Things to Consider Before Buying Child Plan in 2026

Written by : Knowledge Center Team

2025-11-06

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Key Takeaways

A child plan ensures your child’s financial goals are met—even in your absence - through features like waiver of premium and maturity benefits.
Choose a policy term and sum assured based on your child’s age and future milestones like higher education or marriage.
Look for flexible premium options, partial withdrawals, and investment flexibility (ULIPs) to suit your financial goals.
Tax benefits under Section 80C and 10(10D) add financial efficiency to your planning.
Canara HSBC Life Insurance offers customisable child plans with loyalty bonuses and tailored features for every parent’s needs.

Every parent dreams of seeing their child thrive, chasing big ambitions, studying in top institutions, and building a secure future. But dreams need more than love, they need careful planning. A reliable child plan becomes important because life might throw tantrums anytime, and the cost of education is rising like skyscrapers.

Remember that the life assured in the policy is the parent on whom the child is financially dependent. The policy continues until the child reaches the age when the funds are needed. Consider a plan that gives you a monthly payout to help you pay regular education fees.

But how do you choose the best one for your child's future? This article has the key points to keep in mind when you are selecting a child plan.

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10 Key Points To Remember While Buying a Child Plan

There are several crucial factors to consider in a child insurance plan to avoid any issues in the future. Let's look at these 10 key points to remember while buying a child investment plan.

1. Waiver of Premium Feature

A 'waiver of premium' feature is important. If the policyholder passes away or becomes disabled, the insurance company will continue to cover the premiums on their behalf. This feature keeps the policy active and secures your child's financial future.

2. Sum Assured and Policy Term

The sum assured and policy terms are two very important aspects to consider while choosing a child plan:

Sum Assured: Pick a sum assured that will cover the financial objectives and provide for your child in the future. The sum assured must sufficiently compensate for your child's significant milestones, including their education, marriage, or other life expenditures. The sum assured estimation should be at least ten times your annual income.
Policy Term: Always verify the policy details to choose a plan that aligns with your child’s major milestones. For instance, if the child is currently 5 years old, pick a policy term of 20 years so it matures when your child is 25 years old.

Did You Know?

Investing in early childhood development can bring up to 13% return each year through improved education, health, and economic results.

Source: UNESCO

3. Flexible Premium Payment Options

Go for flexible premium payment options in your child investment plan. Canara HSBC Life Insurance offers regular, single, or limited payment options. The flexibility is very helpful for you as you can choose a payment plan that lies within your budget and financial situation.

4. Maturity Benefits

The benefits your child gets at the time of maturity are also important to consider in a child investment plan. Some plans provide guaranteed payouts aligned with your child's educational milestones. This feature is very helpful in covering the significantly high costs of higher education for your child.

5. Tax Benefits

Keep a check on the tax benefits that you can get from child insurance plans. Premiums paid are tax-deductible under Section 80C of the Income Tax Act, 1961, and maturity proceeds are tax-free under Section 10(10D).

6. Additional Riders

When you add riders, you will benefit from enhanced coverage of a child insurance plan. Some of the common riders can be critical illness cover, accidental disability cover, and waiver of premium.

7. Partial Withdrawals

Certain plans have a feature where you can take out some of your money after a specific time. When life poses unforeseen costs or emergencies, this is helpful. However, keep in mind that before making a decision, it is critical to understand the guidelines and limitations.

8. Investment Flexibility

Look for what kind of investment flexibility your plan offers. You have the flexibility to decide where to invest your money in a Unit Linked Insurance Plan (ULIP), depending on your financial goals and your tolerance for risk. Thanks to this versatility, you can select funds that suit your financial preferences. It helps you balance the potential for higher returns with the relief that comes with managing risks better.

9. Customisation

Customisation gives you the liberty to tailor certain things within the policy according to your preferences. Canara HSBC Life Insurance has several customisation options for

Policy terms
Premium payment terms
Sum assured

The plan can be modified to meet your unique requirements and financial objectives.

10. Loyalty Additions and Bonuses

In addition to guaranteed benefits, some programs offer bonuses and loyalty enhancements. Throughout the insurance, they may offer more financial advantages.

Get the Best Child Plan from Canara HSBC Life Insurance

So, you know the ten important points to remember before buying a child plan. These factors are important for you to make a well-informed decision. Reviewing child plans carefully against the key factors listed above can help you select a policy aligned with your financial goals. It is advisable to compare features such as premium waiver, tax benefits, and investment flexibility before making a decision.

Glossary

Neuroplasticity: The Brain’s ability to form new connections, especially during early childhood development.
Emotional Resilience: Ability to handle stress and recover from emotional challenges effectively.
Child Insurance Plan: A financial product that secures a child’s future through savings and insurance benefits.
Riders: Optional add-ons to insurance policies offering extra benefits like illness cover or premium waivers.

FAQs

You should begin making plans for your child's future as early as the first few months of life. As soon as they turn 90 days old, you can begin saving for them in a child's plan. Starting early gives you more time to gather substantial funds that are then available to support your child's goals and ambitions.

A premium waiver benefit is that if the policyholder (parent) passes away or gets a permanent disability, all future premiums are waived. Along with this, the policy continues, and the child still receives the planned amount at maturity. This feature really helps your child with the utmost financial security and future goals, even in your absence.

The main benefit of a child plan is the tax cut that was originally provided under Section 80C of the Income Tax Act. Up to ₹1.5 lakh of your total taxable income can be subtracted from the premiums you pay for these policies.

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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