Child Plan

For every parent, their child is the top most priority. The upbringing of a child requires excellent financial planning and the sooner one begins it, the better. That is where a CHILD PLAN comes in picture. It is the best financial plan, investment plan and the most suitable policy for your child as it ensures continued education and a secure future. A child future plan is designed to meet your child's future financial needs. Child Insurance Plan is the right way to ensure that you have a safe future for your child, which offers strong financial security for your child’s future in your absence. Child insurance plan is an endowment plan which offers both death and maturity benefits. For instance, if your child is 3 years old and you plan to provide him higher studies after say, 15 years which costs Rs. 30 lakh today, then you can imagine how much would it cost after 15 years. Therefore, it becomes necessary to invest for your child today in order to have funds available at the time when the actual need arise.

Advantages of Child Insurance Plans

The major benefits that you will get after buying a child insurance plan is mentioned below: *Partial Withdrawals
Few insurance company provides child plans under which you have the option to make partial withdrawals.
*Maturity Benefit:
At the time of maturity the policyholder receive sum assured amount and bonus is paid as per the insurance company. If in case early death of policyholder, the future premium is waived off and the child will get all the benefits of the policy.
*Flexibility to choose:
Life insurance for children provides you the flexibility to choose according to your economic status and superficial monetary goals. The rate of premium can also be settled as per your interest.
*Tax benefit:
Yes, child policy in India provides tax benefit that can be availed on maturity or death claim profits under Section 10 (10D) and assumption from income for the expenses of premium under Sec. 80(C). Also, the maturity amount on child policy is a tax-free income.
*Loan Facility
Some child plans are basically an endowment plans thus it offers loan against your policy once the policy has acquired surrender value. The loan amount ranges between 80% - 90% of the surrender value with applicable interest rate by the insurer.

Importance of Child Plan

If you opt to choose one or more riders, the premium amount for the plan will increase. As an additional benefit comes at an additional cost.
*Multiple needs fulfilled:
Child plan fulfilled all your future needs of your child whether it’s education, marriage or business
You have the provision of liquidizing your plan through partial withdrawals.
*Tax Exemption:
Tax deduction for the premium you pay under Section 80C and any maturity income from the plan is tax-free under Section 10 (10) D of the Income Tax Act.
Child plans ensure your child’s future needs and allow you to plan in a better way to stabilize your future financially.


*What is a child plan?
Child plan is a unique way to save for your child future and to build a corpus for child education and marriage. Child plan is a type of insurance cum investment that helps to secure your child's future. If in case the insured dies, life coverage is given and if he survives, child gets surviving benefits.
*Right time to buy a child plan?
Child plan can be taken as soon as the child comes to the world i.e. from day 1 a child can be insured.
*What is the unique feature of child plan ?
The unique feature of child plan is that in case of uncertain death of proposer the amount if paid to the child (or appointee) and the future premium is waived off. The insurance company bears the future premium cost. The policy don’t get lapse in case of death and the child gets maturity amount at the end of policy term. There is no other insurance plan which has this unique feature.
*What are the features of a child plan?
Flexibility to choose the policy term which can be anywhere between 5-25 years. You can buy child plans which suits your pocket. You are allowed to choose any mode of premium payment- monthly, quarterly or yearly instalments. Partial withdrawal benefit is available
*What are the factors need to keep in mind while taking child plans?
You should pay attention towards following factors-
The time when the requirement of funds will arise, which in most cases is when your child attains 18 years.
The amount you think is sufficient enough to meet education and marriage costs
While computing the amount, take into account the current inflation rate. A typical MBA program from a reputed business school which costs around Rs 6 lakh today will become threefold costlier from 10 years now.
*What is the difference between beneficiary and nominee?
Beneficiary is a person who is entitled to get all benefits from the policy, including bonus, death benefits, etc., irrespective of the fact that whether the policyholder is alive or not. However, a nominee gets only death benefit.
*Do I get any tax benefits?
Yes, as per section 80C of the income tax act, the premiums paid for child plans are deductible from your total income thus lowering your taxable income. As per section 10(10D) of the income tax act, the maturity amount is a tax free income.
*Who is beneficiary? Why it is important to have a beneficiary?
A beneficiary is a person or entity entitled to receive claim amount in case if the policyholder dies due to uncertain situation. A proper nomination is required to ensure that your loved ones get all benefits of a policy without any hassles.
*Documents Required ?
Latest Photograph/s of applicant/s, Relationship Document, Identity Proof, Proof of Communication Address, Cheque, Proof of Date of Birth of the minor
*Who is appointee?
In case of minor child, only parents and grandparents are permitted to be appointee. An appointee can sign the form in case of a minor child.

"Successful Investing takes time, discipline and patience. No matter how great the talent or effort, some things just take time: You can’t produce a baby in one month by getting nine women pregnant."

By Warren Buffett

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Disclaimer: Insurance is the subject matter of solicitation. Mutual fund investments are subject to market risks. Please read all the scheme related documents carefully before investing.