A child plan provides complete cover for a child. It offers insurance for the child should anything happen and caters to the future needs of child health and education. In addition, due to the rising inflation rate and escalating education rate, a child insurance plan has become necessary for parents. Now that we know the importance of a child insurance plan, the common question arises: What is the best Indian child insurance to invest in?
Given the wide range of child insurance plans available on the market, deciding which one will work out best can always be a drying task. Thus, we have shown below to help you know about the best child insurance plan:
Types of Child Insurance Plans in India:
- Traditional Endowment Plans: Provide guaranteed maturity benefits and children's life insurance coverage but may offer lower returns than unit-linked plans.
- Unit-Linked Insurance Plans (ULIPs): Combine insurance coverage with market-linked investments, potentially offering higher returns and carrying investment risks.
- Child Education Plans: Explicitly designed to fund your child's education milestones, with guaranteed payouts at predefined stages and act as a child education savings scheme.
- Term Insurance Plans with Riders: Offer pure life insurance protection at affordable premiums, often paired with riders for critical illness or child-specific benefits.
Benefits of Buying Child Insurance Plans
Here are the key benefits of purchasing child insurance plans for your kids:
- Financial security: this is among the best means to ensure that your child's future remains intact during eventualities. The life cover, maturity corpus, loyalty additions, and bonuses help to secure their goals.
- Building A Good Habit Of Saving: Since the child is inducted into the habit of saving through such a plan, it becomes possible to drill them into the habit of keeping regularly, the prospect of which could be of immense help in later life.
- Meeting Major Milestones: Maturity proceeds received under Child Plans can be utilised for significant milestones like higher education, career establishment, marriage, etc., without coming in the way of other life goals.
- Tax Benefits: One can avail of tax deductions up to ₹1.5 lakhs on the premium paid towards child plans under Section 80C. The maturity payout is also tax-free under Section 10(10D).
- Multiple Premium Payment Modes: Most child plans will offer the facility of paying the premium by the policyholder through various modes - yearly, half-yearly, quarterly, and monthly. In turn, this is flexibility in managing cash flows.
- Comprehensive Coverage: Most child plans offer comprehensive coverage, including critical illness rider, premium waiver, and accident benefits. Altogether, these items provide complete peace of mind.
- Grandparent Funding: Premium funding by grandparents in some of the plans thus reduces the burden on the parents. Loyalty additions also enhance the maturity corpus.
Child plans have unmatchable advantages when comprehensively covering your child's financial future.
Which is the Best Child Insurance Plan in India?
Some of India's best child insurance plans are listed below
#1. Bajaj Allianz Young Assurance
A top-quality insurance provider and undoubtedly the best plan for children in India, Bajaj Allianz offers various insurance plans to different people. Different plans are available for multiple purposes. If you want to start saving, one of the Bajaj Allianz savings plans would be a choice since it provides essential protection coverage and allows you to keep your money effectively. Usually, for a small premium payment, it is a participating plan. This plan will lay a practical foundation for your kid's future. Your kid's goals can be achieved with success with this best child plan in India.
Features
- The plan has a Guaranteed Maturity Benefit (GMB), Vested Bonus (VB), Guaranteed Additions (GA), Interim Bonus (IB), and Terminal Bonus. You can take any option for a cash instalment for your maturity benefit. You will get your first instalment after the policy matures.
- The death benefit is payable to the nominee on the policyholder's death if all premiums have been paid in full. This is the death benefit. This can be used to the level of the GMB or the sum assured, whichever is more.
- If the policyholder incurs permanent total disability due to an accident, the policy will get converted into a fully paid policy in the event of all unpaid premiums.
- Provides a minimum entry age of 18 and a maximum entry age of 50.
- The maximum majority age of this scheme is kept at 60 years.
- The scheme also provides for the higher assured sums for which a rebate is allowed.
- It offers a premium with policy term deposits.
- A guaranteed maturity is offered to the policyholder along with the guaranteed additions.
- This policy shall offer the policyholder the vested bonus and terminal bonus at the time of the policy's maturity.
- This policy shall also allow tax benefits per U/S 80C of the Income Tax Act.
#2. Bharti AXA Life Child Advantage Plan
Bharti AXA Life Insurance Company provides many insurance plans and categories. The company has a solution to every need, whether in the form of protection, savings, or retirement. The Child Advantage Plan by Bharti AXA Life has also been termed the best children's insurance plan.
It is a traditional child plan ensuring returns with participation in company profits through bonuses earned. In the Bharti Axa Life Child Advantage Plan, a non-linked participating plan, a customer can choose either money-back or endowment. Additionally, this plan offers an option for a built-in premium waiver benefit.
Features
- This will guarantee payouts for your child's educational needs in the last five years before maturity. This will provide you with a guaranteed payout from Maturity for your child's higher education and career needs.
- A guaranteed lump sum amount will be paid to your family under the Endowment Plan at Maturity to help realise your child's dreams if the policy is still in force.
- It comes with an inbuilt Premium Waiver to meet your child's needs. In the case of the parent's death (Life Insured), the policy continues with the benefits and without paying future premiums.
- This policy provides flexibility in selecting the different policy tenures.
- The scheme has a maximum maturity age of 76 years.
- There are various terms ranging between 11 years and 21 years. You can choose the option as per the age of the child.
#3. HDFC SL YoungStar Super Premium
The unit-linked HDFC SL YoungStar Super Premium Plan aims to protect the child's future by accelerating growth and providing life insurance coverage. A unit-linked insurance plan called the HDFC SL YoungStar Super Premium Plan aids in saving money for use at various stages of a child's life, including higher education, marriage, and more, and thus, is also the best policy for child insurance.
Features
- In the HDFC SL YoungStar Super Premium Plan, the policyholder can select four fund options to invest in.
- The customer also gets flexible premium payment.
- The plan can be customised as per the need and suitability of the customer.
- Tax benefits can be availed U/S 80C of the Income Tax Act.
- Sum Assured: The Sum assured at the policy's inception will be an amount that the life assured can choose in multiples based on Age. Less than 45, 10 x over 45, and 7 x the annual premium. The options are Life Option and Life & Health Option.
- Maximum premiums are without a limit, but a minimum premium of Rs. 15,000 has to be paid. The premiums have to be paid annually.
- Ten years is the minimum, and 20 years is the maximum. The 11 to 14-year period is not available in between.
- Paid to your child as the Sum Assured (Beneficiary) in the sad event of your death or permanent illness. The premiums are waived for your family.
Under this option, the sum assured on Critical Illness and Death Benefit ceases immediately, and your policy's regular premiums will be fully paid. You will have the following benefits:
- The sum assured to be paid to the beneficiary on maturity
- Lump-sum payout at age 99 years
- Flexibility to choose the sum assured according to the protection you want
- Choose the funds to invest in based on your risk and return preferences
#4. ICICI Prudential Smart Kid Regular Premium Plan
This traditional participating endowment plan that benefits the child, the ICICI Prudential Smart Kid Regular Premium Plan, ensures the parent's life. Suppose the parent passes away during the policy's term. In that case, the nominee will receive the Sum Assured to cover any immediate financial needs, and the insurer will waive future premium payments so that the Maturity Benefit is paid when it is due.
Features
- The next plan also comprises two different premium payout options.
- The maturity age for this scheme falls in the bracket of 64 years.
- The minimum and maximum age at entry in the policy shall be from 10 to 25 years.
- In all other contingencies, this plan provides for the Maturity Benefit as per the option chosen on payment of all due premiums.
- Two more rider benefits are available.
- This policy pays out a Vested Bonus and Guaranteed Additions of 3.5% on the Sum Assured for the first four years.
- Deduction regarding premiums paid towards a life insurance policy is allowed up to Rs. 1,50,000 from the total taxable income under section 80C.
LIC New Children's Money Back Plan
The LIC has a new plan that it has designed that is exclusive and titled the New Children's Money Back Plan—probably the new-age gift to provide for the child's needs at every stage of life, be it for education, marriage, or any other requirement.
This participating non-linked money-back scheme also provides survival benefits to children apart from risk coverage. Apart from risk coverage, this policy also includes survival benefits. This is one of the best child plans in India.
Features
- Maturity benefit: Sum assured plus all the bonuses the policy accrued during the term.
- Survival benefit: 20% of the basic sum payable on the life assured attaining a specified age.
- The amount assured on death along with bonus, if any, accruing till then will be paid in the event of death of the life assured during the contract term.
- Policyholders are eligible to share in the profits of LIC in the form of bonuses.
Conclusion
Securing your child's financial future requires prudent planning. You can seamlessly meet their lifelong needs by purchasing adequate life coverage and creating a savings corpus. Child insurance plans offer a disciplined and systematic approach to building funds through regular premiums over the long term. The loyalty additions, bonuses, and comprehensive riders make them a multifaceted product. Choosing the right child plan based on your income, child's age, and other vital parameters is essential to maximise benefits. Opting for established insurers with good service records also assures timely payouts. Investing in the best child insurance policy will give every parent long-term financial security and peace of mind.