Securing your child’s future is one of the most important financial goals for any parent. Whether it is funding higher education, planning for their marriage, or ensuring financial stability in your absence, a well-chosen child insurance plan can make all the difference. But with so many options available, how to choose the right child plan becomes a critical question. In this guide, we will help you navigate the process of selecting the best child plan for your needs in 2025, ensuring your child’s dreams are within financial reach.
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What is a child insurance plan and how does it work?
A child insurance plan is a unique financial product that combines the benefits of life insurance and savings. These plans are designed to help parents build a secure financial corpus for their child’s future milestones, such as education, marriage, or starting a business.
Here is how it works:
- Life Insurance Component: The policyholder (usually the parent) is insured, and the child is the nominee. In case of the policyholder’s untimely demise, the child receives the sum assured, ensuring financial security.
- Savings Component: These plans allow you to invest systematically over time to build a corpus. Upon maturity, the accumulated amount can be used to meet significant expenses.
Key features of a child insurance plan:
Dual benefit of savings and insurance:
Combines life cover with investment or savings to build a secure financial future for your child.
Maturity benefit:
Offers a lump sum payout at maturity to fund key milestones like education or marriage.
Premium waiver benefit:
If the parent (policyholder) passes away during the policy term, future premiums are waived off, and the plan continues without interruption.
Life cover for the parent:
The life insurance is usually on the parent’s life, ensuring the child’s goals are protected even in their absence.
Partial withdrawals:
Some plans allow partial withdrawals after a certain period, helping to manage short-term education needs or emergencies.
Flexible payout options:
You can choose between lump sum or staggered payouts to match your child’s needs at different stages.
Tax benefits:
Premiums paid qualify for deduction under Section 80C, and the maturity amount is tax-free under Section 10(10D) (as per current tax laws).
Customisable investment options:
ULIP-based child plans offer equity or debt fund options depending on your risk appetite and time horizon.
Learn how child plans safeguard your aspirations with assured returns and financial protection. Check plans and get quote today!