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Child Insurance Plans

You can purchase different types of child insurance plans so that you can ensure that the future of your child remains safe and secure and he/she is able to fulfill all his/her dreams regardless of whether you are around or not.
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In India, life insurance for a child is not a very popular concept. But this is a highly beneficial policy type that provides maturity benefits, tax savings, flexible repayments, and high returns as compared to fixed deposits or provident fund accounts.

When compared with other investment tools like mutual funds or fixed deposits, child insurance plans are a safe and secure way to earn higher interest rates on the investment. Flexible payments at maturity as well as the option to invest in equity or debt instruments interchangeably make these policies the choice option for people who have a decent level of financial knowhow.

Life insurance for children loosely implies buying of life insurance policies by the proposer, whose benefits will then be forwarded to the child at various important junctions of his/her life such as education, marriage, mortgage payment, and so on.

Reasons to Buy Children’s Life Insurance Policies:

Child insurance plans offer assured benefits to your child or ward when they come of age and need the funds for future prospects. So, if your child is 8 years old now, then you can buy a child insurance plan that will mature in 10 years when he/she turns 18. The funds can be released as a lump sum, or you can choose partial payments so that the money may be partially withdrawn as and when needs arise.

Advantages Over General Life Insurance Policies:

The major advantages of life insurance policies for children over general life insurance policies are:

  • Maturity benefits to be paid in case the insured survives the policy tenure.
  • In case of death of the insured, remaining premium will be paid by the company till maturity. The sum assured will be paid out normally at the death of the insured.The maturity amount will be paid when the policy matures.

Features of Child Insurance Plans:

In general, life insurance policies for children are meant to provide a cushion to s child in case the death of a parent presents financial difficulties in pursuing important life choices. These plans are available in both linked and non-linked varieties, with various options to singly or periodically pay premiums.

Premiums: Premium can be paid as a lump sum at the beginning of the policy tenure, or you can choose to pay it periodically. Most companies provide options such as monthly/quarterly/half-yearly/annual premium collection, which can be given standing instructions to be credited directly from your bank accounts. The amount of premium depends on the maturity and sum assured figures that you have chosen.

Sum assured: The sum assured implies the amount that will be paid out in case of the policyholders’ demise. In general, sum assured should be above 10 times the current gross income of insured.

Maturity: The maturity amount should be chosen with an eye on the future. Assuming your child is 8 years old, and his policy will get matured in 10 years’ time, then you should take into consideration factors such as inflation and interest rates. If you fail to consider these factors, the released funds may fall short of the requirements in future. Also, plans such as single premium plans may not provide maturity benefits, so kindly check the policy documents clearly before applying.

Tenure: These life insurance policies are generally meant for children up to the age of 18/21, though you can find specific plans that have a higher age ceiling. So tenures can be selected from birth until the child reaches a pre-defined age. The insured should not be more than 70 years at the time of policy maturity.

Segmented payouts: With child life insurance policies, you can select if the child will get payment as a lump sum, or in yearly instalments. Such a setting will help in paying dues such as college fees, mortgage amounts etc.

Premium waivers: An intrinsic part of child plans, premium waivers are applicable when the insured dies within the stipulated tenure. In such a scenario, the sum assured will be paid out to the beneficiary, while the premium for the remaining tenure will be paid by the insurer. At the end of the tenure, the maturity amount will be provided as detailed in the policy document. In case premium waiver is not provided automatically with the plan, you should opt for a waiver rider.

Riders: Specific riders are available that give you more out of life insurance policy. The riders are available in three basic categories – premium waiver, critical illness, and accidental death and disability. The premium waiver may already be added with your plan, so please check the policy documents in this regard. The critical illness rider provides coverage for a set of predefined critical illnesses, while accidental death and disability riders are applicable in case of unfortunate accidents that cause disability or death of the insured.

Types of Child Insurance Plans:

Unit Linked Insurance Plans: The payouts at maturity of ULIPs is determined by the markets, as the funds in ULIPs will be invested in equity instruments. This plan is good for longer tenures (more than 10 years) of policies. Companies may provide the option for choosing between different investments funds, allowing you more control over the money you have invested. Some dynamic plans are also available where the interests and monies may be transferred directly and automatically from equity to debt instruments.

Traditional endowment plans: These policies provide stable interests over the sum assured. The investments you make here are further invested into debt instruments that provide standard margins over the base amount. You should look for any bonuses you are eligible towards. In general, bonuses on traditional plans are paid from 2nd year onwards, and you can check if the bonus is in cash or if a reversionary bonus will be compounded or have simple interest.

Some companies provide the option for flexible investment also, wherein you can decide where the premium goes, and switch between the two types of life insurance as discussed above. An example of this switching would be directing your premium into ULIPs for the first few years of the policy to earn greater profits. After that, you can invest the funds in debt instruments to standardize the profits till maturity.

Taxation Benefits:

Policyholders can claim deductions under Section 80C of Income Tax Act. If the premium paid in a year is more than 10% of basic insured amount, benefits can be claimed only up to 10% of sum assured amount.

Tax exemptions are also available under Section 10 (10D) for interests earned on the investment, in case the premium paid in any year does not exceed one-tenth of the basic sum assured. Funds disbursed in case of death of applicant are fully exempted from taxes.

Benefits of Child Insurance Plans:

  • Flexible disbursing of funds on maturity or death.
  • Premium waivers in case of demise of insured within premium collection period.
  • Secured loans are widely available against child insurance plans.
  • Tax benefits under various sections of Income Tax Act.
  • Option to choose between ULIPs and endowment plans.
  • Flexible periodic premium payment options.
  • Funds available on demise of the insured before maturity, and/or if the policy has reached maturity.

Choosing The Right Plan:

With the advent of private companies, the life insurance segment in India has seen phenomenal growth over the years. Every company has its own child plans but the basic structure remains the same as discussed in above sections.

You should do proper research on life insurance for kids before making a selection. Even though child insurance plans are in essence similar to each other, there are many technicalities that differentiate products from different companies. You may find better payouts from a particular policy, or there are many riders automatically available on a product – finding the right plan for your needs is the first step towards securing your children’s future.

You can visit the Insurance Regulatory and Development Authority of India (IRDA) website to find details of companies selling life insurance products, and then proceed to research child plans from different providers. This can be a tedious process, so here’s a way to skirt this time-consuming process.

Comparing Products Online:

Alternatively, you can visit various aggregator websites on the internet that provide you with comparison tools to compare various products side-by-side. This will help you in narrowing down the choices by removing plans that are not in your budget or don’t provide the cover you are looking for.

Another advantage of comparing plans is that you can easily locate any additional features provided by a company on its child insurance plans. If you are making specific and learned comparisons, you can in all likelihood find the perfect plan for your needs in a matter of minutes.

To use the BankBazaar life insurance policy comparison tool, you can enter details of your requirements through a few simple clicks. On entering all details, the relevant life insurance policies applicable for you will be displayed. You can then proceed to select the plans that interest you, and then compare them side by side with a single click.

Applying for a Policy:

Once you have selected a plan from a particular insurance provider, you can either apply directly online (if service available) or contact the provider to get a quote. Most firms will send a representative over to collect details and educate you more about individual plans. The relevant documents as asked by the company have to be in order when filling out the final application forms/details.

Alternatively, you can use aggregator websites to find the right plan and apply directly through them. Sites like BankBazaar provide options to request a quote or apply online, and you can also receive monetary benefits and online shopping coupons at the same policy rate.

Popular child insurance plans in India:

Some of the notable child insurance plans available in India are as follows:

  1. HDFC Life YoungStar Udaan - This is a non-linked, participating life insurance scheme that helps parents to systematically plan and invest for their children’s education and other important life events. The plan ensures that the needs of the child are met even when the parent is not around. Key features of the plan include the following:
    1. The HDFC Life Youngstar Udaan plan is an endowment and money back plan that has multiple variants.
    2. Customers can choose from three different types of maturity benefits, based on their insurance needs.
    3. Under the Classic Waiver variant of the plan, after the death of the policyholder, the future premiums need not be paid.
    4. Guaranteed Additions accrue during the first 5 years of the investment, and these are paid out at policy maturity.
    5. The plan allows you a wide range of policy terms and premium payment options that help you plan for the future goals of your child.
    6. In spite of a limited premium payment term, you can get insurance coverage for the entire policy term.
  2. SBI Life - Smart Champ Insurance - This is an individual, non-linked, participating life insurance scheme that helps parents invest for their children’s educational needs. This plan ensures that the family is financially protected, secures the future of the child, and offers a certain level of flexibility in choosing the premium payment options. Some of the key features and benefits of the plan are as detailed below:
    1. The insured receives life insurance benefits and coverage for accidental total permanent disability (ATPD) throughout the policy tenure.
    2. In the event of death of the policyholder, the sum assured will be immediately paid out and the future premiums will be waived off.
    3. After the child reaches 18 years of age, the benefits are paid out in 4 equal annual installments.
    4. The policyholder can choose to pay the premium as a lump sum amount or select the limited premium option.
  3. Bajaj Allianz Young Assure Plan - This is a traditional, participating, limited and regular premium payment endowment plan that ensures that your family’s future is financially secure. The salient features of this plan are as follows:
    1. There are multiple policy term options and premium payment choices that the policyholder can opt for. This ensures that money is available to the family of the insured during crucial periods like child’s education, marriage, etc.
    2. Guaranteed Additions (GA), Guaranteed Maturity Benefit (GMB), and bonuses are offered to the policyholder to ensure that he/she receives good returns from the investment.
    3. Based on the customer’s future financial needs, there are three cash installment options that can be chosen from.
    4. In the event of accidental disability or death of the policyholder, comprehensive insurance coverage is offered.
    5. It is possible to enhance the coverage under the plan through appropriate riders.
    6. The insurance company offers special premium rates for female customers of the plan.

When should I buy a child plan?

You should ideally buy a child plan as soon as your baby is born. This allows you to accumulate more funds towards the maturity amount. Also, the younger and healthier a person is, the lower will be premiums associated with insuring them.

Can I buy a child plan for my 15 year old?

Yes, you are free to buy child insurance policies for your kid. However, the maturity amount and the sum assured will be low as the plans generally mature when the child turns 18, allowing you only 3 years of premium payments.

Other Life Insurance Plans Popular Life Insurance Plans

Secure Your Children's Future with Life Insurance Reviews

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  • Bajaj Allianz Life Life Insurance
    "Can do Better"
    0.5 4.0/5 "Great!"
    The coverage value is fine in Bajaj Allianz and benefits are good. I didn't interact much with the agent but at the time of purchasing the policy they have coordinated very well. The policy coverage is minimum, the tax benefits and financial security for unforeseen events is there.
    Was this review helpful? 0
    , hyderabad
    Reviewed on Jan 18, 2019
  • LIC Life Insurance
    "Must policy for every Indian"
    0.5 5.0/5 "Blown Away!"
    LIC is a very good policy in India. I cannot compared the LIC company with any other company in terms of best services and the claim ratio. After the maturity, in the same day the amount will be credited in my account and i don't need to contact anyone. They are providing all of kind of policy which suits for all kind of aged people thats the beauty of LIC.
    Was this review helpful? 1
    , hyderabad
    Reviewed on Jan 18, 2019
  • LIC Life Insurance
    "Excellent Service"
    0.5 5.0/5 "Blown Away!"
    I had taken this LIC Jeevan anand insurance policy a long time back and i had been paying the premium half yearly. I had been paying the premium online and the payment method has been convenient. It has been a good policy and it is suggestible to others.
    Was this review helpful? 0
    , navi mumbai
    Reviewed on Jan 18, 2019
  • LIC Life Insurance
    "Good Policy"
    0.5 4.0/5 "Great!"
    5 years back, i have purchased the life insurance policy with Life insurance corporation of India. The plan name is jeevan anand and its a good policy to take. I forgot to make the payment on time hence the policy got lapsed. The service of LIC is good. They have sent a regular notification regarding the premium payment.
    Was this review helpful? 0
    , new delhi
    Reviewed on Jan 18, 2019
  • LIC Life Insurance
    "Good Policy"
    0.5 4.0/5 "Great!"
    Based on the benefits and returns i have chosen this life insurance corporation of India . I am satisfied with the amount which am making for the policy . Am making the payment yearly through online with tenure period of 20 years . This policy cover accidental benefits and critical illness benefits . Overall am happy with it.
    Was this review helpful? 0
    , mumbai
    Reviewed on Jan 18, 2019
  • LIC Life Insurance
    "Benefits should be increased"
    0.5 4.0/5 "Great!"
    I have not much interacted with the customer support of LIC, but their agents are professional. In Jeevan anad policy the maturity value is lesser for 15 years. I make the premium of Rs. 30,000 per annum. After the tenure period I will amount around Rs 4 lakhs. LIC is providing financial security for unforeseen events but need to concernate on benefits.
    Was this review helpful? 0
    , chennai
    Reviewed on Jan 18, 2019
  • LIC Life Insurance
    "Excellent"
    0.5 5.0/5 "Blown Away!"
    Name of the LIC policy is Jeevan Ankpur and tenure is 16 years. The yearly premium is 5061 rupees which I pay through net banking or cheque. The customer service and response was excellent. The benefits are good, it includes accidental or incase of death they will provide sum assured of 10% every year up to 18years of my daughter.
    Was this review helpful? 0
    , indore
    Reviewed on Jan 18, 2019
  • LIC Life Insurance
    "Good benefit"
    0.5 5.0/5 "Blown Away!"
    My life insurance policy was taken with LIC. The payment option is very good. I can make the payment through online banking, credit card, cash and cheque. In 2017, i have purchased this policy. Total term period of the policy is 21 years. I'm satisfied with the sum assured amount. Since its a reputed company and claim process is easy hence i have selected Life Insurance Corporation of India.
    Was this review helpful? 0
    , chennai
    Reviewed on Jan 18, 2019
  • LIC Life Insurance
    "Trusted Policy with LIC"
    0.5 5.0/5 "Blown Away!"
    I have so many policy, the money back is good based on the policy I took the loan. LIC is good there is no issue Its a trusted one. They are very transparent, every 5 years they gave me money bonus and policy cover is good the payment option is very convenient.
    Was this review helpful? 0
    , chennai
    Reviewed on Jan 18, 2019
  • LIC Life Insurance
    "Trusted Policy with LIC"
    0.5 5.0/5 "Blown Away!"
    I have so many policy, the money back is good based on the policy I took the loan. LIC is good there is no issue Its a trusted one. They are very transparent, every 5 years they gave me money bonus and policy cover is good the payment option is very convenient.
    Was this review helpful? 0
    , chennai
    Reviewed on Jan 18, 2019
  • Max Life Insurance
    "Good for tax saving"
    0.5 4.0/5 "Great!"
    AXIS bank suggested Max life its good for the income tax benefits under 80c section, the premium amount is around Rs. 50,000 for 6 years term. On time I got the policy copy, the payment option is good, I need to wait for 20 years but pre closure option is available.
    Was this review helpful? 0
    , chennai
    Reviewed on Jan 18, 2019
  • LIC Life Insurance
    "Must Have"
    0.5 5.0/5 "Blown Away!"
    Its is feasible and I can get the loan based on the policy coverage. I took the Jeevan anand policy probably I make the premium around Rs. 15,000 per year it has term of 20 years, Almost I paid it for 15 years , remaining 5 years to go. LIC Is good for tax benefits.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 17, 2019
  • SBI Life Life Insurance
    "Excellent Policy"
    0.5 5.0/5 "Blown Away!"
    I had taken this insurance policy a long time back, the services which they had been very good. The premium amount has been nominal and has not been high and the payment method has been simple. I can make the payments using my credit card and there has not been any hassle faced with the services of them.
    Was this review helpful? 0
    , chennai
    Reviewed on Jan 17, 2019
  • ICICI Prudential Life Insurance
    "worst policy ever"
    0.5 1.0/5 "Really Bad"
    I am not aware that i am opening insurance with icici while opening my salary Acc. But not they are not closing it . I just feel like i made a big mistake by considering icici for my salary account . Think again if you really think icici is a good choice .
    Was this review helpful? 0
    , hyderabad
    Reviewed on Jan 17, 2019
  • LIC Life Insurance
    "Excellent service"
    0.5 5.0/5 "Blown Away!"
    I have been holding my life insurance with Life insurance corporation of India, i took my life insurance as the agent of that and he had suggested me good policy explain me well about the coverage and the premium amount they have charged me was nominal they have given me up to 3,000 , it is in monthly basis, and the premium amount gets auto debited from my account.
    Was this review helpful? 0
    , mumbai
    Reviewed on Jan 17, 2019
  • LIC Life Insurance
    "Good service"
    0.5 4.0/5 "Great!"
    I have been holding my life insurance with Life insurance corporation of India from long time, and the agent of LIC was know person so he suggested me best policy and there premium amount they have given me was nominal , the premium amount i use pay on yearly basis,and there is no hidden charged , and i pay premium through auto debit .
    Was this review helpful? 0
    , new delhi
    Reviewed on Jan 17, 2019
  • LIC Life Insurance
    "Excellent service"
    0.5 5.0/5 "Blown Away!"
    I have been holding my life insurance with Life Insurance corporation of India,i took jeevan anand policy , and the agent is my brother , he had explained me clearly and advise me which insurance is good for me and i pay premium on half yearly basis and monthly basis as i have two policy, i use to pay through off line mode.
    Was this review helpful? 0
    , hyderabad
    Reviewed on Jan 17, 2019
  • LIC Life Insurance
    "Best service"
    0.5 5.0/5 "Blown Away!"
    I have been holding my life insurance with Life Insurance corporation of India,i took life endowment policy , and the agent had properly explain me out the plan benefits and policy coverage , he had explained me clearly and advise me which insurance is good for me and i pay premium on quarterly basis,i use to pay premium up to 14000 through on line, i have two policy second policy premium i use to pay 25,000 as an yearly basis,and there patrol is good,they use to update me if any policy they use to update me, i use to pay through on line mode, through neft transfer.
    Was this review helpful? 0
    , chennai
    Reviewed on Jan 17, 2019
  • LIC Life Insurance
    "Good service"
    0.5 4.0/5 "Great!"
    I have been using my life insurance with Life insurance corporation of India, i have taken policy for my family , i have paying premium on half yearly basis up to 65,000 they have charged me , it is nominal for me , i use to pay through off line or on line mode,it depends according to my time, it i want to pay in emergency purpose i need to pay through on line,if there is delay in paying premium they use to charged me up to 230 rupees.
    Was this review helpful? 0
    , lucknow
    Reviewed on Jan 17, 2019
  • Bharti Axa Life Life Insurance
    "Good for nominee savings"
    0.5 4.0/5 "Great!"
    Reason to chose Bharthi Axa, my friend working there hence I took the policy. I have taken term insurance with the coverage of Rs.23 lakhs , I can add multiple nominees, I make the premium of Rs.95,000 its for per annum. It has term of 10 years, now a days they have different options too.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 17, 2019
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