To Buy: 1800-258-5899 (9 am to 6 pm)

|

customerservice@canarahsbclife.in

|

Locate Branch

Login
Search Button

Child Insurance Plan

Child Insurance Plan

A parent’s delight resides in the happiness and success of their children. While you wouldn’t mind spending a little extra for the happiness of your progeny, their success majorly depends on the financial and moral support from parents.

Child insurance plans help you ensure this support for your children while you are there for them and even when you cannot be.

Start your Financial Planning Get A Call Back
×

Get a Call Back

Do you want us to call back Please fill the form below

Get a Call Back

Annual Income (In Lacs)

What Is A Child Insurance Plan?

A child insurance plan is an investment cum insurance plan that offers financial safety of your child’s future by creating a corpus over a period of time. On maturity, child plan pays a lump-sum amount which can be used for your child’s higher education fees and marriage expenses.

While you are building the corpus to fulfil these goals for your child, the insurance plan provides a safety cushion to the corpus in case of your untimely demise. In the unfortunate event of your passing away before fulfilling the goal, the plan can invest the money on your behalf and give the maturity amount you originally aimed for your child.

Thus, child insurance plans are part of broader child-specific financial products, which also include child education plans. Child insurance plans are a mix of insurance and investment products, which ensure the financial security of your child’s future. These plans pay the life cover as a lump-sum amount at the end of the policy term.

Besides the lump-sum pay-out, child insurance plans from Canara HSBC Oriental Bank of Commerce Life Insurance also have periodic payments. These periodic payments coincide with the crucial milestones of your child’s life like education, marriage, etc.

How does a Child Insurance Plan Work?

A child insurance plan helps you to secure the future of your child by ensuring that his goals are met even if you are not there.

Just like any other insurance plan, a child plan also requires you to pay regular premiums. The premiums you pay are allocated to your chosen fund. You can choose various modes available to pay your premiums for the child policy. These are:

  • Limited pay - Pay for a limited time and enjoy the benefits of the policy
  • Single premium - Pay for lump-sum premium for whole policy at once.
  • Regular pay - Pay regularly depending on periods such as monthly, quarterly, yearly.

Case 1: If you survive the policy term

You will be entitled to receive the maturity benefit in this case. This is the fund value that you have created during your time. Depending on your plan, you can either receive the lump sum or convert your sum into a regular pay-out.

Case 2: If you die during the policy

If you do not survive the child policy term, then your child will get the death benefit. This will be higher than the sum assured or the fund value at the time of death.

Types of Child Insurance Plans

Child insurance plan is a widely available financial product and most insurers offer it with different riders to appeal to a wide variety of customers.

Child Endowment Plans

A safe way to guarantee financial support to your child’s goal. Child Endowment Plans offer a safe investment option for your money and guaranteed maturity benefits. These plans are best when you know the amount that you will need for the goal.
Also, with guaranteed benefits and goal protection option you can be sure to achieve the amounts even if you cannot be there for your family.
Endowment plans offers a savings avenue along with a life cover that ensures your financial goals are well-protected even in your absence.

Child Moneyback Plans

Money back plans offer a long-term safe investment option for your investment in your child’s future. Money back plans are best when you will need money over multiple years for the child’s goal, for example, a four-year undergraduate course which needs an annual fee.
Money back plans also offer bonuses to aid the growth of your investment. These bonuses add to your plan’s maturity value.
Money Back Plans are one of the popular options as policyholders enjoy the benefit of having a life cover along with getting a portion of their Sum Assured to manage their expenses.

Child Education Plans (ULIP)

Child education ULIP plans give more freedom to you as an investor. You can choose the amount of risk you want to take on the invested money. You can also use one or more automated portfolio strategies to benefit from market movements even when you are busy elsewhere. Child ULIP plans also offer additional bonuses for long-term investors. You can withdraw money from the accumulated corpus after completing five policy years. Withdrawals are tax-free, so you have the freedom to withdraw any time after the lock-in period.

Our Child Insurance Plans

Invest 4G Plan

Invest 4G Plan

A Unit Linked Insurance Plan (ULIP)

Invest in a diverse portfolio of equity and debt funds

Never miss a market opportunity with automated portfolio management

Boost your corpus growth with Loyalty Additions & Wealth Boosters

Policy returns the mortality charge

Protect your child’s dream with Goal Protection Option

Smart Future Plans

Smart Future Plan

A Unit Linked Insurance Plan (ULIP)

Invest in a diverse portfolio of equity and debt funds

Option to change life cover amount during the policy term

Protect your child’s dream from your untimely death or disability

Manage your investment portfolio automatically

Tax-free partial withdrawals after five years

Jeevan Nivesh Plan

Jeevan Nivesh Plan

Endowment plan with whole life cover option

Add growth to your investment with accrued annual bonuses

Meet your child’s goal and leave a legacy for her with a single plan

Save tax on investment and tax-free maturity value

Future Smart Plan

Future Smart Plan

A Unit Linked Insurance Plan (ULIP)

Invest in a diverse portfolio of equity and debt funds

Manage your investment portfolio automatically

Tax-free partial withdrawals after five years

Protect your child’s dream from your untimely death

Fulfil multiple goals with one investment using Milestone Withdrawal

Money Back Advantage Plan

Money Back Advantage Plan

Three guaranteed money backs

Guaranteed maturity benefit

Add to the growth with a bonus at maturity

Fulfil multiple milestones in your child’s life with a single plan

Limited premium payment term

Save tax while investing and tax-free maturity values

Smart Junior Plan

Smart Junior Plan

Guaranteed annual pay-outs to match your child’s needs

Protect your child’s dream from your untimely death

Faster corpus growth with annual bonuses

Customize the investment and pay out plans as per your needs

Save tax on invested money and tax-free maturity values

Features of Child Insurance Plans

1

Life Cover

Life cover is an integral part of most investment plans from life insurers. Child insurance plan also includes a cover on the life of the policyholder. This life cover will protect the child’s dream in case anything happens to the policyholder during the term of the policy.

2

Goal Protection from Death or Disability

Child plan will continue to invest the due premiums in your child’s goal after your untimely demise. This option ensures that your child can achieve her goal even after your death, without having to pay any extra premiums.

3

Systematic Withdrawals

Child education plans and endowment plans offer the option of systematic withdrawal or automatic payments from the plan in the final few policy years. This allows your child to meet the financial needs which may arise gradually.

4

Bonus Additions

Participating child plans and unit-linked plans offer rewards for staying invested for long-term. While ULIP will add units as loyalty additions and wealth boosters endowment and money back child plans accrue annual bonuses. These bonuses are payable with the maturity value of the policy.

5

Avail Loans & Partial Withdrawals

Child endowment and money back plans acquire cash value after two years of investment. Thus, in case of emergencies, you can take a loan against the policy without having to break the investment. Child ULIPs, on the other hand, offer partial withdrawals after five years of the lock-in period.

6

Riders

Child insurance plans come with a variety of riders. The most prominent add-ons offered with child plans are critical illness cover, accidental death cover and the premium waiver option. Some insurers offer the premium waiver option as an in-built feature. The critical illness cover protects against a set of terminal diseases, while the accidental death cover provides an additional sum in case of accidental death.

7

Choice of Funds

A part of the premium paid for a child insurance policy is invested in market-linked assets. The insurance company provides the policyholder with an option to choose from different funds. The funds invest in equity, debt or money market instruments.

8

Premium Waiver Benefit

An important feature of child insurance plan is the premium waiver benefit. In case the policyholder dies in a stipulated duration, the beneficiary gets the sum assured and the insurance company continues to pay the remaining premiums till the maturity date. Invest 4G provides three benefit options, with the premium funding option being one of them.

9

Lump Sum Benefit

After your death, the death benefit is provided in a lump sum, i.e., the whole amount in a single payment. In Child education plans such as Smart Junior Plan, you receive guaranteed pay-outs, in a lump sum, starting from the last 5 years of the policy. This can be used to pay off any debts or loans you left unfulfilled.

Why do you Need to Buy a Child Insurance Plan?

Child insurance plan is an investment option designed to serve as a wallet for major life goals of a child. Be it higher education, hobby, or marriage child insurance plan gives you the benefit of investing, growing and using your money as per your child’s needs.

If you mean to provide for your child’s education goals the plans can work as child education insurance. The plan will help your child achieve the goal even if you cannot be there.

Few more important reasons to get going with a child insurance plan at the earliest are:

  • Beat the inflation in higher education costs with investment as per your risk appetite using automated portfolio management options
  • Prepare for an unexpected expense with additional corpus for your child’s goal with bonuses and additional units
  • Stop the unfortunate events like death and disability from harming your child’s future and plans
  • Face financial emergencies or change of plans with partial withdrawal and loan facility from the plan
  • Keep your child’s investment corpus safe from taxes with tax-savings while investing and withdrawals
Benefits of Buying a Child Insurance Plan | Buy the Best Child Insurance Plan

Benefits of Buying the Best Child Insurance Plan

  • Corpus for Child's Education

    The schools and the education system have been getting more and more advanced. Due to this, their fees are constantly rising. For higher education, the cost is even more. So, it becomes important to plan, the education of your child keeping in mind the huge costs.

    That’s where a child education plan can help you. The premiums you pay over a period of time are invested and can help create a corpus that will be sufficient to meet your child’s education goals such as post-graduation and studying abroad.

  • Takes Care of Medical Expenses of Child

    The primary focus of a child insurance policy is to safeguard your child's future. But this is not the only way a child plan can help you. It can come to your rescue in between the policy as well. Plans such as Canara HSBC Oriental Bank of Commerce Life Insurance Invest 4G have an option of partial withdrawals.

    These allow you to withdraw from your corpus when in need. These are also tax-free. These can help you in emergencies such as health issues of your child, accidents that can dig a hole in your pocket.

  • Financial Support to the Child in the Absence of Parent

    Even if you think that you will have enough to fulfill your child’s goals, life is unpredictable and preparation is better. So, how do you ensure that your child’s goals are financially protected, even if you are not there?

    Child education plans come with a life cover and premium protection. Your family is provided with a lump sum death benefit. Also, premium protection features in Child plans make sure that your family doesn’t have to worry about the premiums as they will be waived off and paid by the company.

  • Income Protection Cover for the Child

    Lump-sum money will help you take care of the large expenses. But there are other regular expenses that happen more frequently. When you die, your income also stops. This can affect you even more when you are the only breadwinner for the family.

    Many child insurance plans offer you regular payout as well. After your death, your child will receive a monthly sum. This can help replace your income and makes sure your child doesn’t suffer.

  • Acts as Collateral for Higher Education

    Child insurance plans are often considered as an asset. This builds strong cash value over time. You can also use your child policy as collateral at the time of the loan. Almost all the banks approve of child plans as collateral. This will help you secure a loan for your child for his education or even for his marriage later on.

  • Modification in Sum Assured

    Some insurers allow the insured to increase the sum assured mid-way through the policy term without any change in the premium. Changing the Sum Assured as per your life stages and financial milestones can help you in staying aligned with your goals.

Documents Required to Buy a Child Insurance Plan

It is the form where all the policy-related information is entered.

Any government-issued document such as passport, driving license, Aadhar card, electricity bill, that can be used as the proof for address.

The individual buying the policy has to produce documents to prove that he has sufficient income to pay the premiums.

Any document such as PAN card, Aadhar card, driving license, Voter ID that can be used to establish the buyer’s identity.

The buyer’s passport, birth certificate, or 10th and 12th mark sheets can be used for age proof.

Tax Benefits with Child Insurance Plans

Tax-Deductible Investment

Child insurance and education plans are life insurance plans. Thus, the money you invest in these plans is deductible from your taxable income under section 80C of the Income Tax Act. Every year you can claim a deduction of up to Rs. 1.5 lakhs by investing in these plans.

Tax-Exempt Partial Withdrawals

After the respective lock-in periods (for different types of child insurance plans) the ULIPs may allow partial withdrawals while other plans acquire cash value. So, in case of an emergency, you can withdraw money from the child plan without stopping your investment. Also, any payments made by the plan before maturity, as in endowment and moneyback child plans, are exempt from tax.

Tax-Free Maturity Value

Maturity proceeds from child education plans are also tax-free under section 10(10D) of the income tax act. Only two of the following conditions may apply after the Union Budget of 2021:

- The annual investment should not exceed 10% of the life cover in the plan

- In the case of ULIP child plan, the total investment (including other ULIPs) should not exceed Rs. 2.5 lakhs in a year (only applicable to plans starting after 1st Feb 2021)

How much Should you Invest in a Child Insurance Plan?

Before buying a child insurance plan, you must be sure of how much you should invest. Education, as we know, is getting costlier with each passing year. School fees are rising constantly. Also, if you want your child to go for higher education in the field of engineering or medical etc, then the cost is even more.

Thus, to make sure your child is able to pursue what he wants, your income may not be enough, and you need to invest in a child education plan as well. But how much should you invest?

Well, this depends on the education you are targeting. Though it is difficult to know what your child would want to pursue, it is better if you have an idea.

Here are the steps you should follow to know how much to invest:

  • Ascertain the goal you want to achieve
  • Estimate the inflation rate at the time the child will attain education age
  • Estimate the expected rate of return of the policy.

For example, suppose, you are planning for an MBA for your child, 10-15 years from now it may cost somewhere between Rs 40-50 Lakhs in India. You will need to invest approx. Rs 15,000 per month for 15 years, assuming the rate of return is @8%. Education is one area with one of highest inflation rates. Thus, it becomes even more important to plan for your child’s education as early as you can.

What is Not Covered in a Child Education Plan?

There are certain things in the child insurance policy that are excluded from the policy. This means that these things are not covered and the insurance company will not provide any benefit if death is due to anything that is excluded.

Suicide Exclusion

If the death is due to suicide or self-harm. Under plans such as Invest 4G, if the death is due to suicide within 12 months of commencement of the policy, then 80% of the premium paid or surrender value is paid.

Death Due To Drug Overdose

If you die due to consumption of drugs that are not prescribed or excessive intake of alcohol, then also no death benefit is payable.

Death Due To War

If you die due to war (declared or not) or any type of civil commotion, your family will not receive the death benefit.

Hazardous Activities

There are certain adventure sports that pose a risk to life such as sky diving, mountaineering, scuba diving, etc. If you die due to participating in these games then your coverage ceases to exist.

Taking Part in Criminal Activity

If you die during indulging in any activity that is considered criminal or illegal, then this will also not be covered in your child insurance plan.

How to Get the Best Child Education Plan?

The best child education plan for you should be the one that can solve your purpose in the most optimum way possible. There are some factors that should be considered before you decide to buy a child plan.

Premium Protection Option

If this feature is present in your child plan, then your premiums will be taken care of even after you die. The company funds all the premiums that remain to be paid after your death under this option. Thus, the policy continues even after your death and your child will get the maturity benefit as promised by the company.

This feature makes sure that your family does not have to worry about the premiums.

Option to Add Riders

Riders are the additional benefits offered over and above the policy which enhance the scope of your existing policy. Riders cover those things that are not covered by the base policy. Some of the most popular riders include the following

  • Critical illness rider
  • Accidental death benefits rider
  • Accidental total & permanent disability rider

Though some riders are added by default in some policies, some add to the cost of your premium.

You should choose the policy that has the most rider options available to get the best from your policy.

Loan Availability

The best child plans also have the facility of loan. This means you can use your child insurance policy as collateral to finance a loan.

You can take the loan for your child as well as for yourself by using your policy as collateral.

Partial Withdrawals

A partial withdrawal facility allows you to withdraw money from your fund. This comes in handy in the time of emergencies when you are in the need of quick cash.

You should look for the policy that provides you the option of partial withdrawals. Policies such as Canara HSBC Oriental Bank of Commerce Life Insurance Invest 4G offers you this option. Partial withdrawals made after the lock-in period of 5 years are tax-free as well.

Flexible Payment Options

There should be multiple options provided to you in which you can pay your premium. You must be able to pay as you like. Many policies have the option of limited payment. This means you pay your premiums for a limited time and enjoy the benefits of the policy for a long.

For example, Smart Junior Plan has a limited payment facility. If you have chosen a policy for 20 years, then you have to pay up to 10 years only.

Regular Pay-Out

The purpose of the child insurance policy is to provide your child with the money which will help in his education or other goals. This money should be present when needed.

Plans such as Invest 4G has the option of systematic withdrawals that makes regular withdrawals from your fund. This helps create a regular income stream.

Charges Associated with the Policy

This is also an important factor to look for before you buy a policy. The insurance provider levies charges on the maintenance of the policy. Some of the charges associated are:

  • Fund management charges
  • Premium allocation charges
  • Administration charges
  • Switching charges

Choose the policy that has the lowest charges involved.

How a child insurance plan will secure your child's future?

No parent wants to leave his/her child in the cold, but you will not be able to secure your child’s future just by having intention.

1. Endowment plans

A child insurance plan helps you create a corpus for your child’s needs. Having adequate funds in times of need is critical for your child’s growth. With premium funding option, your child’s future will be secure even if you meet with an unfortunate incident.
Buy an endowment policy as soon as possible to cater to the needs of your child. The best time to buy an endowment plan is now.

2. Money-back plans

If you have to save Rs 12,000 in a year, it is better to save Rs 1,000 every month rather than Rs 6,000 in the last two months. A child insurance plan helps you maintain discipline while saving for your child’s future. With the monthly payment tenure of Invest 4G plan, you can set aside small amounts for your child’s future.

3. Unit-linked insurance plans

Children are delicate and often fall ill. Child insurance plans provide an option for partial withdrawal of funds without surrendering the policy. The partial withdrawal facility can be used for medical treatment of the child.
A ULIP can help you stay prepared for the unforeseen future in case something happens to you. So, it can be said that ULIP is a good form of investment if you have a resilient financial plan.

FAQs Related to Child Insurance Plan

The importance of a good education cannot be overstated. Without quality education, a child may not reach his/her full potential. But the rising cost of education can become an impediment in higher education. A child education plan ensures that you do not have to worry about the money for your child’s education. It is a mix of insurance and investment. A part of child education plan is used to provide the financial security of insurance, while the balance is invested in market-linked instruments. The investible portion delivers decent returns in the long run, helping you accumulate a corpus for your child’s education.

There are three major rider benefits provided with child insurance plans.

  • Premium waiver benefit
  • Accidental death and disability cover
  • Critical illness cover
  • Any parent with a child between 0-15 years should opt for a child insurance plan. It helps you deliver inflation-beating returns for the various needs of the child while he/she grows up. As a child grows up, his/her financial needs increase substantially.

    Child plans are meant to build a financial buffer for your child’s future needs, so, it is important to have a fail-proof plan. A few things to consider while buying child plans are:

    • Goal: It is pertinent to have a clear goal in mind as it determines the type and tenure of the policy. You should invest in a child plan as soon as the child is born. Starting early gives your investment to grow and helps you prepare better for your child’s needs. Similarly, selecting a long-term policy protects your child for a longer-term.
    • Premium waiver: While buying a child plan, it is mandatory to check if the premium waiver facility is available or not. Not having a premium waiver option can leave your child vulnerable in your absence.
    • Inflation: When you are investing for the long term, external factors like inflation cannot be ignored. Invest in ULIPs to generate inflation-beating returns. Invest 4G plan offers customers an option to choose from seven different funds with varying degrees of exposure to equity.
    • Bonus component: Along with the basic benefits of a child plan, insurance companies also offer additional benefits. Even though these benefits are small, they could add value considerably in the long run. For instance, Invest 4G plan provides benefits such as wealth boosters, loyalty additions and return of mortality charges.

    The eligibility to open a child education plan is similar to a child insurance plan. The entry age is generally between 18 and 65 years. The maturity age is between 23 years and 80 years. You can start investing in a child education plan with Rs 5,000 per month or Rs 50,000 per year. The policy tenure varies between 5 years and 30 years.

    The right time to buy child plans depends on the financial goal and the type of policy. Child insurance policies are long-term instruments and to generate decent returns it is advisable to invest as early as possible. You can invest in child insurance policies even before the child is born. Child education policies are relatively short-term policies. Child education policies can be chosen according to the financial goal. You can invest in child education policy as soon as the child is born if you plan to fund his/her primary and secondary education through the policy. If the aim is to accumulate funds for the higher education of the child, then you can invest at a later stage. In any case, it is not advisable to invest after the child has turned 15.

    While the cost of insurance depends on a host of factors such as tenure, coverage and the mode of payment. With Invest 4G plan, you can start investing for the financial future of your child with just Rs 5,000 every month. However, if you are not clear about the cost of insurance for your child, you can use the ‘life insurance calculator’ in the ‘tools and calculator’ section of www.canarahsbclife.com. Similarly, you can use the ‘child education planning calculator’ to get an idea of the cost of child education plans.

    To choose the ideal child insurance plan, you will have to start with planning the various stages of the plan and your child-specific milestone payments.

    • Paying capability: Just investing in a child insurance plan is not enough, you will have to pay the premiums regularly and timely to keep the policy active. Make a correct estimate of your paying capability and decide the premium payment frequency.
    • External factors: While buying a child insurance plan, consider the external factors such as inflation and interest rates before finalising the maturity benefit.
    • Premium waiver: The premium funding facility is a crucial feature for the success of the child insurance plan. Not having the premium waiver facility can leave a costly chink in your child insurance armour.

    There is no universal minimum instalment for a child education plan. Every insurer has its own minimum limit, even different plans have a different minimum limit. Invest 4G plan has a minimum limit of Rs 5000 if you choose to pay monthly premiums. The minimum premiums for quarterly and half-yearly payment tenures are Rs 15,000 and RS 30,000, respectively. In the annual mode, the minimum premium is Rs 50,000.

    One of the defining features of child education policies is the partial withdrawal facility. Most insurance companies allow partial withdrawal from child education plans to take care of liquidity needs. Invest 4G plan allows partial withdrawal after the 5th policy year.

    Child education plan can either be unit-linked or non-linked. The interest rate of ULIPs is determined by the fund chosen by the policyholder and the performance of the market. The interest rate for non-linked child education plan is decided by the insurance company.

    The policy for premature closure of child education plan deposit differs from insurer to insurer. Some insurers allow premature closure of child education plan deposit. If the account is closed before the lock-in period expires, the fund’s value minus the surrender charges id deposited in the discontinued policy fund. The amount earns a minimum of 4% interest and will be paid to you after the lock-in period gets over. It the policy is surrendered after the lock-in period, the total fund value minus the surrender charges will be given to you. But premature closure of child education plan can be fraught with risks and you may not achieve the stated aim. Invest 4G plan allows you partial withdrawals without surrendering the policy, which essentially disincentivises premature closure of the policy.

    You can avail a secured loan against a child education plan. The loan can be used to fund the higher education of the child.

    When you buy life insurance, the insurance company asks for the nominee details. Only the person named as the nominee in the policy can cash out a life insurance policy in case of death of life insured.

    While there are several child plans in the market, the Invest 4G plan is the best of the lot. Invest 4G with its unique proposition provides all-round protection to your child. With the online ULIP plan , you can decide the premium payment tenure and also the settlement option.

    Getting insurance required a visit to the bank or the insurer’s branch earlier. But with the popularity of online ULIP plans, getting an insurance plan has become extremely easy. You can buy a host of insurance products directly from www.canarahsbclife.com and get discounts on the premium from the company.

    Online Plans Pay Premium Get a Call Contact Us