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What is a Child Money Back Plan?

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.

How does a Child Money Back Policy Work?

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:

  • 1

    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.

  • 2

    Pay annual or monthly premiums for 10 years.

  • 3

    The policy will continue without any premiums for 6 more years after the premium payment term.

  • 4

    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

  • 5

    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.

Features of a Child Money Back Policy

Child money back plan offers the following features:

  • Long policy tenure of 16 years, perfect for funding your child’s milestones in life.
  • Short premium payment tenure of 10 years.
  • Guaranteed money back means once you invest you can rely on the safety of the plan.
  • Achieve financial independence and retire from active earning, i.e., from employment, business, etc.4. No upper cap for sum assured so that you can reliably allocate money towards your child’s future with a single policy.
  • Monthly Premiums Payments, you can also pay your policy premium in monthly mode, making it easier for you to automate your investment.
  • The policy pays 15% of the sum assured at the end of the 5th, 9th and 13th policy years. Thus, if you opt for a sum assured of Rs 10 lakhs you will receive Rs 1.5 lakhs at the end of these policy years.
  • The policy will pay a maturity amount equal to 55% of the sum assured and accrued bonuses at the end of the policy term. Thus, you can plan the maturity at the time of a critical milestone in your child’s life.

Advantages of Buying a Child Money Back Policy

Using a child money back policy to fulfil your child’s goals have many advantages, including the following:

  • 1

    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.

  • 2

    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.

  • 3

    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.

  • 4

    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.

Benefits of Buying Child Money Back Policy

Child money back policy from Canara HSBC Life Insurance offers the following benefits to you:

  • Child Money Back Plan | Child Insurance Plan | Invest 4G

    1. Life Cover for the Family

    Enhances the financial protection for the family

  • Child Money Back Plan | Child Insurance Plan | Invest 4G

    2. Short Premium Payment Term

    You can stop paying the premiums just after 10 years. The policy continues with all the cash flows coming in when due.

  • Child Money Back Plan | Child Insurance Plan | Invest 4G

    3. Life Cover

    Life cover provides added financial safety to your family, and especially to your child’s future in case of your early demise.

  • Child Money Back Plan | Child Insurance Plan | Invest 4G

    4. Tax Saving on Investment

    The premium you pay for the policy is deductible under section 80C for up to Rs. 1.5 lakhs a year.

  • Child Money Back Plan | Child Insurance Plan | Invest 4G

    5. Tax-Free Cash Flow

    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.

  • Child Money Back Plan | Child Insurance Plan | Invest 4G

    5. Regular Cash Flow

    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.

How to Choose the Best Money Back Policy?

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:

  • 1 Define your financial needs based on the:
    1. The current age of your child
    2. The amount you are ready to invest every year
    3. The benefit amount you expect to receive during the policy tenure
    4. When do you want to receive the planned cashflows
    5. Your expectation of the maturity value
    These numbers will define the tenure and sum assured of your money back plan.
  • 2 Define Select a plan based on your needs
    1. The policy cashflows should arrive in the same year or before your planned requirement
    2. The maturity value should be equal to or more than your need
    3. The policy should provide the sum assured such that you can guarantee the minimum amount as per your need
  • 3 Check the insurer details
    1. The insurance company should have a good claim settlement ratio for death claims
    2. The insurer should have good solvency ratio to uphold regular cashback promises and maturity value
    3. Insurer’s bonus track record will be an added advantage
    4. Check how smooth the claim settlement process is with the insurer

Why should you Buy Child Insurance Plan from Canara HSBC Life Insurance?

Partner Bank Branches


Partner Bank Branches

Backed by Canara Bank, Punjab National Bank & HSBC




Assets Under Management as per 31st March 2021

Individual Death Claims Settled

97.1% ^

Individual Death Claims Settled

In FY 2020-2021

How Child Money Back Plans can help you Build your Child’s Education Fund?

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.

Child Money Back Plan | Child Insurance Plan | Invest 4G

Still, if you wish to plan a large lump sum for your child’s higher education dream, you can follow the methods below:

1. Child Money Back with ULIP

  • Invest in child money back policy, such as Money Back Advantage Plan from Canara HSBC Life Insurance.
  • Simultaneously start investing in a ULIP child plan.
  • Money back policy will ensure a regular cash flow throughout the child’s life and important milestones.
  • At the time your child enters college for higher education, you will have a large corpus available from the ULIP plan. Also, you will have an additional guaranteed sum from the money-back plan.
  • Both plans will have a tax-free maturity value.

2. Multiple Money Back Plans

  • The first money back in Money Back Advantage Plan from Canara HSBC Life Insurance starts in the fifth year, then continues every fourth year. The maturity value arrives three years after the last cashback payment from the plan.
  • You can invest in four different money back plans over four years after the first one.
  • Thus, after five years of the first investment (one year later from the start of the fourth policy), your annual cash flows will start.
  • The cash flows will continue for the next 11 years.
  • At maturity, you will have additional money as you receive the remaining policy amount along with the accrued bonus (see table)
Child's Age Investment Money Back Bonus Payment
8 -1,00,000
9 -2,00,000
10 -3,00,000
11 -4,00,000
12 -4,00,000
13 -4,00,000 1,50,000
14 -4,00,000 1,50,000
15 -4,00,000 1,50,000
16 -4,00,000 1,50,000
17 -4,00,000 1,50,000
18 -3,00,000 1,50,000
19 -2,00,000 1,50,000
20 -1,00,000 1,50,000
21 1,50,000
22 1,50,000
23 1,50,000
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.