Irrespective of anywhere you belong in the world, every family celebrates the birth of a child. Parents and other members rejoice the addition of a new member to the existing ones. But, along with happiness, joy, and delight, accompanies challenges and responsibilities. Not only parents have to take care of the day-to-day responsibilities but also comprehend the future needs of their child.
Nowadays, most parents are concerned about the security, safety, and future expenses of their little ones. As everyone knows, death is inevitable, and there is no guarantee in life. So, as a responsible person, every parent must make sure that their kid doesn’t suffer in their absence and can lead a fulfilling life with an absolute sense of security and comfort.
Good parenting involves prioritizing the future needs of your children while fulfilling their dreams. No doubt, you will work hard and spend a hefty amount on their education to build their careers and lead a glorious life. Not only studies but other expenses such as marriage, higher studies, are to be met too. This is where buying insurance plans for your child can help you in the long run.
Children insurance plans address your concerns and help you in making effective financial plans keeping in mind the hopes and aspirations of your kid. Child insurance policies comprise of two aspects. Firstly, these policies ensure life coverage for the policyholder. Secondly, they use your money to invest in equity or debt instruments to create wealth, which can protect the life of your child and manage significant future expenses. Moreover, child insurance plans offer tax benefits on investments and returns as per the existing tax law.
Mainly, child insurance plans include unit-linked insurance policies (ULIPs) and traditional endowment policies. Both of them are the right blend of insurance and savings. In ULIPs, your money is put in equity markets. You can choose a mix of low and high-risk funds with the option to shift between different types of funds. The chances of returns are high when an investment is made for a more extended period. So, the main idea is protecting your child while investing your corpus and providing them with various benefits associated with the plan in the future.
In the traditional endowment policies, the investments are made in safe and low-risk investment products. The returns may not be significant but are stable. The insured save regularly over a period, and later the insured or the nominee receives a lump sum amount upon the maturity of the policy.
Some of the best child plans in India 2019, along with their essential features are highlighted below.
AEGON Life Rising Star Insurance Plan
Aegon Life Insurance Company Limited was established to provide a better life to its customers. This company serves around 4 lakh customers in our country, along with employing 9600 insurance agents.
One of its investment plans, Aegon Life Rising Star Insurance Plan, is a unit-linked insurance plan intending to secure your child by meeting their financial needs in the future. Here, the money, once invested, cannot be withdrawn or surrendered before the end of the fifth year.
Some key features include:
- Your child can avail of the benefits of the insurance coverage until he/she attains the age of 25 years.
- Partial withdrawals are permitted after five years.
- Adequate tax benefits along with options of paying an additional premium and increasing the protection level during the term of policy are some of the benefits provided by this plan.
- The entry age of parents is 18-48 years, and for the child, the minimum can start from 1 day to a maximum of 15 years.
- The minimum annual premium is 20000 INR and cannot be altered during the term. At maturity, the maximum age is 65 years. The basic policy sum assured varies from a higher of 10 times of regular annualized premium to 18 times of annualized premium (AP) for the age of lesser than 45 years. For a person with age greater than 45 years, the range is higher of 7 times of Regular AP to 10 times of AP.
SBI Life-Smart Champ Insurance Plan
SBI Life Insurance is one of the front runners among the life insurance companies in our country. Among its child insurance plans, SBI Life- Smart Champ Insurance is a traditional individual non-linked participating plan which aims to secure your child’s educational needs. This plan pays dividends at the end of the policy year until the child is 18 years. It offers many benefits, including security, reliability, and flexibility, while choosing a suitable plan based on the affordable premium amount.
Some key features:
- It offers triple benefits to your child in case of death of the life assured. The nominee or your child gets the lump sum amount immediately. Also, all the future instalments, if any, are left unpaid need not be rewarded, and due episodes of smart benefits are payable.
- At the entry, the minimum and maximum age for life assured is 21 years and 50 years, respectively, and minimum and maximum age for the child is 0 years and 13 years, respectively.
- At maturity, the maximum age for life assured is 70 years, and for a child is 21 years.
- The minimum basic sum assured is INR 1, 00,000, and the maximum value is one crore.
- The minimum annual premium varies according to the payment mode, like monthly, quarterly, half-yearly, yearly, or single. For a single premium, the amount is INR 66,000, and for annual premium payment, the amount is INR 6000. The maximum annual premium is based on the sum assured.
HDFC SL Youngstar Super Premium
HDFC Life’s Youngstar super premium plan is a unit-linked child plan with life insurance coverage. It embodies both child insurance plans and education policies. This plan can help you fulfil your child’s immediate and future needs.
Some key features:
- You have to pay your premiums regularly in time intervals for the chosen period for payment, i.e., regular premium payment mode.
- First, you have to choose your regular premium and level of protection. Minimum premium amount- INR 15000, and there is no maximum limit.
- The minimum sum assured ranges from 10 × annualized premium (for age less than 45 years) to 7 × annualized premium (for age equal to or greater than 45 years). The maximum sum assured is 40× annualized premium.
- This insurance policy offers you two plan options: 1. Life option – grants death benefits. 2. Life and health option – grants both death and critical illness benefits.
- You can also choose any of the Benefit Payment Preference, along with any of the plan options mentioned above. The option you select determines how you want to receive your benefits in case of death of the policyholder. The two preferences are:
- Save Benefit: Here, the sum assured is paid to the beneficiary. Further future regular premiums need not be paid by your family. Instead, the company pays 100% of future premiums. The fund value is paid to the beneficiary on the maturity
- Save-n-Gain Benefit: Under this, the sum assured is paid on the demise of the policyholder. The company pays 50% of further future premiums, and the rest 50 % is paid to the beneficiary and when due. The fund value is paid on maturity.
- You need to make the right choice while choosing investment funds as the money you pay are subject to capital market risks. Income, balanced, blue-chip, and opportunities fund is available for investment.
- The minimum entry age is 18 years, and the maximum age is 65 years for life option and 55 for life and health one.
- Maximum maturity age: 75 years for life option, and 65 years for life and healthier option.
ICICI Pru Smart kid and ICICI Pru Smart Life Plan
ICICI Pru Smart kid and Smart Life plan are ULIPs that helps customers to take care of their child, even in their absence. They invest in market-linked funds chosen by you, and so, the profits are dependent upon the fund’s performance in markets. More than 2 lakh customers have brought this plan as of April 2017.
Some key features:
- You can choose single pay/ regular pay as per your convenience.
- You can have two strategies for investment. One, you can go for Fixed Portfolio Strategy where you can invest in 8 different funds in the market. The other one is Life cycle based Portfolio Strategy, where the money is allocated to multi-cap growth fund and income funds depending on your age. The money is transferred from equity to debt to protect it from market fluctuations. You can also switch the capital between equity, debt, and balanced funds.
- This policy gives you access to money in case of any emergency. You are allowed to withdraw 20% of your invested capital after five years of taking up the policy.
- The company offers perks and adds to your corpus if you remain invested for a long time, i.e., more than five years, which are known as “loyalty additions” and “wealth boosters’. Every loyalty addition is calculated as 25% of the average fund value. Wealth boosters can be 3.25% for regular payment modes and 1.5% for single payment mode.
- In case of death of the life assured, you are paid the lump sum benefit; higher of the sum assured plus the top-up sum assured or minimum death benefit, which 105% of all premiums including top-up premiums. Top-up premiums are an additional premium above base premiums. Additionally, you receive the company allocates smart benefits and instalment premiums. The fund value is received on maturity.
- The entry age varies from 20 to 54 years.
- The minimum age at maturity is 30 years, and the maximum is 64 years.
- The minimum premium varies according to the age at the entry from INR 45,000 to 5, 00,000 per annum for regular pay. For a single payment, the premium amount is INR 48,000 to 1, 25,000.
LIC Jeevan Tarun Plan
LIC is the most trusted insurance company in our country, withholding the majority of the customer base in the insurance market. One of its products, Jeevan Tarun, aims to protect and save the future of your child against any adversity by meeting their educational and other needs.
Some key features:
- It is a participating endowment limited premium plan where you pay the premium till the age of your child is 20 years. The policy continues further till the age is 25 years.
- Entry age for a child is 90 days to 12 years. The policy matures when the child turns 25. So, any parent or guardian having a child who is below 12 years of age can subscribe to this plan.
- The minimum basic sum assured is INR 75, 000, and there is no maximum limit.
- Under LIC’s Premium Waiver Benefit Rider, future premiums are exempted in case of the death of the policyholder.
- One of the other features of this plan is flexibility. It gives the policyholders the option of choosing the proportions of Survival Benefits. The subscriber gets to choose from the different options at the proposal stage. If in case the policyholder survives till the policy is matured, some proportion of the sum assured is annually paid starting from the completion of 20 years and the next four policy anniversaries.
- When the policyholder survives the complete term of the policy, the amount left after the basic sum assured plus the bonuses received are paid as maturity benefits according to the option chose by the subscriber, and then the policy is ceased.
- These policies also provide death benefits in case of the untimely death of the policyholder. The sum assured at the time of death, along with the bonuses is given to the nominee.
- Survival benefits and maturity benefits as per the Jeevan Tarun plan offered by LIC according to the plan options chosen by the policyholder are given in a tabulated form below:
|Options||Survival Benefits (20-24 years)||Maturity Benefits (at 25 years)|
|Option 1||No survival benefit||100% of the sum assured|
|Option 2||5% every year for 5 years||75% of the amount assured|
|Option 3||10% every year for 5 years||50% of the sum assured|
|Option 4||15%every years for 5 years||25% of the sum assured|
Max Life Shiksha Plus Super
Max Life Shiksha Plus Super is a non-participating unit-linked individual life insurance plan. It is a comprehensive plan which protects your family along with covering the child’s educational needs.
Some key features:
- You can choose a policy term of 10 years or 15-25 years.
- The nominee receives a lump sum amount as death benefits in case of the death of the policyholder. Also, the family of the policyholder is paid a family income benefit in which 10 % of the sum assured is paid on every policy anniversary for not more than 10 instalments.
- Maturity benefits are paid at the end of the term. Tax deductions are availed on the premiums. 20% of the fund value is added to the funds as guaranteed loyalty additions.
- The entry age is 21 to 50 years for the policyholder, and the child’s age should be in between 0-18 years.
- The maximum maturity age is 60 years for five pay and 65 years for regular pay.
- You can invest in corporate bonds, government securities, money market and cash instruments, equity funds, and equity-related securities with six fund options, namely high growth fund, growth super fund, growth fund, balanced fund, conservative fund, and secure fund.
- The policyholders have an option of either taking care of the investments themselves or opt for a systematic transfer plan or dynamic allocation of funds.
- The minimum yearly premium for 5 Pay is INR 50,000, and regular pay is INR 25000.
- The sum assured is a minimum of 10 × annual premium with no maximum limit.
Aviva Young Scholar Advantage Plan (Child Education Plan)
Aviva Group has over 300 years of experience and has served 33 million customers across 16 countries in the world. Avila Life Insurance India Limited is one of the oldest insurance groups in our country. Recently, it has been chosen as Best Brand 2019, and Most Trusted Private Life Insurance Brand for 2018 and 2019 by TRA brand trust Report, 2019, and Economic Times. This plan is a unit-linked non-participating plan where the premium is to be paid regularly.
Some key Features:
- You don’t need to pay further premiums in case of the death of the proposer.
- You are allowed to choose your policy term based on your needs. Also, depending on the level of tolerance of risks, you can choose from the seven fund types.
- Other essential attributes include loyalty additions, systematic transfer plans, and automatic asset allocation. You are allowed to withdraw partially to meet your expenses.
- The entry age of parents can be between 21-45 years and for the beneficiary is0-17 years.
- The maximum age at maturity is 60 years, and the policy term is 10 -25 years.
- The minimum annual premium is INR 50,000, and sum assured is 0.5× policy term ×annual premium or 10 × annual premiums, whichever is higher.
Reliance Child Plan
Reliance Nippon Life child plan is a non-linked, non-variable, and participating child insurance plan which protects your child from future eventualities. It helps in managing expenses of your child’s education, marriage, and businesses and thus contributes to the overall development.
Some key features:
- It guarantees periodic benefits. 25% of sum assured (base sum assured plus high sum assured additional percentage) is paid in the last three policy anniversaries before maturity. The beneficiary receives these benefits irrespective of the survival of the policyholder.
- It protects your family as you get life cover for the entire term. The policy term can be from 10 to 20 years. Future premiums are waived off, and guaranteed benefits are continuously paid to your family.
- At maturity of the policy, you will get the sum assured along with bonuses, and it provides a non-negative capital guarantee when the addition of all benefits is less than 100.
- The minimum age at entry for the proposer is 20 years, and the maximum is 60 years. The age at maturity could be in between 30 to 70 years.
- The minimum sum assured is INR 25, 000, and there is no maximum limit.
Bajaj Allianz Young Assure
It is a traditional child insurance plan which ensures your children a bright future. It participates in profits of the company, making it a participating, individual endowment plan.
Some key features:
- Premiums can be made by both regular pay option and limited pay option.
- The entry age is 18 years minimum, and the maximum age is 50 years. The age at maturity is 28 years to 60 years.
- The policy term can be 10, 15, or 20 years.
- The annual premium amount depends on guaranteed maturity benefit, the age of the policyholder, and the term of the policy and the tenure in which payment is made.
- The sum assured is ten times the annual premiums.
LIC’s New Children’s Money Back Plan
LIC’s New Children’s Money Back Plan helps you to procure the educational, financial, and other needs of your children. It is a participating and non-linked money back plan which grants risk-cover for the child during the term of the policy. Additionally, it offers survival benefits on surviving until the end of the stated duration.
Some key features:
- This plan is valid for a child aged between 0 to 12 years and can be bought by any parent or grandparent.
- It includes death benefits on the demise of the life assured before the date of maturity where premiums excluding taxes, extra premium, and rider premium if any are returned. If the death occurs after the commencement of risk, then sum assured on death, including simple Reversionary Bonuses and Final Additional bonuses, if any are paid.
- If the life assured survives the policy term coinciding with or after completion of 18, 20, and 22 years of age, then 20% of the basic sum assured will be paid on each opportunity.
- This plan offers maturity benefits, which includes sum assured on maturity (40% of the basic sum assured) along with Simple Reversionary Bonuses and Final additional Bonuses if the life assured survives the estimated date of maturity.
- The minimum basic sum assured is Rs. 100,000, and there is no limit on the maximum basic sum assured.
- The maturity age for life assured is 25 years.
- The term of the policy [25-age at the entry] years.
These are some of the best mutual funds that one should look after for their own kids. These insurances, apart from making your kid’s life more insured, will also help you stay secure. Choose the one that suits your requirements the best and make life better for your children. every individual has their own limitations and their own advantages and accordingly one should choose which plan is best for them when it comes to finances. Thus, here, we have tried to give an idea, but the final decision is upon you to decide which one to select.