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Best Child Insurance Plans in India
Every parent loves his or her child and a responsible set of parents understand their commitment towards child's future plans. Selecting a best child plan in India is a huge responsibility for every responsible parent. One needs to ensure that a best child plan is selected to ensure safeguarding of your child's future.
By visiting our insurance portal for your child's insurance plans in India, you have demonstrated that you care deeply about his or her future. We are pleased that we can help understand what exactly a Child Plan is for your children and decide in choosing the best child plan in India.
Why buy a Child Plan?
Child plans help your family with the lump sum amount in case of your uncertain death, this way your child's future plans do not take a step back be it their education or wedding. If you have an idea in terms of when you will require funds for your child's education or marriage, then you can buy a child plan which matures when you require funds for the purpose.
In short, Child Plan is an insurance cum investment plan that serves the following purposes -
- Financially secures your children's future
- Finances higher education and marriage for your children.
The best Child Plan protects the future of your children in case of your unfortunate demise.
Best Child Education Plans in India
Child Education Plan gives you multiple benefits such as life cover, building a pool of resources for the child's future needs. If you invest in an Education Plan, it will help you save money for higher education of your child. Our portal has many Child Education plans that you can compare and select.
Key Elements of a Child Plan
Following are some of the key elements of a Child Plan:
Premium Amount- Driven by sum assured and maturity amount chosen
Mode of Premium Payment-
- Regular premium- the premium is paid on a periodic basis (yearly, half yearly or quarterly).
- Single premium- The premium is paid as a single payment.
Sum Assured- The guiding principal to follow is to ensure that the Sum Assured is around 10 times your present income.
Policy Term- Policy Term for a Child Plan is the time you think your child needs to become independent. If your child is 8 years old, your policy term should be a minimum of 10 years.
Maturity Amount- It is important to factor inflation and then arrive at an appropriate maturity amount that will help you meet needs of your child at the end of Policy Term. Maturity Amount can be received as a lump sum or as a money back feature periodically (say every 5 years).
Waiver of Premium- This is a standard rider in Child Plans. However, if this is not a feature of the policy, it is important to get it included. In case of death of the insured, this feature enables the policy to continue by passing off the financial burden to pay the rest of the premium to the insurer.
Partial Withdrawals- Some parents prefer withdrawing chunks of Maturity Amount at pre-fixed intervals instead of getting a lump sum amount at one go. The intention to opt for this feature is to meet the financial needs of your Child at important stages of his or her life.
Riders and Benefits-These are the add-ons that enhances your coverage for higher level of protection
- Premium Waiver Benefit
- Accidental Death and Disability Benefit
- Critical Illness Rider Benefit
Types of Child Insurance Plans?
- Traditional Plans: Traditional plan is one in which the amount of payout is guaranteed. The investments are made in safe and low yielding products. The return focus is on stability and predictability.
- ULIPs: The investments are traditionally into equity markets and the return focus is on growth. Chances of returns over a longer period of time is much higher. The policyholder can even choose to invest in debt instruments making ULIP plans similar to the traditional plans. The flexibility is completely in the hands of the policyholder and one can switch between different investment funds.
How do Child Policies work?
In a Child Policy, the policyholder is the parent and the child is the beneficiary (just like a nominee). Some traditional policies also give risk cover for the child. Risk cover in such policies start after completion of seven years of age. One can choose a sum assured i.e. the lump sum amount, which is received, in case of untimely death. Child plans are available both as traditional plans as well as ULIPs.
On death of the parent during the term of the policy, the sum assured is paid to the beneficiary, so that the family can continue to meet the needs of the Child for education, marriage and other needs. The future premium payment gets waived, so that the child or his family does not have to pay the premium for the entire policy term. Future maturity or other benefits are paid as it is.
In certain ULIPs the insurance company pays the premium on behalf of the policyholder till the policy's maturity. The fund value at the end is paid to the child on the maturity of the policy, so that the lump sum amount can be utilized for the child's future needs like higher education or marriage. Now a days, few insurance companies provide double benefit, where the sum assured is paid on death as well as at the end of policy term (i.e. maturity).