star Insurance Plan

18-48 years

65 years

Rs. 20,000/-

10 times of the regular Annualized premium

MetLife Smart Child Plan

18-55 years

N/A

Rs. 18000/-

10 times the annualised premium

Shriram New Shrividya Plan

18-50 years

70 years

N/A

Rs. 1 Lakh

Bharti AXA Life Child Advantage Plan

18-55 years

76 years

Depends on Minimum Sum Assured

Rs. 25,000/-

HDFC SL YoungStar Super Premium

18-65 years

75 years

Rs. 15,000/-

10 times the annualised premium

Exide Life Mera Aashirvad Plan

21-50 years

65 years

N/A

Rs. 3.5 Lakh

SBI Life Smart champ Insurance Plan

21-50 years

70 years

Rs. 6,000/-

Rs. 1 Lakh

Edelweiss Tokio Life Edu Save Plan

18-45 years

60 years

Rs. 6,968/-

Rs. 2.25 Lakh

Aviva Young Scholar Advantage Plan (Child Education Plan)

21-45 years

60 years

Rs. 50,000/-

10 times the annual premium

Future Generali Assured Education Plan (Child Education Plan)

21-50 years

67 years

Rs. 20,000/-

N/A

MetLife College Plan (Child Education Plan)

20-45 years

69 years

Rs. 18,000/-

Rs. 2,12,040/-

SBI Life Smart Scholar (Child Education Plan)

18-57 years

65 Years

Rs. 24,000/-

20/7 times the annual premium (regular pay) 1.25 times single premium (single pay)

 

What is Child Education Plan?

The surging cost of education is one of the biggest troubles for Indian parents.

Here are some facts supporting this statement:

In an online survey conducted by ET Wealth, over 60% of Indian parents listed this as their biggest worry. This was shadowed by not saving enough, lack of knowledge, and starting too late.

However, here they didn’t consider the actual biggest worry - the risk of their own unfortunate demise. Well, you should have. As per statistics of the National Crime Records Bureau, every 90 seconds an Indian citizen dies in an accident.

A Child Education plan offers the combined benefits of savings and protection. There are some unit-linked insurance plans that provide the opportunity to create wealth as well.  Child education plans are designed to provide financial security to your child so that his or her education never gets hindered due to an unfortunate event in the future.

Key features of Child Insurance Plans:

A child plan comes loaded with a wide range of useful features to ensure a rewarding return and protection. Quite expectedly, a child education policy is a must for every parent.

Quite often, a child education plan is designed to offer safety to the kids in the case of financial crunch during vital decisions of life. Child plans are available in both non-linked and linked types.

Here’s a little overview of just some of the many helpful and useful features of the best Child Education Plan:

Sum Assured

The sum assured in a child education plan is the amount of money that is paid out in event of the unfortunate or untimely demise of the policyholder. Most of the time, the sum assured must be more than 10 times the current gross earning of the policyholder.

Premium Amount

It is subject to the sum assured and the amount of maturity benefit you opt for. You may opt to pay the premium amount frequently on regular intervals or for a certain period of time. Most of the life insurance providers offer options such as annually, semi-annually, quarterly, and monthly mode of payment. The amount of premium varies depending on the sum assured you choose in case of the traditional child plans.

Policy Term

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. For example, if one of your children's age is 10 years, then choose the policy term of 8 years.

Waiver of Premium Benefit

Waiver of Premium (WoP) is an inherent rider of a child education plan. This feature is applicable if the policyholder dies in a stipulated period of time. In such a case, 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 nominee is entitled to receive the maturity amount as mentioned in the policy document. In case this feature is not a part of the plan, it is recommended to include it without failure.

Partial Withdrawal

It is often seen that parents instead of holding back themselves for the policy to mature, like to withdraw the sum assured in multiple fragments whenever they need it. This is often selected to fulfil the financial needs of the child at certain key moments. Many child plans also come with an option of partial liquidity.

Premium Payment Mode Sum Assured

The sum assured must not be less than at least 10 times your current income, says the thumb rule.

Regular premium- Under this mode of premium payment, you need to pay the premium on a regular basis, viz. annually, semi-annually, or quarterly.

Single premium - Under this mode of premium payment, the premium is paid only once.

Maturity Amount

You should choose the maturity amount keeping an eye on your child’s future. You can consult a financial advisor and remember the inflation rate along with interest rates and all other factors, plan the maturity amount that you would need at policy maturity. You can receive the maturity amount as a lump-sum payout or over a period of 5 years.

Also, child education plan such as single premium plan may not offer appropriate maturity features and benefits, so go through the fine prints of the policy document before applying.

Funds’ Choice

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

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.
  • Premium Waiver Benefit – This rider may be already added to the best child education plan, so check your policy document in this regard.
  • Critical Illness Rider Benefit – Critical Illness rider benefit offers coverage for a pre-determined set of critical diseases.

Advantages of a Child Plan

A child plan offers a wide range of exciting and unique benefits to the policyholder. With amazing advantages, a child education plan is a must-have in your kitty. This will help you make sizeable savings for your child without having to run from pillar to post.

Here’s a rundown to the advantages of the best Child Education Plan:

Corpus for Child's Education

Even with minimum premium payment, child plans are able to provide as much as 10 times the amount paid in the child plan. This lump sum amount in child education plans can be foremost utilised towards education expenditure.

A child education plan is often enough to pay for college education, and even higher education in a foreign country. 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.

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. This can be used for medical treatment of the child when he or she falls ill. Such partial withdrawals come in handy when the child is hospitalised due to an ailment, minor accident or a more serious medical condition. The best child plan helps to reduce the financial burden caused by medical expenditure and such payouts act as an add-on for one's health insurance plan.

Supports the Child in the Absence of Parent(s)

Death does not come with an invitation and no amount of preparation can leave on ready for such an event. The consequences are more so for the innocent child. The death of the parent(s) causes severe trauma to a child and can leave his or her future hanging by a thread. The insurance company offers a premium waiver if the parent (i.e., the insured) passes away during the policy term of a child education plan.

The premium waiver benefit often comes inbuilt with the best child education plan. If not, one should definitely opt for this rider. The child receives a lump sum amount promised at the time of purchasing the best child plan and does not have to pay balance premium.

This rider enables the policy to continue without any breaks and passes the financial burden of remaining premium to the insurer.

Income Protection for the Child

A child education plan also protects the income of those children who start earning at a young age. It includes child actors, musicians, artists and performers among others. It provides the advantage of capital appreciation over the long-term for the child.

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. In fact, international education is significantly more expensive. 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 plan is a great education policy and the best investment plan for the child. The child education plan also instils discipline and helps form the habit of saving to secure the child's future.

Benefits of Child Insurance Plans

Apart from the main advantages, child insurance plans have some benefits also. They are:

Tax Benefit

You can avail tax benefits under a child plan on death or maturity claim profits under section 10 (10D). Moreover, the premium paid for a child education plan is eligible for tax deduction under section 80C of the Income Tax Act, 1961.

Maturity Benefit

At the time of maturity of the child plan, the sum assured is paid out to the guardian or parent. In the event of the early demise of the insured, the kid is allowed to get all the benefits of the child plan.

Loan Benefit

You can also avail secured loans against a child education plan.

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 customised and tailor-made features.

Different types of Child Plans in India are:

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 making arrangement of finances for the premium payment. Some insurance providers additionally offer appealing discounts or reduce the premium on child plans.

Regular Premium Child Plan

Unlike 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.

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.

Traditional Child Endowment Plan

The premium is invested in debt instruments while the decision is at the kept with the insurance company. The bonus payable at maturity decides the returns.

How is it Different from a Term Plan?

Scenario

Term Plan

Child Plan

In case the Policyholder dies

The death benefit is paid and the policy comes to an end

The death benefit is paid and the policy continues as the insurer pays rest of the premiums.

In case the Policyholder survives

No Maturity Benefit

Maturity Benefit

Best Child Education Plans in 2019

So far, we’ve discussed a lot about child plans. So, if you’ve made up your mind of buying one, let’s discuss the best child insurance plans in India:

Insurer

Plan Name

Type of Plan

Policy Term

Plan Benefits

Sum Assured

Bajaj Life

Future Gain – Premium Waiver Option

ULIP

Minimum: 10 years

Maximum: 30 years

-Maturity Benefit: the regular premium fund value along with top-up premium fund value as on the date of maturity.

-Death Benefit: This is payable as a lump sum is –

  • The higher of the SA ore regular premium fund value along with
  • The higher of the top-up premium SA or the top-up premium fund value

-Surrender Benefit: This option is available at any time.

For> 45: Up to 10 times the annualized premium

For=<45: Up to 7 times the annualized premium

HDFC Life

Click2Wealth – Premium Waiver Option

ULIP

Minimum: 10 years

Maximum: 40 years

-Maturity Benefit: you will get your fund value on maturity.

-Death Benefit:

  • Death of Life Assured – Highest of the fund value, 105 per cent of total paid premiums, or total SA less a sum of Partial Withdrawals
  • Death of the Proposer*: Equal sum of modal premium credited to Fund Value.

-Return of Mortality Charges

-Partial Withdrawal

-Settlement Option

-Top-up premiums

Single Pay – 1.25 times the single premium

Regular & limited pay – Higher of:

  • 10xAP
  • 0/5xPTxAp

Top-up –

1.25 times the top-up premium

Max Life

Online Savings Plan – Premium Waiver Option

ULIP

Choose your policy term basis on maturity age (opted by you) and the variant.

-Maturity Benefit: you will receive the Maturity amount equal to the fund value.

-Death Benefit:

  • Death of Life Assured (Variant 1)– Highest of the fund value, 105 per cent of total paid premiums, or total SA less a sum of Partial Withdrawals
  • Death of Life Assured (Variant 2) – Lump Sum Benefit, Family Income Benefit, Fund Value shall be paid on the maturity date and funding of premiums.

 

Variant 1 – Cover multiple-x Annual Premium

Variant 2 – Maximum Cover multiple is fixed at 10 times.

ICICI Pru

Smart Kid

ULIP

Minimum: 10 years

Maximum: 25 years

-Death Benefit:

  • Lump Sum Benefit
  • Smart Benefit

-Maturity Benefit: You’ll receive the Fund Value that will include top-up fund value (if any).

 

Up to 10 times the annualized premium

Edelweiss Tokio

Wealth Plus – Rising Star

ULIP

Minimum: 10 years

Maximum: 20 years

-Additional Allocation

-Maturity Benefit:

You will receive the Fund Value as the maturity benefit.

-Settlement Option

-Death Benefit:

  • Death of Life Assured – Highest of the fund value, 105 percent of total paid premiums, or total SA less a sum of Partial Withdrawals along with highest of the top-up fund value, 105 percent of total top-up paid premiums or top-up SA

10 times the Annual Premium

*Death of the Proposer benefit in HDFC Click2Wealth is applicable only for Premium Waiver Option.

Bajaj Life Future Gain

Bajaj Life Future Gain is a Unit-linked Endowment Plan by Bajaj Allianz Life Insurance Company, which offers maximum premium allocation to ensure that your hard-earned money is fully utilised towards your set goal.

Key Features:

Some of the key features of Bajaj Life Future Gain ULIPs are:

  • Maximum premium allocation
  • Option to make payment of top-up premium
  • Option to change premium payment frequency
  • Choice of 7 funds
  • Partial withdrawal option is available
  • Settlement option
  • Option to add riders to enhance your coverage
  • Option to reduce the SA

Eligibility Criteria:

Parameter

Minimum

Maximum

Age of Entry

1 year

60 years

Maturity Age

18 years

70 years

Policy Term

10 years

The term policy will be:

Premium Paying Term (PPT)

5 or 6

Other PPTs

Policy Term

10,15 to 20 years

10,15 to 30 years

Premium Payment Term (PPT)

5 years

30 years

Premium Payment Frequency

Monthly, Quarterly, Semi-annually, Annually

HDFC Life Click2Wealth

HDFC Life Insurance Company offers HDFC Life Click2Wealth – a Unit-linked Life Insurance Plan. This ULIP plan offers market linked returns with minimal charges and provides financial protection for your child.

Key features:

Listed below are some of the key features of HDFC Life Click2Wealth:

  • Premium waiver benefit
  • Unlimited free fund switching with choice of 8 fund options
  • Minimal charges
  • Return of Mortality Charges
  • Systematic Transfer plan strategy

Eligibility Criteria:

Parameter

Minimum

Maximum

Age of Entry

0 years

65 years

Maturity Age

18 years

99 years

Policy Term

10 years

40 years

Premium Payment Term (PPT)

Limited: 5,7, & 10 years

Regular: 10-40 years

Premium Payment Frequency

NA

Max Life Online Savings

Max Life Online Savings plan is a non-participating, unit-linked insurance plan, which provides market linked returns along with life insurance protection. You can choose your fund option and death benefit basis your need and requirement.

Key features:

Following are the key features of Max Life Online Savings plan:

  • Unlimited free switches
  • Zero Policy Administration Charges and Premium Allocation
  • Choice of fund options or investment strategy
  • Dynamic fund allocation
  • Choose your annual premium

Eligibility Criteria:

Parameter

Minimum

Maximum

Age of Entry

18 years

Variant 1: 60 years

Variant 2: 54 years

Maturity Age

NA

Variant 1: 85 years (for >= 10 pay variants) and 70 years (for >= 5 pay variants)

Variant 2: 64 years

Policy Term

Variant 1: 5 years (for Maturity age <=70 years)

10 years (for Maturity age between 71 years and 85 years)

Variant 2: 5 years

Variant 1: 52 years (for Maturity age <=70 years)

67 years (for Maturity age between 71 years and 85 years)

Variant 2: 30 years

Premium Payment Term (PPT)

Variant 1: 5 years (for Maturity age <=70 years)

10 years (for Maturity age between 71 years and 85 years)

Variant 2: 5 years

Variant 1: up to chosen Policy term (for Maturity age <=70 years)

Up to chosen policy term (for Maturity age between 71 years and 85 years)

Variant 2: Up to chosen policy term

Premium Payment Frequency

Monthly, quarterly, semi-annually, annually

ICICI Pru SmartKid

ICICI Pru SmartKid plan is a unit-linked insurance plan by ICICI Pru Smart Life. This plan helps you save money and build a financial corpus for your child’s future.

Key Features:

Some of the chief features of ICICI Pru SmartKid Plan are:

  • Premium Waiver Option
  • The convenience of purchasing online
  • Choice of 4 fund options
  • Free switching options
  • Choice of investment strategy

Eligibility Criteria:

Parameter

Minimum

Maximum

 

Regular Pay

Single Pay

Regular Pay

Single Pay

Age of Entry

20 years

20 years

54 years

54 years

Maturity Age

30 years

30 years

64 years

64 years

Policy Term

10 years

10 years

25 years

NA

Premium Payment Term (PPT)

Same as the Policy term

Single Pay

Premium Payment Frequency

Regular Pay: Monthly, semi-annually, and annually

Single Pay: Single

Edelweiss Tokio Wealth Plus

Edelweiss Tokio Wealth Plus is a non-participating, unit-linked life insurance plan, which offers life cover along with investment strategies.

Key Features:

Some of the main features of Edelweiss Tokio Wealth Plus plan are:

  • Rising Star Benefit
  • Extra Allocation
  • Premium Booster
  • Liquidity – Partial Withdrawal option
  • Additional Allocations

Eligibility Criteria:

 Parameter

Minimum

Maximum

Age of Entry

1 year

55 years

Maturity Age

18 years

70 years

Policy Term

10 years

20 years

Premium Payment Term (PPT)

5 years

Policy term minus 1

Premium Payment Frequency

Monthly, quarterly, semi-annually, annually


      • Do you really need a Child Education Plan?

        Yes, you do!

        Here's why - at the present rate of inflation, the ever-soaring costs of education worry us all.

        Did you know 65% of the parents spend more than half of their annual income on the education of their child and extra-curricular activities?

        According to a survey on “Parents wary of rising education cost of their children” of young parents for the education of their kids revealed that the average spending on a Single child at primary or secondary education on the expenses excluding the tuition fees has risen from Rs. 65,000 in 2011 to Rs. 1 Lakh (approx) in 2019.

        Child Education Plan

                                                                                                        [Image Source: ICICI Pru]

        Child Education Plan critics debate that these plans come at a higher cost as compared to a term insurance plan. They say that rather than allocating a large amount of money as premium to child insurance, a parent must but a term plan with the same sum assured for him and invest the remaining amount in mutual funds. After the policy matures, he will have a huge and bigger financial corpus.

        Child Plan

                                                                                                        [Source: ET]

        However, they miss out on a very important and crucial detail.

        What happens when a parent faces an unfortunate and untimely death five years after buying the plan?

        The term insurance plan will give a lump-sum amount of money for the immediate requirements and need of the policyholder’s family and the mutual fund investment will also stop. However, the best child education plan will not only pay a lump sum amount but also continue making an investment on behalf of the insured.

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

  • How Does it Work?

    A child education plan can work as an Endowment Policy, a ULIP, or money-back. The money-back plan is so far the most sought after the plan. This scheme makes sure that your kid will get survival benefit at regular interval of time. These plans are highly useful for individuals who need 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 percent in comparison to this, money-back plans would give you approx. 4-8 per cent, leaving you underfunded at the time of the goal.

    Moreover, money back plans have steep premiums. Then again, ULIP plans 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 ULIP plans to 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.

    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.

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

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

    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.

    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 percent of the SA is again paid.

    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.

  • Documents required for Child Policy:

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

    Proof of Age:

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

    Proof of Identity:

    Aadhaar card, Passport, PAN Card, Voter ID

    Proof of Income:

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

    Proof of Address:

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

    Proposal Form:

    Duly filled proposal form.

  • Tips to buy 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 kid. Below-mentioned tips help in making a wise decision to best meet the child's needs.

    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 realise that each additional year of investment means a bigger corpus. In fact, 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.

    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.

    Special Attention to Terms and Conditions

    You should scrutinise 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.

    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 definitely go for this rider.

    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 in 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.

    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 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 on the insurance companies' websites will ensure you know your ABCs before you pick the right plan.

    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.

    Illustration

    You bought the best Child Plan for your 6-year-old kid with 10 years of policy term while 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.

    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.

You may also Like to Read: SBI Sukanya Samriddhi Yojana

Plan Name Plan Features Entry Age - Min/Max Maturity Age - Min/Max Policy Term(PT) & Policy Paying term(PPT) Plan Benefits Sum Assured in case of Death
Smart Kid Solution with ICICI Pru Smart Life
  • Loyalty Benefits inform of Wealth Booster & Loyalty Additions.
  • Select from Fixed portfolio Strategy or LifeCycle based Portfolio Strategy, based on your risk appetite
  • Accidental Death Benefit rider offered with this plan
  • Partial Withdrawls allowed after 5 yrs of policy term.
  • Tax deduction is available under sec 80(C) when Sum Assured is atleast than 10 times Annual premium.
20 - 54 Years 64 Years PT: 10 - 25 Years
PPT: Same as policy term
Maturity Benefit:On maturity of the policy, you will receive the Fund Value with the option to take it as Lumpsum or in form of periodic installments. Death Benefit:The Lump Sum benefit is paid whch is higher of the two amounts:
• Sum Assured
• Minimum Death Benefit *Smart Income Benefit: Incase of Death the company pays remaining premium installments during policy term & fund value is paid to nimminee.
For entry age below 45:
Higher of
10 * Annualized premium
or
0.5 * policy Term * Annualized premium

For entry age equal or above 45:
Higher of
7 * Annual Premium
and
0.25 X Policy term X Annual Premium *Minimum Death Benefit = 105% of the total premiums paid including Top-up premiums, if any.
Aegon Life iMaximize Insurance Plan - Benefit option II
  • No premium allocation charge
  • You can choose from 3 Unit linked funds viz. Blue Chip Equity Fund, Debt Fund, and Secure Fund as per your investment objectives.
  • Option to boost your Fund Value through Top-Ups
  • Tax deduction is available under sec 80(C) only when Sum Assured is atleast than 10 times Annual premium.
18 - 50 Years 65 Years PT: 15, 20, 25 Years
PPT: 10, 15 Years or equal to PT
Maturity Benefit: You receive the Total Fund value (including the Top-Up Fund Value) as on the maturity date. Death Benefit * Option 2: The nominee receives the Maximum of Sum Assured or 105% of all premiums paid immediately. Company will pay all future premiums & pay fund value at end of policy term.An amount equal to the Annualised Premium will also be paid paid to the beneficiary at the start of every Policy year. For entry age below 45:
Higher of
10 * Annualized premium
or
0.5 * policy Term * Annualized premium

For entry age equal or above 45:
Higher of
7 * Annual Premium
and
0.25 X Policy term X Annual Premium
HDFC SL Young Star Super Premium
  • Yearly payments to your family in case of your unfortunate demise
  • Flexible Benefit Payment Preferences – Save Benefit or Save-n-Gain Benefit
  • Opportunity to invest in a choice of funds
  • Tax deduction is available under sec 80(C) when Sum Assured is atleast than 10 times Annual premium.
18 - 65 Years 75 Years PT: 10 - 20 Years Maturity Benefit: At the end of the policy term, you will receive the accumulated value of your funds. Death Benefit: * Save Benefit Option: The Sum Assured shall be paid to beneficiary immediately ,The company shall pay all future policy premiums & pay the fund value to the beneficiary at end of policy term. * Save n Gain Option: The Sum Assured shall be paid to beneficiary immediately. 50% of future policy premiums shall be paid by the insurer, the fund value shall be paid at end of policy term & 50% of the all future premiums shall be paid to beneficiary on an annual basis. Min:
For age less than 45 Years:
10 * Annualized premium
For age equal to 45 Years and above:
7 * Annualized premium
Max: 40 * Annualized premium
HDFC LIFE Young Star Udaan - classic waiver (traditional plan)
  • Participating endowment and moneyback plan with multiple options
  • 3 maturity benefit optons that will help you achieve key milestones of your child's aspiration.
  • Flecibility to choose from a wide range of Policy and premium payment term
  • Tax deduction is available under sec 80(C) when Sum Assured is atleast than 10 times Annual premium.
18 - 55 Years 33 - 75 Years PT: 15 - 25 Years
PPT: 7, 10 Years, Policy Term minus 5 Years
Maturity benefit options:
Option 1(Aspiration): 125% of sum assured
Option 2(Academia): 130% of sum assured
Option 3(Career): 140% of sum assured Death Benefit Option: It shall be higher of Sum Assured on Death or 105% of premiums paid.

For age less than 50 Years:
10 * Annualized premium
For age equal to 50 Years and above:
7 * Annualized premium
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 you to decide whether you want to experience market risks and perils 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 a thorough research and find out what are the policy’s death benefits and maturity benefits. Does the plan come with any bonus if it’s a traditional child policy? Is there any feature of guaranteed additions in the ULIP plans? Guaranteed additions and bonus play an important role in enhancing the financial corpus accrued and must give due consideration.
Q:

What is the difference between a nominee and 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/loan to the insured or legal heirs.

In some cases, the beneficiary and nominee can be the same individual.

Q:

How can I choose the right child education plan?

Ans:

You must choose the right and the best child education plan after considering the factors mentioned below:

  • Premium Waiver Benefit
  • Your monthly saving
  • ULIP
  • Number of children
  • Adequate cover
  • Rate of inflation
  • Market conditions
  • Government Policies
  • Other factors
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:

Can I avail tax benefits under a child policy?

Ans:

Yes, you can avail tax benefits under a child education plan.

  • 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.
  • 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.
Child Insurance Reviews
TOTAL REVIEWS (6)
Dharmendra
Varanasi
July 12, 2019
Best services, from pre to post sale.

I got ICICI Pru child insurance from Policybazaar after comparing various policies. I got the best price and Policybazaar has always given the best services.

Akansha
Tikrikilla
July 10, 2019
Compare, buy, save, stay happy.

As always, I got the best support, price and information on Policybazaar for getting my child’s future secure. Thank you Policybazaar.

Mayank
Ludhiana
July 08, 2019
Best plan for my child

HDFC life plan is the best for child insurance. They have high claim settlement and the customer services are amazing. I am sure my kid’s future is now secure.

Madhuban
Kaushambi
July 03, 2019
My child is now secure

I got Bajaj life plan after a lot of research and found this to be the most promising with the highest coverage. Further, I got it at a low premium from Policybazaar.

Rajdeep
Rajgarh
July 01, 2019
Best plans ever

I recently got to know the benefits of child insurance and it really is promising. I was able to compare the benefits on Policybazaar and have got the best one for my little kid.

Sameer
Holagarh
June 29, 2019
Quick and easy

I got my child’s insurance from Policybazaar. It was quick and very easy. I got a quite low premium and the return plan seems to be good.

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