5 Best Child Insurance Plans in India

child insurance plans

Child Plan

The increasing inflation in India has truly made the upbringing of a kid troublesome and difficult for parents. To deal with this situation there are two options available – either start saving for your child’s future on your own or buy the best Child Insurance Plan from any leading insurance player. The child insurance policies are introduced to offer financial aid to your child, whenever required during any critical situations, like marriage, higher education or illness. These plans will take proper care of your kid’s future financial needs.

Types of Child Investment Plans

There are two different types of child plans available today:

  • Traditional Insurance Plans – In this type of traditional plans the payout is guaranteed. The investments are usually made in low yielding and safe products, thereby the returns are lower, but stable and guaranteed.
  • ULIP Insurance Plans – Here the investments are more into equity markets, thereby the returns are higher. However, risk factor is involved as it is a market risk plan.

Best Child Insurance Plans

Aviva Young Scholar Advantage 

This is a ULIP Plan perfect for parents that are life-insured. This plan doesn’t offer protection to child, but provide security to the future of your child after the death of his/her parent. The child is guaranteed to get the Sum Assured which will help them to meet their requirements after the death of their parent. After the dismissal of parents, the future premiums will be paid off by the company and at the time of maturity the child will also get the Fund Value.

Bharti AXA Life Future Champs 

This is a conventional money back child plan and perfect for parents with life-insured. If the parent dismisses within the tenure of the policy, the child automatically becomes the nominee of the policy and they will get the sum assured amount to meet their pressing requirements of family. In this plan the future premiums will be waived off after parent dismissal and the survival benefits will be paid off to the child on maturity of the policy.

(BSLI) Bachat Child Plan 

This is the best, endowment, non-participating child plan by BSLI. No bonus is declared by the company in this child plan, but the returns are stable and guaranteed. The parents are life insured in the plan, thereby no protection is offered to the child. During the policy tenure, if the parent dismisses the child will automatically get the sum assured as immediate benefit. The future premiums will be paid off by the company after parent dismissal during the tenure of the policy and the maturity benefits would be paid off to the child whenever it is due.

Kotak Child Advantage Plan

This is a participating plan where the life of child is insured. The premium amount will be credited to Accumulation Account after deduction of charges. The returns are also credited to Accumulation Account. Since the life of child is insured, the policy will continue even after parent dismissal. The policy terminates after child’s death within tenure of the policy and the death benefits will be paid off. If child survives till the maturity then higher sum assured and accumulation amount will be paid.

LIC Jeevan Anurag Plan 

This LIC child insurance plan is basically designed to take care of your child’s education. This insurance plan offers assured benefits and death benefits. If the parent dies, the sum assured is paid off instantly to the nominee (the child). In the last three years of the policy, 20% of basic sum assured will be paid to the nominee at the beginning of every fiscal year, regardless of whether the parent is alive or death. 40% of sum assured and bonus will be paid at the time maturity.

How To Save Money with child plans?

A child plan is a plan that supports the family with the child’s future in the case of an unfortunate death of the parents. The child is not the one who is insured but it is the parent that is insured on whom the child is dependent (minor child). The plan is designed in such a way that it ensures the financial support of the child after the demise of the parent(s). The underwriting is done on the life of the parent. Children become extremely vulnerable without their parents. Child plans come in as a protector to the child with all the money that the plan helped the parents to save for the future of the child in case anything happens to them.

There are a lot of ways in which you get benefit more through the child plan and provide a better future for your child.

Kick – Start the child plan as soon as possible

Starting the child plan early will help you save more money on it. Starting early allows you to save more money and invest little money. For the future education of your child, you must start investing in the child plan soon. The inflation rate will increase the cost of education in a few years when your child will be of age to go to university. With the high prices now, you can only imagine how much they will increase in a few years. So, if you want a huge sum of money to be saved for your child’s future, then you must start investing when your child is young. You can kick start a child plan as soon as they are born, the minimum entry age of the child, in most insurance company’s rules, is 0 years. The earlier you start, the more you will be able to accumulate for the secure future of your child. A significant corpus will be collected throughout the period of time allowing your child an easy future financially.

Choose well for a premium waiver

There are a lot of child plans available in the insurance market, nowadays, but there are quite a few which offer the premium waiver option. A premium waiver is that the insurance company will continue to the fund the premiums of the child plan in the case of the death of the parent. The premium will be waived off the child and the insurance company will provide to pay the premiums allowing the continuation of the child plan till the term comes to an end. The premium waiver will make sure that the maturity benefits remains intact till the end of the tenure of the child plan. So, the crux of this point is that, in case of the death of the parents of the child, the insurer will waive off the premiums to be paid while ensuring that the child plan is continued by paying the premiums from their side. So, you need to choose a child plan that will offer the premium waiver option so that your child is secure even if you were not able to complete the premium payments.

Get the Accidental Death Rider

Sure, a rider will cost some extra premium to be paid but it saves a lot of money for the future of your child. With the accidental death rider, you can ensure that your child will get the money from the rider as well as the basic child plan that you paid the regular premiums for. In the case of the unfortunate and accidental death of the parent(s) of the child, the child insurance company will pay an amount which is usually equal to the sum assured of the plan as a accidental death rider benefit and the child will also continue to get the amount of the sum assured on the maturity as a part of the basic child plan. So, make sure to get the accidental death benefit rider on your basic child plan to save a huge a amount of money for the future of your child in your absence by just paying a small extra premium which will ensure a huge return and benefit as a rider plan.

Conclusion

There are many ways to save money with child plans for the secure future of your child even when you are not with them. You have to choose the plans that offer your child the most benefits and make sure that there will be no problem in the maturity benefits by comparing and choosing the best possible child plan for a your child that guarantees a secure future for the, even after your death. The accidental death rider will provide your child with an extra death benefit in case of your unfortunate and accidental death.

About Archi 53 Articles
Archi is an independent finance and investment advisor since 4 years and recently added with Investment Pedia. User are welcome to put questions on her contributions.

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