ULIPs and mutual funds are two popular yet distinct investment avenues, each coming with its unique set of benefits and drawbacks. Know which one is better for your individual needs and preferences.
Every parent aspires to provide the best for their child's future. Financial planning plays a crucial role in achieving that goal. In India, child plans have emerged as remarkable instruments to secure a child's future in a holistic manner. Going beyond mere savings and investments, these plans offer a comprehensive approach tailored specifically to children's needs.
Child plans in India provide a unique combination of financial protection and growth potential, ensuring that parents can safeguard their child's dreams and aspirations. These plans offer flexibility in terms of premium payments, investment options, and policy tenures, all while allowing parents to align them with their specific financial circumstances and goals. On top of that, child plans often include additional features such as maturity benefits, education support, and waiver of premium in case of the parent's unfortunate demise.
In this article, we will explore the diverse range of child plans available in India and uncover their key features, benefits, and points of consideration for parents. We will also delve into the importance of starting early and understanding the different types of child plans to make informed decisions for securing a bright and prosperous future for your beloved children.
With a rise in education costs, especially tuition fees, it has become pretty important to buy a child education plan for your young ones so that they can fulfil their dreams without expenses being a hurdle. Here are some major reasons to invest in your child’s future goals with this type of plan -
The following are the key features of child education plans in India -
Here are some benefits of investing in child plans in India -
Most insurance providers in the country provide child plans to secure your little one’s future. Moreover, there are different types of child plans in India that can be customised as per your needs and priorities.
Discussed below are the major types of child education plans in India -
Tabled below are some of the best child plans in India -
|Plan Name||Entry Age of Parent||Maximum Maturity Age of Parent||Minimum Sum Assured|
|AEGON Life Rising Star Insurance Plan||18 to 48 years||65 years||10x the regularly paid yearly premium|
|Bajaj Allianz Young Assure||18 to 50 years||60 years||10 x the yearly premium|
|Birla Sun Life Insurance Vision Star Plus||18 to 55 years||75 years||INR 1,00,00|
|HDFC SL YoungStar Super Premium||18 to 65 years||75 years||10 x the yearly premium|
|IndiaFirst Happy India Plan||18 to 50 years||60 years||10x or 7x of the yearly premium (whichever is higher)|
|ICICI Pru SmartKid Solution||20 to 54 years||64 years||INR 45,000|
|Max Life Shiksha Plus Super||21 to 50 years||65 years||INR 2,50,000|
|Pramerica Life Idols Gold Plan||18 to 50 years||65 years||INR 1,50,000|
|SBI Life - Smart Scholar||18 to 57 years||65 years||20 or 7 times the annual premium paid (in case of regular premium payment) or 1.25 times in case of single premium payment|
|Bharti AXA Life Child Advantage Plan||18 to 55 years||76 years||INR 25,000|
|Aviva Young Scholar Secure||21 to 50 years||71 years||10 times the annual premium paid|
|Edelweiss Tokio Life EduSave||18 to 45 years||60 years||INR 2,25,000|
|PNB MetLife College Plan||20 to 45 years||69 years||INR 2,12,040|
|Reliance Life Child Plan||20 to 60 years||70 years||Equal to the Policy|
|TATA AIA Life Insurance Super Achiever||25 to 50 years||70 years||10 times the yearly premium paid|
|Wealthsurance Future Star Insurance Plan||18 to 54 years||64 years||10 times or 7 times the yearly premium paid (whichever is higher)|
|SBI Life - Smart Champ Insurance||18 to 57 years||65 years||20 times or 7 times the annual premium paid (whichever is higher)|
|Shriram Life New Shri Vidya||18 to 50 years||70 years||INR 1,00,000|
|SUD Life Aashirvad||18 to 50 years||70 years||INR 4,00,000|
|Smart Future Income Plan||18 to 55 years||80 years||100 x chosen monthly income|
Listed below are the types of documents required to apply for a child education plan in India -
Child plans in India are designed with the objective of helping your child realise their dreams. To initiate the process, you need to make a decision between purchasing a Unit-Linked Insurance Plan (ULIP) or an Endowment Plan.
With a ULIP, you have the freedom to choose where your money gets invested. On the other hand, an endowment plan involves the insurance provider investing the amount in debt instruments.
When purchasing the policy, you must clearly specify whether you prefer a lump sum payment or regular monthly or annual payments. Once you finalise the details and pay the premium, the child plan becomes active.
Consider a scenario where a policyholder meets with a fatal accident. In such an unfortunate event, all future premiums will be waived off and the provider will annually pay the policyholder’s child a portion of the maturity amount until the plan matures. Upon maturity, the child will also receive the promised lump sum amount.
Here are some conditions to consider when buying the best child plan in India -
To secure the future of one’s child, it is crucial to obtain an appropriate level of life insurance coverage. This way, one can ensure the well-being of their children even if they are no longer present.
It is advisable to engage the expertise of a financial advisor and planner soon after determining the suitable insurance type. Based on their guidance, you can get a child plan that aligns with your specific needs and circumstances.
By being proactive in your approach, you can provide your child with a stable and secure foundation regardless of any unforeseen circumstances.
Make sure that the duration of the child education plan in India aligns with your specific requirements. Opting for an insufficient timeframe may undermine the purpose of term insurance, while an excessively long period will result in higher-than-needed premiums. For this reason, it is crucial to strike a balance and choose a policy duration that optimally meets your needs and financial consideration.
It is essential to make separate provisions for each child to ensure that their specific requirements are met. This approach prevents the scenario where you excessively withdraw funds from your shared savings for the older child, which could jeopardise the financial security of your younger child if the savings fall short.
By creating distinct provisions, you can better safeguard the future well-being of each child and avoid potential risks that may arise from an unequal distribution of resources.
A significant number of individuals get an insurance policy for their children's future without verifying the inclusion of a crucial add-on.
The premium waiver add-on ensures the continuity of the policy even if the parent passes away so that their child receives the funds when they require them the most. It is essential to thoroughly check for this provision before purchasing an insurance policy to safeguard your child's financial well-being.
Unforeseen circumstances can arise at any moment and necessitate the availability of financial support for a child's immediate cash needs.
The inclusion of partial withdrawals in the top child education plans enables the withdrawal of partial amounts to address unexpected expenses. This provision safeguards against emergencies causing financial instability for the family or hindering the child's education and aspirations.
By utilising partial withdrawals, the original financial planning remains undisturbed, eliminating the need to rely solely on a regular income to fulfil these requirements. Thus, this feature ensures a stable financial situation and safeguards the child's educational journey and dreams.
To know more about the best child plans in India, go through the following FAQ section.
Ans: It is indeed possible to acquire a child plan for a 10-year-old to make sure that funds are available for their future needs and expenses when the policy matures. Moreover, in case of any mishap, the child would receive the full sum assured. Nonetheless, initiating the plan at an earlier stage can prove advantageous for the child. Financial experts strongly recommend investing in a child plan right from birth to maximise the potential benefits and secure a prosperous future for the child.
Ans: After a minimum of 5 years from the policy's commencement and prior to its maturity, individuals have the flexibility to make a complete withdrawal of the total sum. Some child plans also offer the option of partial withdrawals that can be utilised for addressing your child's financial requirements and ensuring liquidity whenever necessary.
Ans: The premium amount will be determined by various factors including the policy term, age of the insured, sum assured, and other relevant considerations.
Ans: For parents with children aged from 0 to 15 years, it is crucial to invest in a child plan. Additionally, individuals seeking to establish a financial corpus to secure their child's education expenses and combat inflation through systematic investments should consider choosing a child insurance plan.
Ans: When it comes to securing your child's future, child insurance plans offer the freedom to invest according to your child's educational requirements, your present financial situation, and other financial objectives.
These plans generally provide a life cover that is approximately 10 times the annual premium. Additionally, they allow partial withdrawals when necessary and allow individuals to benefit from tax advantages on the premiums paid.