Best Child Plans : Benefits and Types

Updated: 11-01-2024 10:19:06 AM

A child is precious to its parents, and parents do everything to safeguard him or her from uncertain situations. Financial security is very important in the long run especially at the time of major events like higher education and marriage. Having a proper financial backup can largely support a child in his/her higher education and hence in making a fulfilling career. It is all necessary to have the best child plans as part of an insurance plan for a secured future of a child.

Many insurance agents claim that getting a term life insurance policy will help secure the future of their children. This is not completely true as term insurance ceases with the death of the insured. But in case of child insurance, the insurer continues to pay premium instead of the policyholder if he dies. This helps the beneficiaries in getting the benefits at the time of need without having to pay too much. Term insurance plans are cost-effective when it comes to premiums but considering the future security of children, child insurance plan is a better option.

Benefits of Purchasing Child Plan

Many benefits make child plans a viable option for the parents who want to make sure that the future of their child is financially secure. The valuable benefits of the child plans are the reason that more and more Indian parents are going for these plans. Some major advantages of these plans are:

•  There is an option to choose the rider policies according to the insurance needs of the policyholders. The rider plans maximize the coverage of a base plan and that too at nominal premiums. The extra security provided by the rider plans covers the loopholes in the base plan to a large extent. This further increases the coverage provision making the child more and more secure.
•  The structure of child policies by the insurers is made keeping in mind all types of needs of children while growing up. All major events that are associated with growing children are kept into consideration at the time of policy formation. These plans are surely costly as compared to term insurance but they cater to the major expenses involved in the upbringing of a child and in giving him or her a secure future.
•  The biggest advantage when it comes to child insurance is that it provides the options of customization in payout. The policyholder can select the events of payout to ensure financial backup in a critical situation. The payouts can be reserved for events like moving to higher education and wedding. This way the policyholders will not have to worry about the finances and focus on these major events of their child in better ways.

Explained: Some Child Plans 

If you are browsing for a suitable child insurance plan for your little one, you will come across numerous options. All these plans will claim to provide you with maximum benefits in the market. It is easy to be influenced by the claims of insurance agents and brokers, but what’s most important is to take the decision based on facts. Below listed are some of the best plans for child insurance in the country and their major terms:

Bajaj Allianz Young Assure

It is one of the best policies for child insurance in India. This is a plan with multiple benefits and fits the needs of Indian parents from all around the country. Significant features of the plan are:

•    The plan has a maximum maturity limit of 60 years, and the minimum age can vary from 18-50 years
•    There are three options of cash installments that one can choose from
•    If the policyholder is a woman, special offers are provided
•    The policyholder can avail tax benefits on this policy
•    The policy can be personalized by adding suitable riders to the plan to maximize the coverage
•    There is a provision of benefits in case of permanent total disability of policyholder due to an accident
•    The policy claims to ensure adequate financial backup for significant life events like wedding and                education etc.

Also Read: SBI Child Education Plan – SBI Mutual Fund

 Max Life Shiksha Plus Super

The significant features of this policy are listed as follows:

•    This policy can be purchased by individuals who are 21-50 years of age and the maximum maturity age     for the plan is 65 years
•    There are five different coverage options in this policy that can be chosen by the policyholder
•    The policy premium term and maturity term can be flexible and can be set as per your financial goals         and policy
•    The policy gives you the option to make partial withdrawals at the time of need
•    If the policyholder passes away the beneficiaries are paid a lump sum payout; also, there are benefits         like the benefit of family income
•    There is also the option of funding of benefit for the amount of premium
•    The policy also involved loyalty additions which are of much value to the policyholders
•    The plan also assures tax benefits to the policyholders
•    The maturity amount of this policy is as much as fund value

ICICI Pru Smart Kid Assure Plan

The major features in this child plan by ICICI are as follows:

•    The plan can be availed from the age of 20 to 54, and the maximum age of maturity for the policy is 64      years
•    The flexibility of premium payment is provided in the plan. The policyholder can choose whether to pay     the premium all at once or to pay during the policy tenure
•    The policyholder can access complete control over the choice of funds for investment
•    There are eight types of funds like the balanced funds, debt funds, and equity funds, etc.
•    The policyholder is allowed to change the funds involved anytime during the policy tenure
•    Once the policy has completed five years, the policyholder is permitted to make withdrawals if he/she       needs money
•    The insured can select the amount of coverage as per his/her requirements
•    There is an option for availing loyalty addition with the help of this plan

 HDFC Young Star Super Premium

The features of this policy are:

•    The maturity age of this policy is 75 years, and it can be purchased from the age of 30-60
•    If the insured individual, unfortunately, passes away, yearly payouts are to be paid to beneficiaries by         HDFC
•    The plans can be customized as per the insurance needs of the policyholder
•    There are two options to choose from regarding insurance coverage
•    This plan yet again provides control over the choice of investment funds of four types
•    The plan also gives the liberty to switch among the funds as and when the policyholders wish so
•    The maximum term of the plan is 20 years, and minimum tenure is 10 years
•    The policyholders do not have to go through any kind of medical tests
•    The fund value is paid to the beneficiaries when the policy gets matured
•    The policy supports taxation benefits
•    There is no maximum premium in this policy, but the minimum premium is INR 15,000

 Birla Sunlife Vision Star Plan

The significant features of Birla Sunlife Vision Star Plan are:

•    The maturity age of the policy is 75, and the age at which the policy can be purchased is from 18-55            years
•    There is a minimum assured sum of Rs 1 lakh
•    There is a provision of a death benefit to the nominee in case of policyholder’s demise
•    The accrued benefits will be provided at the maturity of the policy
•    In case of the death of the insured, the beneficiaries do not have to pay any premium
•    The option of taking a loan based on this policy is available, but the maximum credit that can be taken       is of the maximum surrender value
•    The premium can be paid monthly, quarterly, half-yearly or annually.
•    If the insured is not able to pay the premium for any unfortunate reasons, the plan will not discontinue     instead it will continue for a reduced paid up. The only condition for availing of this benefit is that the       premium should be paid for at least three years.
•    The policy is compatible with tax benefits

LIC Jeevan Ankur Plan 

This is the best LIC policy for the child, and its major benefits of the LIC Jeevan Ankur Plan are listed as follows:

•    The premium can be paid according to the choice of the insured; the available options are quarterly           payment, half-yearly payment, annual payment, and monthly payment
•    The loyalty addition and maturity benefits are both provided in the policy
•    There are options for choosing a rider policy for accident or critical illness
•    There is a guaranteed surrender value that is paid to the beneficiaries when the premium is                          surrendered. This surrender value is ensured for both regular premium policyholders and single                  premium policyholders.
•     In case the policyholder stops paying the premiums, it is possible to revive the amount within five              years of paying the last premium.

Post Office Child Plans 

Indian post offices have a wide reach all over the country, and they also provide insurance services. The reach of post offices is there even in the remote areas of the country and are hence reachable by parents all over India. The plans are also compatible with all socio-economic backgrounds, and the plans are different for rural areas and the rest of the areas. The major post office child plans are:

• Sukanya Samridhi Yojana (special insurance plan for a girl child)
• Bal Jeevan Beema

These plans are available for lower premium rates and offer a decent sum assured when the policy gets matured. The sum assured highly relies on the amount of premium paid by the insured as there is a wide difference between the minimum and maximum limit of the premium amount.

 Aviva Young Scholar Advantage Plan

This is a child education plan provided by Aviva India and is a very good option for securing your child’s future. Its features are listed below:

• The plan is limited to a term of 10 years to 25 years.
• In case of the policyholder’s demise, the beneficiaries are paid a lump sum amount.
• If the policyholder passes away, the future premiums of policy are waived off in this policy.
• The plan provides flexibility concerning the withdrawal of money at crucial times.

Reliance Child Plan  

The features of this insurance policy are listed below:

• There are assured periodic benefits to beneficiaries under this plan
• It helps the child set up his/her own business in the long run
• The plan assures benefits for the higher education of the child and is hence is a viable option as a child education plan also
• The plan involves life cover for the complete tenure of the policy
• At the time of maturity, the policy assures acquired bonuses and 25% of the assured sum 

Best child plans can vary based on individual needs, but the post office child plans are the best when it comes to availing maximum tax benefits. Many people prefer investments like mutual funds over insurance plans. If you compare insurance plans with mutual funds, these plans will always rank higher regarding security. This is so as the returns of the insurance policies can be quite rightly calculated but when it comes to mutual funds it is not possible. The major focus is to be laid upon the reliability of the return especially when t comes to your child’s future.

The financial goals of every individual are different from each other and therefore it is not easy to declare one of the plans mentioned above as the best. But there are certain aspects on which the goals related to ensuring your child’s future should be based. The major factors to be taken into consideration are a return on investment, safety and tax liabilities from the investment. The safety is quite evidently paramount among these factors which are followed by returns and then the tax benefits.