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One of the greatest joys of life as a parent is seeing your children dream beyond their limits. Every smile, every milestone, carries a promise of giving your child the best start in life. While emotional care forms the heart of parenting, financial care shapes its foundation.
One thoughtful decision today can create lifelong stability. Choosing a suitable investment option for a child’s future helps you build savings, secure protection, and ensure their future stays bright, no matter what life brings.
Today, let us help you give the gift of protection to your child by sharing important details about investing in child plans.
Key Takeaways
Early planning helps parents build financial security and peace of mind for their child’s future
A well-chosen child plan protects against inflation and rising education costs
Tax benefits under Sections 80C and 10(10D) make child plans financially rewarding
Choosing the right child plan today can free your child from future financial worry
Why Financial Planning for Children Matters More Than Ever?
Parenthood often changes the way we think about tomorrow. What once felt like a distant future soon becomes a series of milestones that need thoughtful planning. Education, skill development, and global exposure have become cost-intensive goals. As India’s education costs rise by around 8% to 10% annually, a well-thought-out plan is no longer optional.
Moreover, data up to September 2024 shows that there is an outstanding education loan amount of nearly ₹1.3 lakh crore. This illustrates how quickly the cost of higher studies is prompting families to consider borrowing for their children's education.
Starting early helps avoid this financial strain and creates a smoother path for your child’s future dreams. When you plan ahead, you are not just preparing these numbers for funding their studies. Instead, it means that you are preparing a financial backup for them to rely on during unexpected situations. You are building emotional and financial security that lets your child pursue their ambitions without fear of financial obstacles.
How Protection and Planning Work Together for Your Child’s Future?
A child plan is a financial product that acts like a promise a parent makes to their child to support their dreams in every situation. By choosing a plan that combines insurance with market-linked growth, you ensure that your investment continues to grow and remains intact in the long run.
Many child plans also come with a benefit that waives future premiums in the event of the parent's death. The policy remains in effect, and the child receives the full maturity benefit as planned. This feature safeguards the goal from disruption and keeps the promise of supporting their education, career, and life’s other milestones alive.
These plans blend the security of life insurance with the opportunity for growth. For instance, if a parent invests ₹3.5 lakh in a guaranteed child plan today, by the time the child turns eighteen, it can grow into a substantial fund. The savings can then be used to further diversify investments through individual plans.
The balance of protection and disciplined saving ensures that dreams remain intact, even when life feels uncertain.
What are Child Investment and Protection Plans?
Every parent’s financial journey is unique. Some prefer stability, while others look for growth. Insurance-linked child plans are flexible enough to meet these different needs. Here are some common types that new and expecting parents can explore:
Protection-Focused Child Plans: These are ideal for parents who want guaranteed support for their children’s future. The plan offers life cover along with assured payouts, ensuring that financial goals are met even if the earning parent is not present. It is the kind of plan that lets parents rest easy, knowing their child’s future is secure under any circumstance.
Goal-Based Child Insurance Plans: Goal-based child plans help you build funds for specific milestones such as school fees, college education, or higher studies abroad. With features like guaranteed additions, partial withdrawals, and flexible payout options, these plans ensure your funds are ready when your child needs them most.
Growth-Focused ULIP-Based Plans: For parents comfortable with market exposure, ULIP-based child plans bring higher growth potential along with protection. A portion of your premium is invested in market-linked funds, and another part secures life insurance coverage. The flexibility to switch between funds allows you to adjust your strategy as the market changes. Over time, compounding helps create a strong financial foundation for your child.
What are the Key Benefits of Child Plan Investments?
Traditional savings accounts or mutual funds can help you accumulate money, but they cannot provide financial continuity in case of unforeseen events. On the contrary, child plans are essentially designed with life’s unpredictability in mind.
They build savings and ensure that education, marriage, and life goals are met as scheduled, even when situations change. The assurance of protection and maturity benefits makes these plans more reliable and goal-oriented than standard investments.
Here are some of the key benefits that make them one of the best long-term financial decisions for your child’s future:
Power of Compounding: When you invest early, your money has more time to grow and accumulate interest. Compounding multiplies your returns, turning small contributions into a significant fund by the time your child reaches higher education age.
Freedom from Education Loans: A well-planned child policy helps parents stay independent of loans. It ensures that your child begins adult life without the burden of debt.
Tax Benefits: Premiums paid for child plans are eligible for deductions. Section 80C is popularly known for offering a ₹1.5 lakh tax exemption on overall investments, but only under the old tax regime, not the new one. The maturity proceeds are tax-free under Section 10(10D), which is again, subject to prevailing tax laws.
Financial Confidence for Parents: Knowing your child’s dreams are financially secured allows you to focus on nurturing them emotionally. It is one of the most empowering forms of parental care.
Did You Know?
Sukanya Samridhhi Yojana is a government-issued girl child plan which is completely tax-free and falls under the EEE category
Selecting the right child plan requires clarity about your goals and comfort with risk. The right plan grows alongside your child’s journey.
Here’s how you can choose a suitable plan:
Set Clear Goals: Identify what you want to achieve, whether it is funding higher education, supporting skill development, or planning for overseas studies.
Assess Your Risk Apetite: Choose guaranteed return plans for stability or ULIP-based plans for growth potential.
Consider Policy Tenure and Flexibility: Look for plans that align with key milestones and allow partial withdrawals or fund switches if needed
Review Regularly: Revisit your plan periodically to ensure it still matches your evolving goals and your child’s changing needs
How Do We Protect Your Dreams?
When it comes to securing your child’s future, the right financial partner plays a defining role. We offer a variety of plans, including comprehensive term plans, ULIP, guaranteed savings and income plans, etc. They combine reliability, flexibility, and emotional assurance for parents who want to safeguard their child’s tomorrow.
Our Child Insurance Plans help parents build a steady savings fund for their child while ensuring protection. Whether it is school, college, or higher studies abroad, these plans ensure your child’s milestones are met without interruption.
The following is an overview of the features that you may find across our plans:
Guaranteed additions that steadily grow your savings over time
Flexible payout structures that align with your child’s key milestones
Premium waiver benefits that keep the plan active even in unforeseen events
The ability to create a dedicated education or life goal fund with predictable maturity benefits
A Child Care Benefit that keeps your child financially secure until the age of twenty-one
A return of premium benefit if the policy is surrendered voluntarily, as per the terms
Conclusion
Financial discipline plays a big part in parenthood. Starting early with even a modest investment can establish a habit of long-term planning. Making consistent contributions, reviewing your plan, and aligning it with your child’s growth stages ensures that your financial planning stays relevant. After all, every child deserves a future filled with confidence and opportunity.
At Canara HSBC Life Insurance, we understand the emotions behind every parent’s dream. Our child plans, like iSelect Guaranteed Future Plus, are designed to offer a thoughtful balance of protection and growth so that your financial planning evolves with your child’s journey. Our 99.43% claim settlement ratio reflects our promise to stand by families.
Start today with a plan that protects, nurtures, and strengthens your child’s future.
Glossary
Maturity Benefit: The amount received by the policyholder upon completing the policy term
ULIPs: These are life insurance cum investment plans that allow wealth accumulation via market-linked funds and offer life cover
Premium Waiver: A feature that ensures future premiums are waived off if the policyholder passes away untimely
Return of Premium: An optional benefit that refunds all the premiums paid during the policy term if the policyholder survives the term
Claim Settlement Ratio: The percentage of claims an insurer successfully pays out compared to the total received
FAQs
Starting early allows your investments to grow over time through compounding, helping you meet your child’s future goals without financial stress.
They align payouts with key milestones such as education or marriage, ensuring funds are ready exactly when needed.
It ensures that if the parent passes away, future premiums are waived and the policy remains in effect, securing the child’s future as planned.
Yes, disciplined investment through child plans builds a dedicated fund, reducing or eliminating the need for future loans.
Yes, ULIP plans allow you to switch between funds, enabling you to adjust your strategy based on market performance and risk tolerance.
Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.
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