HDFC Child Plan Fixed Deposit

In this article, we are discussing three HDFC insurance plans for children, which shall help you in achieving your financial goals.

HDFC Life Click 2 Wealth

It is a unit-linked plan that provides you with three plan options to choose from depending on your investment needs:

1. Invest Plus

   This option provides life coverage and takes care of your investment requirements by providing accrued fund value when the policy matures.

2. Premium Waiver

   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. 

3. Golden Years Benefit

   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

Sum assured

You have the option to choose the sum assured under the policy as follows:

Benefits available under the policy

1. Maturity benefit

   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. 

2. Death benefit

   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. 

   Investment

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3. Additional benefits

   1. Minimum number of charges

      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).

   2. Return of mortality charges (ROMC)

      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.

   3. Special addition

      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.

YoungStar-Super-Premium

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.

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

Benefits under the plan

1. On maturity

   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. 

2. On death

   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. 

3. On critical illness

   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. 

4. By partial withdrawal

   While you will not be able to withdraw or surrender the money invested in the plan partially or completely till the end of the 5^th 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.

YoungStar-Udaan

1. Eligibility criteria

   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

2. Premiums

   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

3. Premium payment terms

   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.

1. Option 1: Aspiration

   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

2. Option 2: Academia

   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

3. Option 3: Career

   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

Loan under the policy

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. 

In Conclusion

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.