Child Plans Emerging In The Indian Insurance Market

Buying insurance plans for infants and young children has become like a trend budding everyday thus, making a significant comeback in the Indian insurance market. Rishi Piparaiya, director- marketing and sales, Aviva Life Insurance believes that the increasing education cost has grown up the sensitivity among young parents about insuring their child’s future. He explained it with an example stating the fee of a reputed medical college would be around Rs 2 crore after 10 years from today.

Investing in your child's future:A wise decision & a loving choice

Benefits of Investing In Child Plan

Waiver of Premium Benefit

Future Premiums are paid by the insurer upon death of policyholder

Flexible Payout Options

Your premiums help your child achieve their dreams through lump sum or regular payouts

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Tax Benefits^

You get tax benefits under Section 80(C) and no tax on returns under Section 10 (10D)

Investment Flexibility

It offers the flexibility to invest at regular intervals or as a one-time contribution

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Nothing Is More Important Than Securing Your Child's Future

Invest ₹10k/month your child will get ₹1 Cr^# Tax-Free* on Maturity

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We are rated^~

7.7 Crore

Registered Consumer

Insurance Partners

4.2 Crore

Policies Sold

Disclaimer: #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 @ CAGR 8%; ₹50,45,591 @ CAGR 4%. *Tax benefits and savings are subject to changes in tax laws. All plans listed here are of insurance companies’ funds.

He added that self-employed class is expected to bring-in larger demands marginally in comparison to salaried class. Also, Aviva India is planning to launch more such plans.

Child insurance, unlike life insurance term plan, pays the death benefit if case of policyholder’s demise and with the balance premium paid by the insurer, the policy continues. Child plan can be purchased as a ULIP or traditional plan. In case of traditional plan, there are fixed returns at the time of maturity or at fixed intervals whereas, ULIP can either cover the child or the parent.

According to the certified financial planners, ULIP is expensive in comparison to other instruments as it has higher premium investment, policy allocation charge and deductions of around ranges between 5%-7% (first year only).

Managing director and CEO of PNB MetLife, Tarun Chugh informed that they have a ULIP child plan and are planning to launch a unique traditional child plan in some time.

He added that life insurance plans are the most preferred ones because of the financial protection offered by them to a family and acts as a good mode of saving for child future education. He believes that insurance ensures corpus an individual has decided for their child’s future which would help him grow irrespective of their presence. 31-40 years is the major age bracket of parents investing into child plans as revealed by Mr. Chugh.

†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.
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^^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.