Child Insurance Plans | Child Education Plans In 2024 - छोटे बच्चों की बीमा योजना
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Child Insurance Plans
Want to keep your child's toothless grin forever?
Well then put your money in a smarty-pants insurance plan for your
little one and save for your kiddo's future dreams.
Take a step ahead to fulfill your child's dreams
What does a child plan offer?
Life Cover
Waiver of premium Benefit
Tax Benefits³
Systematic Withdrawals
Accrued Bonus
Loan² Facility
Explore Edelweiss Tokio Life Child Insurance products
Edelweiss Tokio Life Insurance does not offer a separate child insurance plan segment. We offer unique ULIPs and Guaranteed Returns Plans that offer specific features for securing the future of your child.
How does a child plan work?
A child plan can be an Endowment Policy, a ULIP, or a money-back plan. In a money-back plan, the child gets a lump sum survival benefit at regular intervals. These plans are helpful for people who need a lump sum amount at a time in the future. However, these plans do not offer significant returns. Hence, they might not be able to offset the impact of inflation, especially if you need the money for education expenses.
Secondly, a ULIP plan is an investment and insurance plan, where a part of your premiums is used to provide a secure life cover and the remaining portion of the premiums is invested in different market securities. The investment made is as per your life stage, risk appetite and financial objectives. In case of the demise of the parent, the child gets a lump sum amount. Moreover, all future premiums of the policy will be waived.
Thirdly, an endowment policy is a plan where you receive a lump sum along with bonuses. These plans are useful as they help create a corpus for higher education expenses, etc. However, these policies are different from ULIP plans as they offer a guaranteed return.
How child plan is different from a term plan?
Child plans denote Savings plans or ULIP plans, whereas a term policy is a pure life insurance plan that guarantees a death benefit if the policyholder dies within the plan tenure. Post this, the plan ceases to exist. There is no maturity value offered by term plans in case the policyholder survives the term.
Alternatively, in insurance policies for children, the death benefit is paid upon the demise of the policyholder but the policy continues to exist. Moreover, the plan pays out a maturity benefit in case the policyholder survives the tenure.
Benefits Of A Child Insurance For Your Child’s Education
Getting a degree from the best educational institute requires a strong financial plan. An IIM Ahmedabad course fee has risen by 4 times in the last decade crossing the Rs 20-25 lakh mark. The tuition fee for an undergraduate engineering student at IIT today (in 2020) is Rs 2-3 lakh per annum. An MBBS degree from a private college which now costs about Rs 25-30 lakh. So, if you want your child to graduate from a premium institution then not only should be your child bright enough to qualify, but you need to be rich or save systematically to pay for the classes.
A child education plan is a combination of investment and insurance. It will help them focus on their career without worrying about finances even in your absence. The returns would be sufficient to help your child meet his future needs even when you are not around.
When it comes to your child’s education, it is a must to start saving as early as possible; to be financially prepared to support your Child’s dream. You could save up little by little every month, build up a fund over the long-term or you could start saving with a child insurance plan. You can choose to get returns at important stages of your Child’s life.
Customer reviews on our child insurance plans
Mrs. Renuka Ahuja, 35 years, Mumbai
“As a mother, I want the best for my child. But after the sudden demise of my husband last year, I was very worried about my kid’s future and what will happen to my daughter if I was not there too. I consulted an expert who suggested the Wealth Secure+ plan by Edelweiss Tokio Life. Now, I have a life cover for 100 years, which also includes my child, along with attractive returns from the market-linked investments. I am now relieved about the future security of my child”.
Mr Mayank Pandey, 50 years, Rajasthan
“We have two daughters and both are very bright. As parents, we want them to work hard and achieve greater heights. But the rising cost of education was a constant worry. I consulted my wife and we both decided to contribute towards a ULIP plan from Edelweiss Tokio Life. We are assured of our returns and also have a reliable insurance cover that will protect our daughter’s future in case any of us are not around. I am relieved my daughters will have their wings to fly and can soar higher.”
Mr Rajat Sharma, 45 years, Assam
“My son wanted to be an astronaut when he grows up. I was happy but also worried that my financial situation would hamper his dream. That is the reason, I thought to invest in a wise plan, and ultimately found the Edelweiss Tokio Life plans. I chose the Edelweiss Tokio Life Builder Plan, where I got a guaranteed income and life cover. I also have a loan facility and I can pay premiums as per my flexibility. With this plan, I have been able to fund the high expenses of my son’s education in a prestigious college offering astronomical education”
Tax Benefits³ With A Child Education Plan
Apart from the other benefits of a child education plan, tax benefits¹ are sure an added perk.
Tax Benefits³ on child plan premiums paid :
Premiums paid towards child plans are eligible for deduction under section 80C of the Income Tax Act, 1961. You can claim a deduction from your taxable income for this. This deduction is up to Rs.1.5 lakh a year.
Tax Benefits³ on income from child plan :
The amount received at maturity of the child education plan, will be completely tax free³ under section 10(10D)
If you have opted for a ULIP investment, the maturity payouts are tax-free if the total annual premiums paid are below ₹2.5 lakhs. If the annual premiums exceed ₹2.5 lakhs, then the maturity payouts will be taxed as Long Term Capital Gains.
Why ULIPs are Good Child Plans?
Flexible Fund Withdrawal
No matter what your premium paying term or policy term is, after the lock-in period of 5 years, you can fully or partially withdraw funds from your account whenever you need it for your child’s education.
Systematic Savings For Your Child’s Education
ULIPs give you the benefit of putting aside a chunk of your income to save it for your child’s education and dreams in a systematic way.
Wealth Accumulation
ULIPs not only let you save your earnings, but also help in growing wealth by allocating it to market-linked funds.
Why ULIPs are Good Child Plans?
Flexible Fund Withdrawal
No matter what your premium paying term or policy term is, after the lock-in period of 5 years, you can fully or partially withdraw funds from your account whenever you need it for your child’s education.
Systematic Savings For Your Child’s Education
ULIPs give you the benefit of putting aside a chunk of your income to save it for your child’s education and dreams in a systematic way.
Wealth Accumulation
ULIPs not only let you save your earnings, but also help in growing wealth by allocating it to market-linked funds.
Child Education Plans – Myth v/s Reality
Myth 1 : Child Education Insurance Plans covers a child’s life. It is inauspicious to buy insurance in the name of a child.
Reality : Most child plans insure the life of the earning parent, and not the child. The benefit associated with child plan’s is that the child’s future dreams of pursuing higher education are fulfilled, in case of an untimely death of the parent.
Myth 2 : Child Plan ends if / when the parent dies.
Reality : The beauty of child education plans is that usually they come with a Waiver of Premium Option, which means upon an untimely demise of the parent, the future payable premiums are waived off, and the policy continues. There is no impact on the benefits due to be received at maturity of the child plan.
Myth 3 :The child insurance plan is suitable only for meeting the education costs for the child.
Reality : Child Education plans are designed to take care of the rising cost of education for your child. However, there is no restriction on the usage of the amounts received at regular intervals during the policy term and at maturity. Example – If you invested in a child education plan for higher studies, however, your child chooses not to pursue further studies and use the funds instead for other commitments, he / she may do so irrespective of the original goal it was intended for.
Myth 4 : The Child Insurance Policy locks in the investment for a long period.
Reality : Most online child insurance plans are flexible when it comes to policy term. The policy term of most market linked child plans usually range between 5 to 25 years. This means the earning parent can withdraw money, either partially or fully, if required earlier than planned.
Documents required for child insurance claim process
To register a claim, you will need the following documents:
- Duly filled claim form
- Policy documents
- Medical certificate
- Death certificate
- Medical reports and bills
- Port-mortem report, in case of an unnatural demise
- FIR copy
- Account details
- KYC of the nominee or the insured
Tips for Buying Child Insurance Plan
Here are some tips to start investing early in a child education plan
Invest Cash Received as Gifts
A new-born child received many blessing from relatives in the form of cash. This is the best source to kick-start the habit of investing regularly for your child.
Planning for Short-Term Goals
While saving for your child’s higher education or marriage should be the ultimate goal, there are many short term needs such as playschool and primary school admission, birthday parties, etc. that also need a considerable amount of funds. It is important to ensure that parents takes these expenses into consideration too.
Consider Inflation and Future Demands While Saving
When you start saving for your child’s education or wedding while he or she is a toddler, you may not consider the rate of inflation or the ever-growing needs of society. What would be the cost a decent university degree today will not be even close to sufficient once your child grows up.
8 tips to buy the best Child Education Plan
01 : Start Early
Even though we have Education Loans to our rescue, self – funding your little one’s aspirations is always a better idea and surely makes you a proud parent.
02 : Factor Inflation
Monthly premiums for child plan’s start with as low as Rs.1000 per month. But before you decide how much to invest in your child education plan, take into account the changing economic factors. Hence, while investing in a child plan, it is important to calculate the fund you wish to accumulate keeping inflation in mind.
03 : Waiver of Premium Benefit
Most online child education plan’s offer either an in-built or an optional Waiver of Premium Benefit. This rider is important to be opted for while buying a child education plan. This is because in case of an untimely death of an earning parent, the future / remaining premiums payable to keep the policy going, are waived off without any changes in the benefits of the child plan taken during maturity.
04 : Joint Life Cover
Choose a child plan that provides a joint life cover to you and your spouse. This ensures that even in the case of an unfortunate demise of one parent, the child’s future is still secure as the other parent will still be insured. Edelweiss Tokio Life – Wealth Secure Plus is one such ULIP child plan that gives the option of choosing a joint life and joint life + child plan option.
05 : Systematic / Partial Withdrawals
It is a good idea to invest in a child education plan which has an option of either systematic or partial withdrawals during the policy term. This will give you the flexibility of meeting any unplanned expenses or medical emergencies where you may be forced to seek financial help.
06 : Choice of Funds
Basis your appetite for risk and a considerable time for investment, (at least 10 years), you should consider investing in more of equity or market linked funds v/s secured funds. It is suggested to stay invested in equity when the markets are bearish and move to a debt / secured fund, when the markets are volatile. This is in case of a self-managed portfolio. You also have an option to buy a child plan where the units are managed by the company’s fund managers, to bring you the best returns.
07 : Switching & Premium Redirection
This option allows you to switch between funds or redirect remaining premiums to other funds basis the stock market condition.
08 : No or Low Charges
While choosing for a child plan, you should consider the various charges such as policy administration charge, premium allocation charge, mortality charge etc. that are associated with various life insurance plan.
Child plan vs Sukanya Samriddhi Yojna (SSY) vs Public Provident Fund (PPF)
An insurance plan that offers coverage to children is often compared with a PPF policy or a government-sponsored scheme such as Sukanya Samriddhi Yojna.
| Parameter | Child plan | SSY | PPF |
|---|---|---|---|
| Monthly income support to fund education in case of death of the parent | Yes | No | No |
| Waiver of future premiums in case of death of the insured parent | Yes | No | No |
| Lump sum death benefit payment in case of death of the insured parent | Yes | No | No |
| Average returns | 11-14% | 7-8% | 6-7% |
| Entry age | 18 years | 10 years | No limit |
| Permission for withdrawal of funds | After 5 years | After 21 years | After 15 years |
| Premature closure and penalty | Permitted penalty-free closure after 5 years | Allowed in case of compassionate reason. But rate of returns reduced to office savings rate | Allowed in case of serious ailment or for education, post deduction of 1% interest rate |
| Maximum annual deposits | No limit | Up to Rs 1.5 lakhs | Up to Rs. 1.5 lakhs |
| Documentation process for withdrawal | Low | High | Low |
| Tax benefits | Yes | Yes | Yes |
How does waiver of premium benefit work in Child Plan?
One of the most coveted benefits of an insurance plan for children is the waiver of the premium feature. As per this feature, if the parent of the child dies in the tenure of the child plan, the insurance company waives all the pending premiums of the policy. Further, the insurance company pays out a defined death benefit as a lump sum to the nominee, while the due premiums of the policy are paid for by the insurer on behalf of the nominee. At the maturity of the policy, the child receives the maturity amount as per the policy document.
Exclusions of Child Insurance Plan
If the policyholder dies due to the following circumstances, the insurance plan does not offer any benefit:
1. Drug or alcohol use
2. Self-harm or suicide
3. Adventurous or risky sports
4. Criminal activities
Reasons Why You’re Bound to Love Us Back
We’ve got experience in helping people make their Zindagi unlimited
We’ve got expertise in helping you grow your wealth
We constantly innovate our offerings to get better results for you.
Reasons Why You’re Bound to Love Us Back
We’ve got experience in helping people make their Zindagi unlimited
We’ve got expertise in helping you grow your wealth
We constantly innovate our offerings to get better results for you.
We are always there for you!
For queries, write to onlinesales@edelweisstokio.in
0 - Provided the premium paying term is more than or equal to 10 years.
1 - This is applicable only if all due premiums are paid and the policy is inforce.
2 - Policy loan are subject to terms & conditions of the product. Refer product brochure for more details.
3 - As per provisions of Income Tax Act, 1961. Tax benefits are subject to changes in tax laws.
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