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A child money back plan is a traditional life insurance plan, with guaranteed money back payments every few years. A child insurance policy also adds to the life cover umbrella of your family and safeguards the milestones in a child’s life.
With a long policy term and a short premium payment term, this child policy offers maximum flexibility with features. Apart from the regular guaranteed cash back, the child insurance policy also adds a bonus to the maturity value. As it is a combination of life insurance and investment, you should buy a child insurance plan to protect the future goals of your child, e.g., their higher education, their wedding, or to help them follow their dreams.
Child money back policy from Canara HSBC Life Insurance has specific and simple to understand features. The policy has a term of 16 years after commencement with a premium payment term of 10 years.
So, if you buy the policy with these conditions, your child policy will work as follows:
Policy Sum Assured (amount payable on death) will be 10 times or higher of your annual premium.
For example, if your annual premium is Rs 1 lakh, your policy sum assured will be Rs 10 lakhs or more.
Pay annual or monthly premiums for 10 years.
The policy will continue without any premiums for 6 more years after the premium payment term.
In the case where policyholder survives throughout the policy term:
15% of Sum Assured will be paid at the end of 5th, 9th and 13th policy years,
The remaining 55% of Sum Assured + Any accrued bonuses will be paid at the end of the 16th policy year
In the case of the early demise of the policyholder, i.e., within the policy term, regardless of the premium payment term, the following benefits will become payable:
Sum Assured + Accrued Bonuses
If higher than Sum Assured, 105% of total premiums paid – Extra Underwriting Premium if applied
The only factor you need to take care of is that all the premiums are deposited in time. Bonus additions to this savings plan are based on a simple reversionary bonus declared every year and payable at maturity.
Child money back plan offers the following features:
Using a child money back policy to fulfil your child’s goals have many advantages, including the following:
Child Money Back Plans will ensure a regular cash flow that can help your child’s educational needs at various life stages. From planning for higher education to sending your kids abroad for future studies, such child insurance plans prove to be beneficial.
Short premium payment tenure means you can relax afterwards as the policy will continue to work for you.
You do not have to be burdened with the long-term premium payment mode. Managing finances will be easier as the child money back policy will continue to provide protection to your child.
You do not pay any tax on the money received from the plan. Thus, you can use the entire amount received from the policy.
Under Income Tax Act, the premiums that you pay and the benefits that you receive are exempted from tax.
Match the milestones of your child’s life with planned cash flows, as such child money back plans offer liquidity in the form of withdrawals. With a partial withdrawal system, you can access funds to fulfil the educational needs of your child from time to time.
Child money back policy from Canara HSBC Life Insurance offers the following benefits to you:
Enhances the financial protection for the family
You can stop paying the premiums just after 10 years. The policy continues with all the cash flows coming in when due.
Life cover provides added financial safety to your family, and especially to your child’s future in case of your early demise.
The premium you pay for the policy is deductible under section 80C for up to Rs. 1.5 lakhs a year.
The payments you will receive from the plan will be tax-free cash flow. Even the bonus added to the maturity value of the policy is tax-free.
A child’s financial needs are not a one-time need. You will need added inputs every few years, at least, during the school years and then finally for the undergraduate course or higher education. Child money back policy provides you with these cash flows.
You need to look at the features and simplicity of the money-back policy to select the best policy for your needs. Or, you can follow the steps below:
Backed by Canara Bank, Punjab National Bank & HSBC
Assets Under Management as per 31st March 2021
In FY 2020-2021
Child money back plans can offer much more than just a one-time child education fund. Usually, education is an expense over a few years and child money back plans can offer an automatic annual cash flow.
Still, if you wish to plan a large lump sum for your child’s higher education dream, you can follow the methods below:
|Child's Age||Investment||Money Back||Bonus Payment|
|24||7,00,000||+ Accrued Bonus|
|25||5,50,000||+ Accrued Bonus|
|26||5,50,000||+ Accrued Bonus|
|27||5,50,000||+ Accrued Bonus|
As a result, your child needs a regular infusion of funds to keep up with the fast-moving goal post. The regular cash flows and guaranteed maturity proceeds can help you meet multiple milestones on the way for your child. Child money back plans are a perfect combination of safety and cash flow to meet your child’s needs.