Child Plans Emerging In The Indian Insurance Market

Buying insurance plans for infants and young children has become like a trend budding everyday thus, making a significant comeback in the Indian insurance market. Rishi Piparaiya, director- marketing and sales, Aviva Life Insurance believes that the increasing education cost has grown up the sensitivity among young parents about insuring their child’s future. He explained it with an example stating the fee of a reputed medical college would be around Rs 2 crore after 10 years from today.

Investing in your child's future:A wise decision & a loving choice

Benefits of Investing In Child Plan

Waiver of Premium Benefit

Future Premiums are paid by the insurer upon death of policyholder

Flexible Payout Options

Your premiums help your child achieve their dreams through lump sum or regular payouts

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Tax Benefits^

You get tax benefits under Section 80(C) and no tax on returns under Section 10 (10D)

Investment Flexibility

It offers the flexibility to invest at regular intervals or as a one-time contribution

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

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58.9 Million

Registered Consumer

Insurance Partners

26.4 Million

Policies Sold

He added that self-employed class is expected to bring-in larger demands marginally in comparison to salaried class. Also, Aviva India is planning to launch more such plans.

Child insurance, unlike life insurance term plan, pays the death benefit if case of policyholder’s demise and with the balance premium paid by the insurer, the policy continues. Child plan can be purchased as a ULIP or traditional plan. In case of traditional plan, there are fixed returns at the time of maturity or at fixed intervals whereas, ULIP can either cover the child or the parent.

According to the certified financial planners, ULIP is expensive in comparison to other instruments as it has higher premium investment, policy allocation charge and deductions of around ranges between 5%-7% (first year only).

Managing director and CEO of PNB MetLife, Tarun Chugh informed that they have a ULIP child plan and are planning to launch a unique traditional child plan in some time.

He added that life insurance plans are the most preferred ones because of the financial protection offered by them to a family and acts as a good mode of saving for child future education. He believes that insurance ensures corpus an individual has decided for their child’s future which would help him grow irrespective of their presence. 31-40 years is the major age bracket of parents investing into child plans as revealed by Mr. Chugh.

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