Child Insurance

Updated on: Jan 11th, 2022 - 12:13:49 PM

5 min read

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As a parent, your kids are the most important part of your lives. Investing and saving for your children’s future is considered one of the most important financial goals by parents in India in their overall financial planning. Child insurance plans make sure all the future needs of your child are met in your absence.

Importance of a child insurance plan

Child insurance plans are important because they ensure that your child gets the best in his/her future even in your absence. They are designed in such a way that inbuilt premium waiver rider ensures that the plan continues even after the parent’s demise and the benefits accrue and when they are payable, they can be utilized for child’s future.

It is one of the best way to save by making regular investments for your child’s future needs like higher education which can be costly. Also, partial withdrawal facility is provided under these plans whenever needed. Along with this, you can also avail tax benefits for the premium paid.  

Types of Child insurance plans

1.Child ULIPs (Unit Linked Insurance Plans): In this type of plan, the premium paid by an insurer flows into a collective pool of funds that is invested both in debt and equity instruments. They carry risk with them which gets even out if you are planning for longer term. The potential return in this plan is high as it is a market linked product. This type of plan is ideal for long term policy (more than 10 years).

2.Child Endowment Plans: In this type of plan, the premium paid by an insurer flows into a collective pool of funds that is invested only in debt products. The potential returns are not so high. This type of plan is ideal for short term policy (less than 10 years).  

Documents required to buy a child insurance plan

Generally, all the insurance companies ask for the following documents:
1.  Age proof
2. Address proof
3. Identity proof
4. Income proof
5. Duly filled proposal form

Choosing the right child insurance plan

In most of the cases, parents start planning for their child’s future quite late. To get the maximum benefits of insurance plans, it is recommended to start planning for your child’s future in his/her formative years to ensure that sufficient funds are available at the time when you child is ready to embark on career path. There is no guide to choose a right insurance plan. However, if chosen wisely, it can become a long-term asset to manage the future of your child.

Tips for you to choose the right insurance plan

1.Know your goals: Planning is the first step for investment. You should know how much amount you will require for your child’s education, marriage etc. The other important factor that should be considered is expected inflation rate and its effect on your investment. Therefore, you should advise a good financial planner and then choose a right insurance plan.

2.Invest in child plan that offer premium waiver benefits: What is very important to have in a children’s insurance plan is the waiver of premium rider available. On the death of a parent, insurance company waives all future premiums and continues funding the policy and ensures that the maturity benefits that was set for the certain age remain intact.

3.Understanding the product and cost involved correctly: Before investing, you need to understand the product brochure correctly. Insurance companies levy various charges that needs to be paid by the customer. Therefore, you need to pick the most suitable insurance company after comparing all the benefits offered.

Various Child Insurance Plans offered

Following is the list of certain child insurance plans offered:

1.Bajaj Allianz Young Assure
2.Birla Sun Life Insurance Vision Star Plus
3.Max Life Shiksha Life Super
4.ICICI Pru Smart Kid Assure Plan
5.MetLife Smart Child Plan
6.Bharti AXA Life Child Advantage Plan
7.HDFC SL YoungStar Super Premium 8.SBI Life Smart champ Insurance Plan  

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