Child Plan - Definition/ How It Works
What is a Child Plan?
For every parent, their child is the top most priority. The upbringing of a child requires excellent financial planning and the sooner one begins it, the better.
That is where a CHILD PLAN comes in picture.
It is the best financial plan, investment plan and the most suitable policy for your child as it ensures continued education and a secure future. It makes sure that the child receives all financial aid he requires for an overall development in all the years of growth.
Here is how it works:
- Child plan serves a double purpose of not only being an insurance product, but also an investment tool that provides financial security at crucial stages of a child’s life.
- A parent buys this plan with the child being the nominee. The insurance component ensures that the nominee (the child) receives substantial amount of money in case a mishap occurs with the insured.
- On the other hand, the investment component helps in building a substantial amount so that funds are made available to the child at regular intervals to be used for his multiple needs including education, marriage etc.
- The plan assures of substantial returns, irrespective of the fact whether the insured passes away during the term of the plan or outlives the term.
- With guaranteed financial stability, the parents can focus on other aspects of their child’s development.
For a child, a well thought of Child Plan is the best gift from his parents that’ll make sure that he achieves all his dreams.
At easypolicy.com you can choose the best suited Child Plan, today!
Eligibility Criteria To Buy Child Plans
If you are a parent legally or biologically, you are eligible to buy child plans!
However there are different entry age, maturity age, minimum annual premium and minimum sum assured criteria taken in consideration by different insurance providers, offering child plans.
ICICI Pru-Smart Kid Assure Plan comes with entry age of 20-60 years and maturity age of 75 years. The minimum premium required is INR 15,000/- and minimum sum assured is 5 times the annual premium you decide to pay.
Max Life Shiksha Life Super Plan has an entry age of 21-50 years, maturity age of 65 years. You will have to pay a minimum premium of INR 25,000/- and your minimum sum assured will be INR 50,000/-.
HDFC SL YoungStar Super Premium can be bought between 30-60 years with a maturity age of 75 years. INR 24,000/- is the minimum premium that you have to pay and your minimum sum assured is subject to underwriting.
Birla Sun Life Insurance Vision Star Plus comes with an entry age of 18-55 years and a maturity age of 75 years. This also has no stipulation of minimum annual premium. There is a fixed value of minimum sum assured which is INR 1,00,000/-.
Aegon Life Educare Advantage Insurance Plan stipulates an entry age of 20-60 years and it matures at maximum 75 years. There is lower limit to premium payment and minimum sum assured is INR 1,00,000/-.
Metlife Smart Child Plan is a plan that you can buy between 18-55 years. There is no maturity age associated to this plan. Minimum premium value is INR 18,000/-. Sum assured minimum is 10 times the value of annual premium.
Bharti AXA Life Child Advantage Plan has an entry age of 18-55 years. Maturity age of 65 years. There is no minimum premium value and minimum sum assured is INR 25,000/-.
Exide Life MeraAshirwaad Plan gives you an entry age of 21-50 years, maturity age of 65 years with no minimum premium value and INR 3.5 Lakhs as minimum sum assured value.
SBI Life Smart Champ Insurance Plan can be purchased within 21-50 years and it matures maximum at 70 years. You need to pay a minimum premium of INR 6,000/- and your minimum sum assured will be INR 1,00,000/-
Edelweiss Tokio Life Edu Save Plan should be bought between 18-45 years and it matures at 60 years. You will have to pay a minimum premium of INR 6,968/- and you will be assured for a sum of 2,25,000/-
Bajaj Allianz Young Assure Plan can be bought for your child anytime between 18-50 years with maximum maturity age of 60 years. There is no stipulation for minimum annual premium and your minimum sum assured will be 10 times the annual premium value you choose.
With ample information in hand, buy a suitable child plan now, and secure your child's future!
Key Advantages And Features
Child Plans offer a bunch of advantages and features to secure the life and future of your child.
Here is a comprehensive list of all that your receive through a well-thought child plan.
There is a difference between life assurance and life insurance. Life insurance is only about covering the death risks, but life assurance involves a component of investment as well apart from covering for death. A child plan can offer you both the benefits depending upon the individual needs and you can select a plan accordingly.
This is the period for which you’ll have to pay the premium. It varies from insurer to insurer and depends on the age of the child, but the average policy term offered is between 5 years to 20 years. Take in consideration the time when your child will be self-dependant and buy a policy accordingly.
Minimum Sum Assured
There are various options available. Some plans offer a minimum sum assured in the multiples of annual premiums that an individual decides to pay. For example, the sum assured could be 5 times or 10 times of 7 times of the annual premiums. In other cases, it starts from a minimum of Rs. 1lakh on an average.
Instead of waiting for the policy to mature and draw the benefits, Child Plans come with a an important feature of partial withdrawals from the sum assured, as and when there is a need for expenses related to child growth and development, especially at important milestones in child's life.
The child will be paid death benefits if the insured dies during the term of the plan and the future premiums will be paid off. This way the child gets paid twice: once at the time of death and secondly at the time of maturity of the plan.
Critical Illness Rider
This add-on cover comes in handy in the unfortunate circumstances of child suffering from severe ailment. Immediate withdrawal for medical expenses is allowed, without having to wait for funds arrangements.
Premium Waiver Benefit Rider
This is one of the most important benefits available with a child plan. Under this benefit, in case the insured passes away during the term of the plan, the nominee (the child) will not be under any liability to pay the remaining premiums to avail the benefits of the child plan. The future premiums will be waived off and paid by the insurance company. The child will be paid the sum assured at the time of the death of the insured, the plan will remain active and the child will be paid fund value at the time of the maturity of the plan. This feature makes a child plan stand out from any other insurance plan. This can either be part of an insurance policy or can be added as a rider by paying a bit of an extra premium.
Maximum Sum Assured
As per the industry average, there is no limit set on the maximum sum assured that an insured can buy. Certain plans keep an upper limit of Rs. 1crore and some others have no upper limit at all.
If you have any questions related to Child Plans and features, you can reach out to us via mail or online chat. Easypolicy, your best insurance advisor is here to make you insurance shopping informed and easy!
Benefits of A Child Plan
A child plan is a dual purpose scheme to secure your child's future. It takes care of your child's needs in your absence and it also brings substantial amount, time to time, to meet various milestones in your child's life.
At Easypolicy we are committed to give you ample knowledge about all insurance and investment products.
Thus, here are the prominent benefits of a Child Plan
Instrument For Child's Education
Take it as the most basic, yet most effective benefit. Even minimum premium payment helps you to secure significant returns for your child's education, as high as 10 times the paid premium. For example, you buy a policy with a premium payment of INR 12,000/-. You become eligible to redeem INR 1,20,000/- at the time of need, when you may want to pay college fee, higher education fee or overseas education.
Aid For Child's Medical Expenses
Child plans have a major benefit that they come with a provision of partial withdrawal of a lump sum amount, even if the policy has not reached maturity. This is very helpful in the unfortunate event of hospitalisation of child in case of severe illness or accident. This amount covers the medical expenses adequately and also act as an add-on to your existing health insurance.
Major Support For Child In Parent's Absence
The plan comes with features like waiver of premium, death benefit and lump sum payout at maturity. Which means, in the unforeseen circumstance of parent's death, the child is not obligated to pay future premiums, gets the lump sum assured, and another payout at the time of maturity of the plan.
Investment For Creatively Talented Kids
Children in creative fields such as cinema, artists, and singers start to earn at a very young age. One can invest that income in a child plan to protect it and substantiate it in the later years. The capital generation over the years will always be a security for child's entire life.
Two Types of Maturity Benefits To Child
Child Plan offers two types of maturity benefits. 1. Money back option; which means the child gets assured returns every year after a few years of the policy becoming active. This helps at various milestones like basic education, higher education, and courses abroad 2. Lump sum payout at the maturity of the plan. You may consider your financial condition and needs, to choose the best option for you. This is huge amount which helps in important events like marriage of the child or buying a house.
Collateral For Child's Education Loans
For higher education loans, a child plan acts as a collateral. Many financial institutions allow child plans to be kept as collaterals against the loan being sought for education abroad, college education, or to meet other child needs.
Apart from all the above, the best benefit of a child plan is that it is the most disciplined way to save for your child's future. We are just a call or email away, to answer your queries! Go for the best suited child plan, NOW!
Importance of Having Child Plans
Having a Child Plan is very important for your child's future.
Importance In Education of Child With a child plan in place, the cost of basic as well as higher education can be met irrespective of the fact whether the parent is alive or not.
Importance In Marriage of Child Marriage is one of the most important milestones in a child’s life and requires substantial amount of financial support. A child plan helps to build a corpus at an early age, hence, such expenses are not a threat.
Importance In Financial Liabilities In the unfortunate scenario of a insured parent’s death the child plan offers a feature called waiver of premium (WOP) where the child is given the benefits of insurance and investment without having to pay any future premiums after the death of the insured (parent).
Importance In Rising Costs With prudent financial planning through a child plan, you can strategically mark important milestones where your child gets financial support to meet different needs at different stages of his life. A child plan ensures this payout both in your presence as well as absence.
|With Child Plan||Without Child Plan|
|Secure future for child for the rest of life||In case of financial losses, child's future is not affected|
|Better education without any financial worries||Child may be deprived of adequate or higher studies|
|In case of parents' death, daily life and financial needs of child are met||In case of parents' death, child will be dependent on outer help|
|Adequate planning for child's marriage||Marriage expenses are a big question in absence of an adequate investment plan|
|A corpus buildup over the years to take care of child's life||No money, no resources. You are putting a big question on your child's life.|
Through the comprehensive insurance platform easypolicy.com, invest in a wholesome Child Plan today!
Types of Child Plans
Almost all major insurance companies offer child plans as an important insurance product in their portfolio.
These plans may differ on various parameters depending on individual needs and priorities and come with a customisation feature.
|Regular Premium Plan||Single Premium Plan||ULIPs||Endowment Plans|
|Ease of Premium Payment||Yes||Yes||Yes||Yes|
|Throughout Financial Security For Child||Yes||Yes||Yes||Yes|
|Choice of Investment||No||No||Yes||No|
|Choice of Prematurity Withdrawals||Yes||Yes||Yes||Yes|
|Can Be Used As Collaterals Against Loans||Yes||Yes||Yes||Yes|
|Premium Waiver Benefit||Yes||Yes||Yes||Yes|
Easypolicy gives you the ease of studying and comparing all the plans at one single platform and reaching the best child plan as per your needs!
Benefits Of Comparing Child Plan!
Keeping in mind the demand for child plans to secure children’s future, almost every insurance company and banking institutions have launched child insurance plans and child education plans.
However, the challenge is to choose the best child plan out of many so as to ensure your child’s absolute financial safety today as well as in the coming years.
This is where comparing child plans helps a great deal. With easypolicy.com, your most trusted comparison engine for all kinds of child insurance needs, you can make these comparisons at ease and reach the best child plan for your dear one.
Here are the compare parameters for you to consider and buy a child plan.
Claim Settlement Ratio
This is the ratio that talks about the company’s claim settlement records. Higher the ratio means higher claim settlement. Choosing the insurer with higher claim settlement ratio will ensure that your nominee won’t have to run pillar to post to get his rightful claims.
The cover amount depends on the age of the insured, income and other factors. When you compare different plans, you are able to select a plan that offers maximum cover amount to safeguard your child’s future without putting a hole in your pocket.
You require the maximum term for a child plan so that it provides financial safety to your child for as long as possible, even after becoming an adult. Comparing various child plans will help you to buy a plan that ensures the longest policy term at lowest prices.
Terms & Conditions
The terms and conditions for every insurer vary and that is where it depends whether you’ll benefit out of a plan or not. Studying them in detail and comparing will help you choose the plan that balances the benefits for both the insured and the insurer.
Riders And Benefits
Apart from the basic plan benefits, different insurers offer riders and benefits at a slightly extra cost. Also, while some insurers may offer a few benefits under the basic plan features, some others might charge an extra premium for the same. Comparing can help you select the best plan with maximum benefits.
The best child plans are those that offer maximum maturity benefits based on your investment. This should be the scenario whether the insured passes away during the term of the plan or outlives the term. Comparing child plans offer you the best deal possible.
Based on various factors and individual insurer’s priorities, the premium changes for different child plans even if the cover amount and the term of the plan are same. Comparing plans online will help to buy the product with lowest premium that offers maximum benefits. Look for the different *premium amounts stipulated by insurance providers* in a different section on the website.
Make good use of all the information available at easypolicy.com and select the best child plan!
Factors That Affect Premiums On Child Plans!
While you want to choose the best Child Plan to safeguard your child's future, you also must be considerate about how much money you want to invest in that child plan, which can take care of all the needs.
There are premiums that you need to pay to buy a child plan, and there are certain factors that affect that premium value.
Here is a quick run through those:
- What are the key years of your child's life where substantial funds will be required?
- What is the lump-sum required at those stages?
- Based on those requirements, how much can you save, or invest as premiums towards child plans?
- What kind of a child investment plan is the best to meet key phase requirements such as higher education and marriage?
- What kind of life assurance you want for your child in your presence, and your absence?
Based on these questions, you may want to invest in following types of Child Plans, and find out how much premium you need to pay:
1) Money Back Policies offer the facility to withdraw money at regular intervals. Higher premiums.
2) Endowment Policies are simple policies based on debt investments and returns might not be too high. Lower premiums.
3) ULIPs are market related insurance plans where in the child will receive the sum assured as a lump sum in case the parent dies and the future premiums are waived off. Medium to higher premiums.
These plans come with basic features with basic premium values to be paid.
If you need to enhance the basic plans, you need to add riders. Riders are special benefits which one may opt at the time of purchasing the policy.
Listed below are some of the Riders available under a Child Plan which directly affect the premium:
Waiver of Premium Benefit Rider
This rider comes at extra premium and allows the plan to continue, without burdening the child for paying the balance premiums, in case the insured parent dies
Accidental Death Benefit Rider
A little premium is charged to buy this rider, under which, the child receives additional rider sum assured if parent dies in an accident.
Accidental Permanent Total/ Partial Disability Benefit Rider
If the parent suffers permanent or partial disability due to an accident, the child becomes eligible to receive a lump sum amount, which is equivalent to the rider sum assured. Again, little extra premium is to be paid for this additional benefit.
Critical Illness Benefit Rider
If the parent suffers from a critical disease like Heart Attack, Cancer, Coronary Artery By-pass Graft Surgery (CABG), Stroke, and Kidney failure, child receives an additional rider sum assured. A small to large premium is charged, based on the age of the parent.
Income Benefit Rider
This rider makes the child eligible to receive 1% of the rider sum assured, every month, in following occurrences:
i) Death of the parent.
ii) Permanent disability of the parent due to an accident.
iii) Parent being diagnosed with any of the critical illnesses specified in the policy.
A small premium is charged to get the benefits of this rider.
Fund Planning Tips Before Buying A Child Plan!
There is a range of Child Plans in the market being offered by various insurance companies. To choose the best for you child's secure future, you need to plan smart and make the right choice.
Here are a few tips to help you plan your and your child's future needs and make the best investment accordingly:
The early your start, the bigger is the corpus of funds for your child's future needs. Majority of child plans offer maturity benefits when your child turns 18, and the payouts are available at key milestones. You may want to start as soon as your child is born, or at the maximum when he/she is 5 years old. Thus, you will have more than enough funds in hand by the time they are ready for higher studies or any courses abroad, which come at a very high cost.
In the coming years, by the time your child is ready for higher education or other important steps, say around 10-15 years down the line, the costs will certainly be much higher than today. For example, if your child will be ready for medical studies in 15 years, consider the average inflation in 15 years and the estimated cost of medical studies at that time. Keep that factor in mind and invest in a plan which is going to give that amount a decade later.
Before you finalise, read the terms and conditions, no matter how time consuming it is. Usually, we tend to skip through them, because it seems boring and tedious. But, the best child plan will be the one with best feature
Premium waiver benefit is very important, so that your child is not under any financial liability of paying future premiums. In the unfortunate event of your demise, all the future premiums are waived off, yet the child gets all the benefits. This feature is usually available with child plans, but in case not, choose it.
There is a feature of partial withdrawals associated with child plans. These withdrawals come in handy during medical emergencies or other immediate needs related to education, for your child. Choose this feature, so that you can attend to emergent needs without disturbing the usual course of funds required for day to day needs.
Child plans are sensible and futuristic investments. You always have a choice to invest in debt based or equity based plans, basis your risk handling abilities. If you are looking for greater returns from your investment, you may want to invest in equities. Also, there are options like Systematic Transfer Plan and Dynamic Fund Allocation, where the insurance companies take care of the smooth flow of funds in various instruments and you do not have to be worried about the funds that you would need at a certain time. Make a thorough research with your insurance provider and then invest.
There are all kind of child plans available at easypolicy.com. Compare and buy the best for your dear child.
How Easypolicy Helps You To Buy Best Child Plan!
Your child’s future is of paramount importance and hence there shouldn’t be any delay in buying a child plan for him/her. Do not procrastinate your decision to buy a child plan.
We are here to help you with these:
One Stop Information Facilitating Sensible Decisions
Easypolicy has ensured that all information related to child plans is easily available and made up to date to help you make correct decision. You can find all the answers to the questions related to child plans only at easypolicy.com and make an informed decision.
Quick Purchase Procedure
Easypolicy understands your need for an easy and simple process to buy a child plan. At easypolicy.com, you can buy the most suited child plan only at a few clicks, after furnishing the relevant information. There is almost negligible paperwork required and your policy reaches you in no time.
Helping With The Claims
Easypolicy will assist you in filing for the claims, helping you with the documentation and shall provide all necessary help till your claims are not processed. Even though claims will be handled by the individual insurer, we will stand by you as a friend and guide you at every step of the process.
Easypolicy’s advanced search filters will ensure that you get access to only those child plans that have features, which you specifically require. This helps to provide you information that’s important rather than cluttering it.
We want to make the process of buying child plans extremely easy for you and hence we offer you the service of collecting all necessary documents from your door step anywhere in the country. It will also be then our responsibility to deliver them to the insurer within stipulated deadlines.
Our job doesn’t end at selling you the child plan, but it just begins. We will ensure you’re updated about everything related to your policy, delivery of policy documents, reminders about premium payments, any grievances etc.
Assisting In Paperwork
Buying child plans would need you to fill necessary forms and provide required documents. Our experts are at your service to help you fill those forms so that you furnish complete and accurate information and there are no discrepancies.
The documents required by all insurance companies are:
- Yours And Your Child's Age Proof
- Latest Passport Size Photographs
- Relationship Proof
- Identity Proof
- Address Proof
- Income Proof
- A Self-check
- And The Duly Filled Plan Proposal Form
For your child's safe, secure and bright future, invest in a meaningful Child Plan through easypolicy.com today!