What is a Child Plan?
A child plan is a combination of an insurance and investment plan. It secures a child’s life financially in case of sudden demise of the parents. It helps in building a corpus for your child’s crucial life events by setting aside funds over a period of time.
What are the features of a Child Plan?
Following are the features of a child plan:
- The benefit of the child plan continues even after the demise of the parents.
- Future premiums can be waived off in case of demise of parents to prevent burdening the child.
- Some plans offer market-linked returns.
- There is flexibility in receiving the pay-out.
What are the benefits of Child Plan?
- It helps in building a corpus for your child’s higher education the cost of which is rising at a fast pace.
- It helps you in setting aside funds for your child’s medical treatment in case such emergency arises.
- Child plan taken at the right time provides funds to the child in case of sudden and unforeseen death of parents.
- It is accepted as a collateral security when applying for loans.
Are there any child plan with just one investment?
Many child plans are offering the facility of one-time investment option in India. In such plans, you need to pay the amount only once and can enjoy the benefits for the rest of your life. The benefit of a single payment child plan is that it ensures financial protection for your child by just paying a single premium amount.
What are the documents required for buying a child plan?
Following are the documents required for buying a child plan:
- Latest photograph of the applicant
- Relationship document
- Identity Proof
- Proof of Communication Address
- Self Cheque
- Proof of Date of Birth in case of minor
Can I take loan against a child plan?
Yes, child plans can be used as collateral securities when applying for a loan.
What are the types of child plans available in India?
There are two types of child plans available in India for investment:
- Child Endowment Plans
- Child ULIPs
What is a child endowment plan?
A child endowment plan is a traditional life insurance plan that offers both: protection as well as savings or an investment benefit to your child. These plans are also referred to as ‘with profits plan’.
What are child ULIPs?
It is an insurance plan that provides comprehensive life coverage to the child. The insured gets both death benefit and maturity benefit under a child ULIP plan.
Can I give standing instructions to my bank for paying the child plan installment?
Yes you can give standing instructions to your bank for making payments towards your child plan.
What is the minimum installment amount for a child plan?
Child Plans in India are available with a minimum installment of as low as Rs.500. You can compare the various child plans being offered by different service providers before investing.
Can a child plan be prematurely closed?
Yes, you can close a child plan deposit prior to maturity.
What are the benefits of a Child Endowment Policy/Plan?
Following are the benefits offered by a Child Endowment Plan/Policy:
- It offers a dual benefit of saving and insurance
- It is a risk-free and safe investment option even though it offers low returns.
- It builds a habit of disciplined saving in a policyholder
- Endowment plans declare annual bonus.
- You can raise a loan against a child endowment plan
- There is flexibility in paying the premium amount towards a child endowment plan
- It offers a dual-tax benefit to the policy holder.
What are the benefits of Child ULIP plan?
Following are the benefits offered by a Child ULIP plan:
- If offers a dual solution of insurance and investment in a single policy
- You can choose the funds as per your risk-appetite for investment
- It offers flexibility to switch from one fund to another
- It offers top-up facility
- It serves as a long-term investment option
- It offers tax benefit for the amount of premium paid under section 80C and Section 10D of the Income Tax Act
- The policyholder has the flexibility of selecting the riders