Written by : Knowledge Centre Team
2026-07-29
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7 minutes read
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As a parent, one of the most important obligations is to fulfil the educational goals of your child, so they can go on their way to fulfil their aspirations. Although you can invest in any of the several long-term investment options available, child plans could still be the best investment plan for your child’s future.
Your children are the biggest hope of your life. One of the most fulfilling goals of your life is to see your children accomplish their aspirations. With education costs soaring due to high inflation, funding higher studies is becoming increasingly challenging. To ensure a safe future for your child, start investing early and consistently invest in the best child insurance plan for a long period.
Key Takeaways
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Why Invest in a Child Insurance Plan?
When it comes to providing for the higher studies of your children, you need your life’s savings to work harder. The best child insurance plans can provide you with the much-needed financial assistance for your children’s education and other goals:
- A child insurance plan serves a dual role of protection and a savings plan. It gives life cover and increases your savings corpus, which you can use for your child's long-term needs
- You can get a lump-sum amount for your child's educational needs when your policy matures or even if any mishap occurs with you
- The protection element of a child insurance plan builds a safeguard to make sure your child’s future isn't hampered if anything happens to you
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Types of Child Insurance Plans
There are 3 broad categories of a child's education plan:
- Endowment Child Plans: This is a very safe avenue to allocate your funds if your motive is to get guaranteed savings benefits to support your child’s needs. These plans are suitable for you if you are sure about how much you need. For example, saving ₹50 lakhs for the goal of sending your child abroad for higher studies.
This is because the child endowment plan provides you with a safe investment option that offers an assured amount on maturity.
- Moneyback Child Plans: If you wish to receive certain amounts at various stages of your child’s growth, the money-back child education plan is the best option. It offers fixed instalments of your sum assured at regular intervals as selected by you in the form of cashbacks.
Such child insurance plans are also suitable if you need a certain amount over multiple years of your child’s education. For example, a 5-year integrated MBA program involves payment of an annual examination fee.
Apart from that, money-back child plans are participating plans, i.e., they offer bonuses to you that add to your maturity amount.
- ULIP-based Child Education Plan: If your motive is to get a high growth rate and more flexibility for your portfolio, then you can go with the ULIP-based Child Education Plan. These are investment plans that allow you to invest as per your investment risk appetite. You can choose the type and ratio of your investment between equity, debt, mutual funds, and hybrid funds.
Besides, you can rearrange your portfolio with an auto-rebalancing strategy if you wish to use market fluctuations to your benefit. The ULIP-based Child Education Plans additionally offer extra loyalty bonuses if you continue with your policy in the long term.
Canara HSBC Life Insurance Promise4Growth Plus is one such lucrative plan that offers complete freedom to investors to allocate the funds in various portfolios. Additionally, it offers three cover options for different life stages of your child.
How Does a Child Insurance Plan Ensure Your Child’s Future?
Child insurance plans work in a very systematic way to serve the dual goals of giving you a life cover as well as providing you with a certain maturity amount for your child’s goals.
- Life Cover: A child education plan has two important elements – a life cover that your family shall receive in case of untimely demise, along with a certain assured maturity amount that you receive at the end of the policy term if you survive the policy term. These 2 elements are common to all 3 types of child insurance plans.
- Premium Protection Feature: Premium Protection is a feature that ensures continuity of the investment, even in the case of your early demise. If you opt for the Premium Protection plan, your insurer will pay all your remaining premiums in case you pass away within the policy term. At the end of the policy, your insurer will pay your family the maturity value. The Premium Protection Plan is offered by all three types of child plans.
- Bonus Additions: Child insurance plans often reward long-term commitment through various forms of bonus additions. These benefits differ based on the type of plan:
Participating endowment and money-back plans offer annual bonuses such as reversionary bonuses and terminal bonuses, which are declared based on the insurer’s performance. While endowment plans accumulate these bonuses throughout the policy term, money-back plans may offer bonuses along with periodic payouts, though these are typically not guaranteed.
Unit-linked insurance Plans (ULIPs) do not provide traditional bonuses. Instead, they may offer loyalty additions and wealth boosters, which are additional units added to your fund value at regular intervals, provided certain conditions like continued premium payment and policy duration are met.
All accrued bonuses in traditional plans are paid out at the time of maturity, along with the maturity amount. In ULIPs, loyalty additions and wealth boosters enhance the fund value and are also payable at maturity.
These maturity proceeds are generally tax-exempt under Sections 80C and 10(10D) of the Income Tax Act. However, for ULIPs purchased on or after 1 February 2021, if the aggregate annual premium exceeds ₹2.5 lakh, the maturity amount becomes taxable (except in the case of death benefits).
- Partial Withdrawal: Endowment Child Education Plans come with the option of systematic withdrawal from the policy in the last few years before the end of the policy term.
Canara HSBC Money Back Advantage Plan comes with a policy term of 16 years and a premium payment term of 10 years. It offers regular payouts of 15% of the total sum assured, at the end of the 5th, 9th & 13th policy year. Finally, at maturity of the policy, you will receive a guaranteed lump sum amount, which shall be equal to 55% of the total sum assured, along with accumulated bonuses at simple rates.
In the case of a ULIP Child Plan, you can easily opt for complete withdrawal from the policy with all your accumulated investment corpus, but only upon completion of at least 5 years of the policy term. This withdrawal shall be tax-free, offering you the flexibility to withdraw at any point in time.
Child Insurance Plans by Canara HSBC Life Insurance
Child insurance plans such as the iSelect Guaranteed Future from Canara HSBC Life Insurance offer safety to your child’s goal with multiple investment options. Even in the case of your early demise, your child’s goal will remain unaffected, as:
- The insurer will give your family the guaranteed death benefit.
- They will pay the remaining premiums till the maturity of the policy.
- At the end of the policy term, your family shall get the maturity value.
This way, the child education plans ensure continuity of the investment even after your untimely demise. Now, you can easily understand how a suitable child education plan is the best investment plan for your child’s future.
Wrapping Up
Preparing for your child’s future in the present era has become a necessity. With the steep rise in education costs, relying solely on savings may not be enough. A child insurance plan provides a structured way to save for long-term goals and also ensures your child’s dreams remain protected, even if life takes an unexpected turn.
Whether you opt for a guaranteed endowment plan, flexible moneyback plan, or high-growth ULIP-based Plan, choosing the right policy tailored to your needs can give you peace of mind.
Plans like those offered by Canara HSBC Life Insurance are designed to adapt to your child’s growing needs while providing essential financial security.
Start early, choose wisely, and watch your investment grow with your child.
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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Child Insurance - Top Selling Plans
We bring you a collection of popular Canara HSBC life insurance plans. Forget the dusty brochures and endless offline visits! Dive into the features of our top-selling online insurance plans and buy the one that meets your goals and requirements. You and your wallet will be thankful in the future as we brighten up your financial future with these plans.
Fixed Returns, Zero Risks & Worries
iSelect Guaranteed Future Plus
- 4 Plan options
- Life cover + Guaranteed benefits
- Accidental death benefit
- Premium protection cover
Don't Just Survive, Thrive
Guaranteed Assured INcome
- 3 Plan options
- Life cover + Guaranteed income
- Get Total Premiums at maturity
- Early income from 2nd policy year
Save, Dream, Plan. Live Peacefully
iSelect Guaranteed Future
- 5 Plan options
- Option to choose PPT
- Get Tax benefits
- Premium protection cover
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