5 Best Child Insurance Plans in India

In India, the rising inflation has made the upbringing of a child very difficult. Well, you have two options to deal with this situation- either begin to save for your kid’s future on your own, or purchase the best child insurance plan from a trustworthy insurance company. These plans are designed to provide monetary support to your little champ, whenever there are critical circumstances like illness, higher education, and marriage.

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Here is the detailed information about the five best insurance policies in India.

1.  Aviva Young Scholar Advantage

It is a ULIP (Unit Linked Insurance Plan). This plan is best for those parents who are life- insured. Although, it doesn’t cover the child’s life, but offers security of the kid’s future, even if anything happens to the parent. The child would get the Sum Assured, to meet the instantaneous requirements of the family, in case of the demise of the parent. The company would pay the future premium in such a manner that the Fund Value will also be given out, at the time of maturity of the policy.

Key Features:

  • Besides accidental death benefit rider, this plan offers three additional riders- child education rider, term plus rider, and comprehensive health benefit rider.
  • From the end of the 11th policy year, loyalty additions are added.
  • Along with 9 investment funds, the policy also offers two investment options- automatic asset allocation and systematic transfer strategy.

Benefits of the Policy:

  • You will get a rebate in income tax.
  • The policy holder will get the Fund Value on maturity of the plan.
  •  In case of casualty (i.e., death of the parent), the nominee (child) will get loyalty benefit and Sum Assured as Immediate Death Benefit. Moreover, the company will pay the future premiums in a lump sum, and on the maturity of the tenure, the child would receive the Fund Value.

2. Bharti AXA Life Future Champs

It is a traditional money back child plan. In this plan, if the parent (the Life Insured) dies within the policy tenure, the child will get the sum assured to deal with the pressing requirements of the family. Though the future premiums are waived, the survival benefits are paid- out to the kid, on maturity of the plan.

Key Features:

  • The guaranteed payback benefit amounts to 105% of promised sum assured.
  • You can opt for how much and when you want your money, totally up- to 105% of the sum assured.
  • The total payback amounts to 109% of the sum assured.
  • On earlier death of the parent or time of maturity of the policy, the child will get terminal and annual bonus, along with guaranteed welcome additions (it is 4% of the sum assured).
  • The policy offers an additional rider i.e., the critical illness benefits.
  • For higher sum assured, discount is available.

Benefits of the Policy:

  • Survival Benefit
  1. Pay Back Option 1-
    1. 12th Year- twenty percent of the sum assured
    2. 13th Year- twenty percent of the sum assured
    3. 14th Year- thirty percent of the sum assured
    4. 15th Year (Maturity)- thirty five of the sum assured
  1. Pay Back Option 2
    1. 10th Year- ten percent of the sum assured
    2. 12th Year- twenty percent of the sum assured
    3. 14th Year- thirty five of the sum assured
    4. 15th Year (Maturity)- forty percent of the sum assured
  • Income Tax Benefit

You can get a rebate in income tax on premiums paid- up to one lakh rupees.

  • Maturity Benefit

On maturity, the child will get terminal bonus (if any), annual bonuses, guaranteed welcome addition, and guaranteed pay back benefit.

  • Death Benefit

In case, the parent dies prior to maturity of the policy, child would receive guaranteed welcome addition, sum assured, terminal bonus (if any), and annual bonuses as immediate death benefit. The prospective premiums will be waived. Also, the kid will be entitled to future benefits.

3.  Birla Sun Life Insurance (BSLI) Bachat Child Plan

It is a conventional, non-participating, and endowment child plan. In this plan, no bonus is declared, and the returns are guaranteed. The parent is the Life Insured, and the child’s life is not covered. The child will get the sum assured as immediate benefit if anything happens to the parent during the policy tenure. The insurance company would pay the future premiums, such that the maturity benefit is paid out whenever it is due.

Key Features:

  • A parent can apply for this plan till 50 years of age.
  • You may pay a monthly premium from Rs. 400 to Rs. 3000. The sum assured is equal to 180 times of the monthly premium.
  • Depending upon the entry age and premium amount, loyalty additions are also paid.
  • Along with waiver of premium rider, accidental death benefit rider is also available.

Benefits of the Policy:

  • Under section 80C, you can get a rebate in income tax, on premiums paid up to Rs. 1, 00,000.
  • On maturity of the plan, the policy holder will get earned bachat additions, all paid monthly base premiums, and loyalty addition.
  • In case of demise of the parent, the child will obtain the sum assured as immediate benefit. The potential premiums are waived, and the maturity benefit is paid out at maturity of the policy.

4.  Kotak Child Advantage Plan

It is a traditional participating plan, in which the child’s life is insured. After deduction of charges, the premium amount is credited in the Accumulation Account. As per the norms of Insurance Regulatory and Development Authority (IRDA), the amount is invested. The returns (i.e. Bonus) are also credited in the Accumulation Account. As the child’s life is insured, the policy continues even after the death of the parent. The premiums are paid by the company if life guardian benefit rider has been taken. The policy gets terminated in case of child’s death within the tenure of the policy, and the death benefit is paid. Higher accumulation amount or sum assured is remunerated on the maturity of the plan if child survives.

Key Features:

  • The child’s life is insured.
  • The maturity or the death benefit is the higher of accumulation amount or sum assured.
  • Accumulation account is equal to the amount invested in several financial instruments (as per IRDA norms).
  • Automatic cover maintenance facility is offered by this policy. It means that the policy will not be terminated, even if you miss paying a premium, after the first three year premiums have been paid.

Benefits of the Policy:

  • Income Tax Benefit

You can get relaxation in income tax on premiums, paid up to Rs.1, 00,000.

  • Maturity Benefit

On maturity of the policy, the higher of the accumulation account or sum assured will be paid.

  • Death Benefit
  1. The policy will not lapse, even if the parent dies.
  2. The future premiums are paid by the company, in case you have opted life guardian benefit rider.
  3. If, when the child is deceased, his/her age is 18 years or more, and the policy has been in existence for five years, as on the date of death, the death benefit will be equivalent to the higher of accumulation account or sum assured.
  4. In case, the demise of the child happens within five years of the begining of the plan and at the time of death, the kid is less than 18 year old, the death benefit will be equivalent to the higher of surrender value or total of premiums paid till date.

5.  LIC Jeevan Anurag Plan

This plan is designed, exclusively, to pay attention towards your child’s educational requirements. The policy offers you death benefit and assured benefit. The sum assured is paid instantly to the nominee (the child), if the life insured (the parent) dies. During last three policy years before maturity, twenty percent of the basic sum assured would be paid at the beginning of every year, irrespective of whether the parent is alive or not. On maturity, the bonus and the rest 40 % of sum assured would also be paid.
Key Features:

  • It is a double benefit plan.
  • On maturity, the policy holder will get forty percent of the sum assured and bonus.
  • Prospective premiums are waived off, in case of early death.
  • Accidental death and disability benefit rider, premium waiver benefit rider for critical illness and critical Illness rider are available.
  • This LIC plan offers large sum assured rebate.

Benefits of the Policy:

  • Under section 80C, premiums paid up to one lakh rupees are allowed as a rebate from the taxable income, every year.
  • Before maturity of the policy, the life insured gets twenty percent of the basic sum assured, at the commencement of each year, during last three policy years if he survives.
  • The nominee or life insured receives forty percent of the sum assured and the bonus, on maturity.
  • The nominee would obtain the sum assured right away, after the death of the life insured.

Choose the policy that suits you the most!

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