What Are Child Insurance Plans? – Complete Guide
Child Insurance Plans, also known as Child Plans, are insurance-cum-investment products designed to secure a child’s future financial needs such as education, marriage, and career goals. These plans combine life insurance protection for the parent with long-term savings or investment benefits.
In case of the policyholder’s (parent’s) untimely death, most child plans ensure that future premiums are waived while the policy benefits continue for the child.
How Child Insurance Plans Work
- Parents pay regular premiums for a chosen policy term
- The plan builds a savings or investment corpus over time
- On maturity, the child receives lump-sum or staged payouts
- Life cover protects the child’s future even if the parent is not around
Types of Child Insurance Plans
1. Child ULIP Plans
Market-linked plans offering higher return potential with life cover.
2. Guaranteed Child Plans
Provide assured and predictable payouts at key milestones.
3. Endowment Child Plans
Offer savings with fixed maturity benefits and insurance protection.
4. Child Money Back Plans
Provide periodic payouts during the policy term.
Number of Insurance Companies Offering Child Plans in India
As per IRDAI, child insurance plans are offered by 24+ life insurance companies in India, including:
Public Sector
- Life Insurance Corporation of India (LIC)
Private Life Insurance Companies
- HDFC Life
- ICICI Prudential Life
- SBI Life
- Max Life
- Tata AIA Life
- Bajaj Allianz Life
- PNB MetLife
- Aditya Birla Sun Life
Each insurer offers multiple child plans with different payout structures and risk profiles.
Tax Benefits of Child Insurance Plans
Child insurance plans offer attractive tax benefits under the Income Tax Act, 1961.
1. Tax Deduction Under Section 80C
- Premiums paid qualify for deduction up to ₹1.5 lakh per financial year
- Applicable for policies taken for children
2. Tax Exemption Under Section 10(10D)
- Maturity amount and death benefit are generally tax-free
- Subject to premium-to-sum-assured conditions
Why Child Insurance Plans Are Important
- Secure child’s education and marriage expenses
- Ensure financial continuity even after parent’s death
- Encourage disciplined long-term savings
- Offer life insurance plus investment benefits
- Provide tax savings along with wealth creation
How to Choose the Right Child Insurance Plan
- Estimate future education and life goals
- Choose plan type based on risk appetite
- Compare guaranteed vs market-linked returns
- Check waiver of premium benefit
- Review insurer’s claim settlement ratio
Conclusion
Child insurance plans are a powerful financial tool to protect and build your child’s future. With multiple insurance companies offering child plans and tax benefits available under Sections 80C and 10(10D), these plans help parents plan confidently for important life milestones.
At Saving Mantra, we help parents compare child insurance plans and select the best option for long-term financial security.
Disclaimer
This blog is for informational purposes only and does not constitute financial, legal, or tax advice. Policy benefits, guaranteed returns, and tax treatment are subject to policy terms, IRDAI regulations, and prevailing income tax laws. Readers are advised to consult a qualified financial advisor before investing.