A child plan combines insurance and savings which are created to assist parents in ensuring financial security for their children. This article explores the top 5 child investment plans in India that parents can consider to secure their child’s future and learn about the benefits of each plan and choose the right investment plan for their children.
Importance Of Child Investment Plans In India
Investing in a child’s future is crucial in today’s times as the cost of education and living is on the rise.
Child investment plans help parents secure their child’s future by providing financial stability to meet future expenses.
- The cost of education in India has been steadily increasing, making it difficult for parents to finance their child’s education.
- According to the All India Survey on Higher Education, the average annual fee for a professional course in a private institution was Rs. 2.25 lakhs in 2019-20, while the average fee in a government institution was Rs. 20,000.
- In addition to the cost of education, living expenses also contribute to the overall cost. Accommodation, food, and transportation expenses can add up, making it difficult for parents to manage the expenses.
- With child investment plans, parents can start saving early and build a corpus that can be used to meet future expenses.
Starting early with child investment plans provides the benefit of compounding.
As the child’s investment plans are long-term investments, starting early allows parents to accumulate a substantial amount of wealth by the time their child reaches college.
Moreover, investing in a child’s future also teaches them the value of saving and the importance of financial planning.
Here are the top child investment plans in India.
LIC New Children Money Back Plan
Grandparents or parents of a kid between the ages of 0 and 12 can purchase the LIC New Children’s Money Back Plan.
In the simplest terms, it is an investment and insurance plan that will help to ensure the child’s bright future. This participant plan is furthermore liable for the bonus based on the plan’s performance.
Eligibility Criteria
Age: 0- 12 years
Maturity Age(Max): 25 years
Min Annual Premium
Rs. 4327 ( Monthly, Quarterly, Half yearly, Yearly)
Max Sum Assured
No Limit
SBI Smart Champ Insurance
An individual non-linked participation life insurance plan is the SBI Smart Champ Insurance plan, and it is provided by the SBI-Life Insurance Company.
The plan is specifically made to fit your child’s educational needs and protect them from unknown future events.
You may assure a promising future for your child and save money for their future schooling with the aid of this plan.
The plan provides guaranteed benefits that are paid out exceptionally early in the insurance period.
The SBI Smart Champ Insurance plan, which is a participating plan, accrues bonuses at the end of each insurance year until the kid reaches the age of 18.
Eligibility Criteria
Age:0-13 years
Maturity Age: 42-70 years
Min Annual Premium
Rs. 6085 ( Monthly, Quarterly, Half yearly, Yearly)
Max Sum Assured
Rs. 1,00,00,000
HDFC Life YoungStar Udaan
For parents who want to safeguard and make plans for their child’s future, including academic costs that arise before college education, college fees, and other expenses that arise while in college, HDFC Life YoungStar Udaan is a standard participating plan.
This child plan enables you to prepare for your child’s future with a strategy that provides various benefits.
Eligibility Criteria
Age: 30 days- 60 years
Maturity Age: 18-75 years
Min Annual Premium
Rs. 24,000 ( Monthly, Quarterly, Half yearly, Yearly)
Max Sum Assured
Depends on age, premium chosen and policy terms.
ICICI Prudential Smart Kid Solution Plan
A unit-linked insurance plan that develops your money and aids in securing your children’s educational milestones is the ICICI Prudential Smart Child Solution Plan.
With this plan, you can decide how many years you want to pay premiums. You have the choice of the One Pay (single premium payment) or Monthly Pay options.
Eligibility Criteria
Age: 20- 54 years
Maturity Age: 30-64 years
Min Annual Premium
Rs. 48,000( Monthly, Half yearly, Yearly)
Max Sum Assured
10 times of single premium made
Max Life Insurance Future Genius Education Plan
The participating non-linked life insurance plan is Max Life Future Genius Education Plan.
With the aid of this plan, parents can begin saving early for their children’s education.
You must make a strategy in advance to provide your children with the Higher education they need to scale the heights of success given the growing cost of school.
Eligibility Criteria
Age: 21- 45 years
Maturity Age(Max): 66 years
Min Annual Premium
Rs. 40,000( Monthly, Quarterly, Half yearly, Yearly)
Max Sum Assured
No limit
Benefits Of Child Investment Plans In India
Child investment plans in India are investment schemes that are specifically designed to help parents save for their children’s future financial needs, such as education, marriage, or any other expenses.
These plans come with various benefits that make them an attractive investment option for parents.
Some of the benefits of child investment plans in India are
- Long-term savings: Child investment plans encourage parents to save regularly and for the long term. These plans typically have a lock-in period of 10-15 years or more, which helps parents to accumulate a significant amount of money for their child’s future needs.
- Tax benefits: Child investment plans offer tax benefits under section 80C of the Income Tax Act, 1961. Parents can claim a tax deduction of up to Rs. 1.5 lakh for the premium paid towards the child investment plan.
- Guaranteed returns: Many child investment plans in India come with a guaranteed return on maturity. This ensures that parents get a fixed amount of money on maturity, which they can use for their child’s future needs.
- Flexibility: Child investment plans offer flexibility in terms of premium payments and policy tenure. Parents can choose the premium payment frequency, such as monthly, quarterly, half-yearly, or yearly, based on their financial capability. They can also choose the policy tenure as per their child’s future financial needs.
- Protection: Child investment plans provide life insurance coverage to the parent, which ensures that the child’s future financial needs are protected in case of the parent’s untimely demise.
- Easy to manage: Child investment plans are easy to manage as they do not require frequent monitoring. Once the policy is purchased, parents can relax and let the investment grow over time.
In conclusion, child investment plans in India provide a comprehensive solution for parents who wish to secure their child’s future financial needs. With the benefits of long-term savings, tax benefits, guaranteed returns, flexibility, protection, and ease of management, these plans offer an attractive investment option for parents.
Also, check out How to Choose The Best Term Insurance Plan In India 2023
FAQs
| What are child education investment plans, and why are they necessary?
Child education investment plans are financial products designed to help parents save and invest money to fund their child’s education. These plans are necessary because the cost of education is increasing rapidly, and it’s essential to have a robust financial plan in place to ensure that your child receives quality education without financial worries. |
| What factors should I consider when selecting a child education investment plan in India?
When selecting a child education investment plan in India, you should consider factors such as the plan’s returns, lock-in period, premium payment frequency, policy term, flexibility, and tax benefits. |
| What are the differences between traditional child insurance plans and child education investment plans?
Traditional child insurance plans to offer insurance coverage along with investment benefits, while child education investment plans are purely investment-oriented products designed to help you save for your child’s education. The key difference between the two is that child education investment plans provide more significant returns than traditional child insurance plans. |
| How much money should I invest in a child education investment plan, and how often?
The amount of money you should invest in a child’s education investment plan depends on various factors such as your child’s age, education goals, and the plan’s returns. It’s advisable to start investing early and make regular contributions to the plan to benefit from the power of compounding. |
| Can I withdraw the funds from a child education investment plan before the maturity date, and what are the penalties for early withdrawal?
Most child education investment plans come with a lock-in period, and you cannot withdraw the funds before the maturity date. If you withdraw the funds before the lock-in period, you may have to pay penalties or forfeit some of the benefits. It’s advisable to read the plan’s terms and conditions carefully before investing to understand the penalties for early withdrawal. |
