Planning for financial goals has become crucial today - be it for wealth creation, retirement, or your child’s future. HDFC Life offers products that not just help you plan your child’s future goals but also provide your family with a corpus, in your sunset years or the event of your absence.
Read moreNothing Is More Important Than Securing Your Child's Future
Invest ₹10k/month your child will get ₹1 Cr# Tax-Free* on Maturity
In this article, we are discussing three HDFC insurance plans for children, which shall help you in achieving your financial goals.
It is a unit-linked plan that provides you with three plan options to choose from depending on your investment needs:
This option provides life coverage and takes care of your investment requirements by providing accrued fund value when the policy matures.
This is an option that takes care of all your financial responsibilities in your absence. In the event of your unfortunate death, all future premiums shall be waived, and it shall be ensured that your fund does not stop growing so that your dependents continue to build the corpus on your behalf for the dreams you have nurtured for your beloved ones.
Retirement marks the beginning of one’s life where an individual prefers spending quality time with loved ones. This plan option provides you with the solution to build a corpus while also having life cover for the rest of your life (till 99 years of age).
In addition, you may choose systematic withdrawals to generate regular income for your retirement stage from your accrued fund.
The plan option, once chosen, cannot be altered throughout the policy term, and charges will vary as per the plan option selected. However, you may now decide how you want to manage your investment portfolio from 10 different fund options.
People also read: Child Education Plan
Eligibility Criteria, Premium Amount, Premium Paying Term, and Policy Term
Parameters | Invest Plus | Premium Waiver Option | Golden Years Benefit Option |
Age at entry | Life Assured: 0 years (30 days) to 60 years | ||
- | Proposer: 18 years to 65 years | - | |
Age at maturity | 18 years to 75 years | 18 years to 75 years | 99 years |
Minimum premiums | Single: Rs.24,000 Annual: Rs.12,000 Half-yearly: Rs.6,000 Quarterly: Rs.3,000 Monthly: Rs.1,000 |
||
Maximum premiums | No limit, subject to HDFC Life Underwriting Policy | ||
Policy term | 10 to 40 years | 99 minus entry age | |
Premium payment term | Single pay, Limited: 5, 7, and 10 years Regular: 10 to 40 years |
Limited pay: 10 to 70 minus entry age |
Sum assured
You have the option to choose the sum assured under the policy as follows:
Boundary Conditions | |||
Parameters | Minimum | Maximum | |
Sum Assured | Single Pay | 1.25 x Single Premium | Maximum Sum Assured shall be as per HDFC Life Underwriting Policy |
Regular & Limited Pay | 10 x Annualized Premium |
On maturity of the policy, you will receive your fund value, which will be computed by multiplying balance units in your fund by the prevailing unit price.
For a valid policy, the death benefit shall be:
On death of the life assured, highest of the following:
Total sum assured subject to adjustments
Fund value
105% of total premiums paid.
On the death of proposer - This is applicable for Premium Waiver Option only, where the proposer is different from life assured. All future premiums shall be waived, and on each scheduled premium due date, an amount equivalent to the modal premium will be added to the fund value.
There are no charges applicable in this product other than fund management charge (ranging from 0.8% p.a. to 1.35% p.a. of fund value depending on the investment plan) and mortality charge (ranging from 0.10% p.a. to 1.23% p.a. of the death benefit less fund value).
The total amount of deducted mortality charges for the insurance cover of the insured throughout the policy is added to the fund value when the policy matures.
Under this facility - which is available under all the 3 Plan options - for the first 5 policy years, 1% of the annualized premium or single premium shall be added to the fund value at the time of allocation of premium.
This HDFC Insurance Plan for Children helps to build a corpus for yourself and your loved ones in the unfortunate event of your death.
The plan gives:
Financial security for your child.
Annual payments to your family in the event of your demise.
Flexible payment options.
Option to invest in various funds.
There are just 3 easy steps to build your own YoungStar Super Premium plan.
You can choose your protection level and premium as per the limits mentioned below. Things cannot be changed during the policy period.
Premium | Sum Assured | ||
Age less than 45 years | Age 45 years & above | ||
Minimum | Rs.15,000 | 10 x Annualized premium | 7 x Annualized premium |
Maximum | No limit | 40 x Annualized premium |
You may opt for one of the following two plan options, which will determine how your beneficiary will get the benefits in case of a claim:
Death benefit – by selecting the life option
Death benefit plus critical illness benefit - by selecting the life and health option.
The nominee will not have the right to request any fund switch, partial withdrawal, surrender, settlement option, premium redirection, etc.
You have the freedom to choose your investment fund from any of the following four funds designed to meet your risk appetite:
Income Fund
Opportunities Fund
Blue Chip Fund
Balanced Fund
You may also modify your investment fund choices by switching or by premium redirection, as per your need.
Eligibility criteria
Eligibility | Life option | Life & health option |
Minimum entry age | 18 years | |
Maximum entry age | 65 years | 55 years |
Maximum maturity age | 75 years | 65 years |
Minimum policy term | 10 years | |
Maximum policy term | 20 years |
You may use your balance units at the prevailing unit price, in a lump sum or periodic instalments over a maximum period of 5 years, the first instalment falling on the date of maturity. The risk cover shall be maintained at 105% of the total premiums paid during the settlement period.
On your demise during the policy period, the benefit payable shall be determined based on the payment preference chosen by you. The death benefit will be 105% of the total paid premiums.
If you are diagnosed with any critical disease before the policy tenure ends, the payable benefit will be determined based on the payment preference chosen by you.
While you will not be able to withdraw or surrender the money invested in the plan partially or completely till the end of the 5th year, after that, you can withdraw money if you feel the need.
While this HDFC Insurance Plan for Children provides you with the freedom to invest the premium amount paid, there are a plethora of charges, which effectively reduce the corpus invested.
Eligibility criteria | Death benefit options | Maturity benefit options | Minimum | Maximum |
Age at entry | Classic | Option 1 – Aspiration | 0 years (30 days) | 60 years |
Option 2 –Academia | 8 years | |||
Option 3 – Career | ||||
Classic waiver | All options | 18 years | 55 years | |
Age at maturity | Classic | Option 1 – Aspiration | 18 years | 75 years |
Option 2 –Academia | 23 years | |||
Option 3 – Career | ||||
Classic waiver | All options | 33 years | 75 years |
Frequency | Minimum instalment premium | Maximum instalment premium |
Annual | Rs.24,000 | No limit |
Half-yearly | Rs.12,000 | |
Quarterly | Rs.6,000 | |
Monthly | Rs.2,000 |
Minimum policy term | Maximum policy term | Premium payment terms |
15 years | 25 years | · 7 years · 10 years · Policy term minus 5 years |
You may choose from 3 maturity benefit options at policy inception based on your child's financial goals. These 3 options have been illustrated below for a policy with a term of 20 years or more and a premium paying term of 10 years or more.
Guaranteed additions (calculated as a % of sum assured) for policy term <=19 years is 3% p.a. for first 5 policy years, nil thereafter, and guarantee additions for policy term > = 20 is 5% p.a. for the first 5 policy years, nil thereafter.
Year of payout | How much? | Financial goal | Guaranteed payout amount for Rs.5 lakh of SA |
Lump-sum at maturity | 100% of SA + GA (25% of SA) | Wedding expenses or starting a new venture | Rs.6.25 lakh |
Total | 125% of SA | Rs.6.25 lakh | |
In addition to GA, bonuses shall also be paid on maturity. |
SA: Sum Assured on maturity,
GA: Guaranteed Additions
Year of payout | How much? | Financial goal | Guaranteed payout amount for Rs.5 lakh of SA |
5th year before maturity | 30% of SA | To join a professional course | Rs.1.50 lakh |
4th year before maturity | 15% of SA | Course fees for the next 4 years or hostel expenses for your child | Rs.0.75 lakh |
3rd year before maturity | 15% of SA | Rs.0.75 lakh | |
2nd year before maturity | 15% of SA | Rs.0.75 lakh | |
1st year before maturity | 15% of SA | Rs.0.75 lakh | |
At maturity | 15% of SA + GA (25% of SA) | Further education or add on course | Rs.2.00 lakh |
Total | 130% of SA | Rs.6.50 lakh |
Year of payout | How much? | Financial goal | The guaranteed payout amount for Rs.5 lakh of SA |
5th year before maturity | 15% of SA | Higher secondary or junior college | Rs.0.75 lakh |
4th year before maturity | 15% of SA | Rs.0.75 lakh | |
3rd year before maturity | 15% of SA | Graduation | Rs.0.75 lakh |
2nd year before maturity | 15% of SA | Rs.0.75 lakh | |
1st year before maturity | 15% of SA | Rs.0.75 lakh | |
At maturity | 40% of SA + GA (25% of SA) | Higher post-graduate studies or further education abroad or can be used to fund your child's wedding expenses. | Rs.3.25 lakh |
Total | 140% of SA | Rs.7.00 lakh |
You may avail of a loan based on the surrender value of your policy subject to applicable terms and conditions:
The policyholder should be 18 years or older.
The loan amount is available subject to a maximum of 80% of the surrender value.
The interest rate applicable is 14% p.a.
Before any benefits are paid out, the outstanding loan along with interest thereon shall be deducted.
The loan outstanding and interest is more than 90% of the surrender value for a reduced paid-up policy, then the policy will be foreclosed, and the balance paid off.
This HDFC Insurance Plan for Children is ideal for parents who wish to set aside money for academic expenses that occur before college education, for specific goals such as college education or wedding expenses, and for any miscellaneous expenses that occur during school or college.
If you are looking for a plan that is required to fund your child's future, HDFC Life Click 2 Wealth and YoungStar-Udaan are better suited for you from amongst the above explained three HDFC Insurance Plans for Children.
While these plans are expected to provide you with lower returns than an index fund or an equity mutual fund, they come with an added death cover, which will provide your near and dear ones with financial stability.
†Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. The sorting is based on past 10 years’ fund performance (Fund Data Source: Value Research). For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
*All savings are provided by the insurer as per the IRDAI approved insurance
plan.
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
#The investment risk in the portfolio is borne by the policyholder. Life insurance is available in this product. The maturity amount of Rs 1 Cr. is for a 30 year old healthy individual investing Rs 10,000/- per month for 30 years, with assumed rates of returns @ 8% p.a. that is not guaranteed and is not the upper or lower limits as the value of your policy depends on a number of factors including future investment performance. In Unit Linked Insurance Plans, the investment risk in the investment portfolio is borne by the policyholder and the returns are not guaranteed. Maturity Value: ₹1,05,02,174 @ CARG 8%; ₹50,45,591 @ CAGR 4%
+Returns Since Inception of LIC Growth Fund
¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.
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