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Child Insurance Plan All You Need To Know Research Team | Posted On Wednesday, February 27,2019, 06:16 PM

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Child Insurance Plan All You Need To Know



For every parent, the child is their biggest and most important responsibility. Parents do everything they can to give children a better life. Child insurance plans are investment cum insurance products that offer financial protection to your children when you are not around. Child insurance plans offer death cover and ensure that you save enough to cover your child’s key milestones including marriage and higher education.

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Child Insurance Plan: All You Need To Know

Importance of Child Plan

Along with the extreme joy of being a parent, you get an additional responsibility of providing your children with a quality lifestyle. Raising children needs a good amount of money. You would have to sacrifice on a lot of things to make your children happy and satisfied. What if something happens to you? Who will provide for your children when you are not around? Do You Really Need A Child Insurance Plan? Certainly you would be feeling chills down your spine by reading this!

Child insurance plans offer financial protection to your children when you are no more. Child insurance plans are a mixture of investment and insurance. A child insurance plan allows you to plan for your children’s key milestones like higher education, marriage and so on.

Average cost of an MBA from a top university / college is roughly around Rs 5 to 8 lakhs per year. With such high cost and inflation, it is only wise to cover your children under a child insurance plan to secure their future.

Types Of Child Insurance Plans

Following are the types of child insurance plans:

1) Unit-linked Child Plans:

Unit Linked Insurance Plans, ULIPs, is a mix of insurance and investment. ULIPs allow you to plan for various life events of your children.

2) Money back plans and child insurance:

Money back plans can be used as investment instruments in child insurance. The plus point of a traditional money back policy is that it allows you to plan your future expenses on the basis of regular payouts. Further, you get a lump sum at the time of maturity as a part of money back plan. However, the returns earned on a money back plan are usually less, and flexibility in terms of withdrawing your investment is limited.

3) Endowment plans for child policy:

An endowment plan combines both insurance and investment, in which you get insurance cover over a specific period of time and also gain from the guaranteed maturity amount at the end of the term of the policy. With a mixture of investment and insurance, you can plan your child’s major milestones.

Features Of Child Insurance Plans

Following are the features of child insurance plans:

1) Flexibility in premium payment frequencies:

An ideal child plan offers flexibility in payment of premiums. Usually, child insurance policy  offer annual or half yearly or quarterly or monthly premiums payment option. Therefore, opt for those child insurance plans that offer you the flexibility in choosing the frequency of premiums payment as per your convenience.

2) Choice of the appropriate policy tenure:

The policy term of a child insurance plan ranges from 5 to 25 years. Choose that child policy that offers coverage until all your goals for children are achieved.  Ideal child insurance must be flexible in offering right policy term as per insured’s choice. You must remember that longer the tenure, higher the chances of policy fulfilling its investment objectives and offering good benefits.

3) Premium waiver benefit:

A child policy must continue even after the death of the policyholder. Premium waiver offers waiver on the future premiums on unfortunate death of the policyholder within the term of the policy. Insurer pays out a lump sum called death benefits to the child in this case and the insurer continues to pay premiums. At maturity there’s a second payout. Having this waiver is important in a child insurance plan.

4) Partial withdrawal clause:

A financial emergency can arise any time and befall anyone at the unlikeliest of times. The child insurance policy must come with a partial withdrawal clause that allows funds to be withdrawn to cover emergencies. Partial withdrawal facility helps in safeguarding the child's financial future.

SEE ALSO:  Features Of Child Insurance Plans

Benefits Of Child Insurance Plans

Below mentioned are the benefits of child insurance plan:

·Maturity benefits to cover expenses of higher education.

·Avoids capital erosion.

·Option to avail various riders.

·Partial withdrawals can enhance the talent of your children.

Child Plan Eligibility Criteria

All biological parents are eligible to avail child insurance.

However there are various entry age, maturity age, minimum annual premiums and minimum sum assured criteria taken in to consideration by various insurers offering child plans.

SEE ALSO:  Benefits Of Child Insurance Plans

What Are The Best Child Insurance Plan In India 2019

Below mentioned is the best child insurance plan in India 2019:

  • Reliance Child Plan
  • LIC Jeevan Ankur
  • Aviva Young Scholar Advantage Plan
  • Birla Sun Life Insurance Vision Star Plan
  • ICICI Pru Smart kid Assure Plan
  • HDFC SL YoungStar Super Premium
  • Bajaj Allianz Young Assure
  • Max Life Shiksha Plus Super
  • HDFC Life Young Star Udaan
  • ABSLI Vision Star Plan
  • SBI Life Smart Champ Insurance Plan
  • Edelweiss Tokio Life Edusave Plan
  • PNB MetLife College Plan (Child Education Plan)

What Is The Child Education Plan?

Child education plans offer comprehensive benefit of life insurance cover with maturity benefit. It helps in meeting the expenses of your child's future when you are not around. This plan can also be used as a collateral / security for an education loan.

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Q. Can I Add My Child To My Health Insurance?

A. You can add your child to your existing health insurance policy by getting in touch with the insurer. Or you can start a new health insurance plan.

Q. Who Is Beneficiary In Child Plan?

A. Child is the beneficiary or the nominee in child plan.

Q. How Does A Child Plan Work?

A. Child insurance plans are investment cum insurance schemes that offer financial protection to your children when you are not around. A child insurance plan offers death cover and ensures that you save enough to cover your child’s key milestones like marriage and higher education.

Q. Can I Buy A Child Plan For My 15-Year-Old?

A.  Yes, you are allowed to buy child insurance policy for your 15 year old kid. However, the maturity amount and the sum assured would be low as a child insurance plan generally matures when the child turns 18, allowing only 3 years of premium payments.

Q. How Much Does It Cost To Insure A Child?

A. Cost of a child insurance directly depends on the term, type of policy availed and riders opted under the policy.

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