Child Education Planning
A child plan is a mix of insurance and savings that helps in financial planning for the child’s future needs and requirements at the right age. Every parent has concerns about their child’s future. Your child’s future can be protected even when you are not around in the future with the help of child savings plan. Even if you are not around to pay the premiums, your child’s future could be protected by the best child plan. Under the child education plan, the parent becomes the life to be insured, wherein the maturity amount is given to the child. Parents consider it to be one of their biggest responsibilities to get their children good education. With the rising costs of higher education, child insurance plans would be of great help and come to the rescue. This investment cum protection plan provides life protection to the child and helps the parents in creating a financial back up for their child’s future.
What is Child Education Plan?
A child education plan offers a comprehensive coverage of life insurance, along with other benefits of maturity returns that will help cater to the future financial needs of the child. Education is considered to be one of the most crucial aspects of a child’s life. It is the parent's biggest concerns to do whatever they can to provide their children with the best education. Surging costs of higher education is one of the biggest concerns of parents in India. Moreover, with life being so uncertain and risky, it becomes more worrisome to think and plan about the children’s future. Child insurance plans help in such times of emergencies that might occur in the future to anyone. With the help of the best child plan, you can keep your child’s future secure and the invested money would result into the funds collected for their needs of higher education, career, or other requirements of the future. Due to lack of knowledge and not enough parental savings, children have to suffer in the future and could also not be able to pursue their dreams. Being prepared for the future of your child with the right child savings plan, would help in keeping their future protected and secure.
Term Insurance Premium
Why do you need Child Savings Plan?
Present rate of inflation :
Prices of goods and services are constantly rising leading to difficulty in managing finances.
Rapidly rising costs of education :
The constant upsurge in the costs of education, especially higher education is a huge problem for the parents whose children are aspiring for a bright career.
Fulfils future financial needs :
Financial expenses in the future are going to be much higher than the present-day expenses. Having a proper investment plan would help cover these expenses.
Helps in case of the demise of parents
In the unfortunate event of the demise of the insured parent, the child would be benefitted by the savings in the child future plan.
Child Insurance Plans by Bharti AXA
The child plan for education provided by Bharti AXA helps create a financial corpus for your child’s future financial needs. Bharti AXA provides Bharti AXA Life Child Advantage Plan and the Bharti AXA Life Shining Stars child savings plans that promise guaranteed returns and has various other benefits. Bharti AXA Life Child Advantage Plan provides a maturity benefit wherein a lump sum amount of money can be taken as the pay-out money option. It also offers an in-built premium waiver option, wherein the plan gets continued without any premium after the parent dies. The plan also offers a more comprehensive coverage by accompanying the additional rider benefits including the Bharti AXA Hospi Cash Rider and the Bharti AXA Accidental Benefit Rider into it. The premiums paid in the plan are eligible for tax exemptions under Section 80C as well as Section 10(10D) in case of any claims. The Bharti AXA Shining Stars Plan offers the flexibility to choose from multiple terms of policies and premium payment. It is a great option for short-term investment for your child’s near future plans. It provides flexibility in the premium payment as well as policy terms, along with maturity payout options. Moreover, the plan also provides in-built death benefit as well as tax benefit.
Child Insurance Plan
|Bharti AXA Life Child Advantage Plan||- Entry age: 18-55 years|
|- Sum assured: Minimum- Rs. 25,000Maximum: no limit|
|- Term of plan: 11-21 years|
|- Premium: depends on sum assured,
plan selected, term and age
|Bharti AXA Shining Stars Plan||- Entry age: 18-60 years|
|- Maximum maturity age: 72-80 years
(based on policy term)
|- Term of plan: 7-15 years|
|- Minimum sum assured: Rs. 50,000|
|- Maximum sum assured: no limit|
|- Modes of premium payment: annual, semi-annual, quarterly, monthly|
Benefits of Child Investment Plans
In contemporary times, having a corpus for your child’s successful and bright future is an important aspect of modern-day parenting. A child savings plan helps you build a strong financial corpus for the future of your child, and meet their educational as well as other expenses without any financial burden. It collects corpus that is even enough for money required to gain higher education in a foreign country.
Child money back plans allow withdrawal of money during the child investment plan tenure, which can be utilised for urgent medical emergencies and treatments of the child. Such investments come in handy in times of medical emergencies and its huge expenses. It reduces financial pressure and stress caused due to uncertainties.
Absence of Parents
No amount of preparation can make one ready for an unfortunate event like death. Moreover, the death of a parent can be even more traumatizing for an innocent child. The support financial provided by the insurance companies and investments like a child plan can be of much help in tackling the child’s financial needs. The child receives a lump sum amount of money that is promised at the time of purchasing the best child plan for your child. Moreover, the child would not have to pay premiums and the policy benefits would still be continued without any breaks.
Under Section 80C and Section 10(10D) of the Income Tax Act you can avail tax exemptions on maturity or death claims.
At the time of maturity of the child insurance plan, the fund value is paid to the child. Also, in case of early demise of the policyholder, i.e. the parent, the beneficiary, i.e. the child gains all the benefits of the plan.
If you have bought a child investment plan, you can avail secured loans against it.
Features of Child Investment Plans
A child future plan comes with an array of useful features that ensures a rewarding return and protection. A child investment plan is designed to offer financial safety to the children in case of financial burden or taking any vital decisions of life. These plans are available in both linked and non-linked types. Knowing the features of these plans is essential to be able to choose the right plan. Mentioned below are the key features of child investment plans:
The sum assured in a child future plan is the amount of money that is paid out in the event of an unfortunate or untimely demise of the parent. Most of the time, the sum assured must be more than 10 times the current gross earning of the investor/policyholder.
Premium waiver is an inherent feature of a child benefit plan. This feature becomes applicable if the parent dies during the stipulated time of the plan. In such a case, the sum assured will be paid out to the beneficiary, and the due amount of premium is paid by the insurance provider. At the time of maturity of the policy, the child is entitled to receive the maturity amount as per the policy document.
In some cases, parents wish to withdraw money before the policy matures. They can withdraw fund value in multiple fragments whenever they need it. This is mostly done for fulfilment of the child’s financial needs at certain moments. Many child plans do offer partial liquidity after the child turns 18.
High Returns to
Generally, the returns offered by the child investment plans are more than 10-12%. There are many government schemes that offer much lower rates of returns that do not help beat inflation.
In case of death of a parent, the child receives immediate financial protection from the insurance provider. The insurance provider pays a lump sum amount to the child, under the child care plan, and takes care that the child’s education is not impacted.
The maturity amount must be chosen by keeping your child’s future in mind. Keeping the current and future inflation rates, you must decide the maturity amount of the plan. The maturity amount can be received over 5 years as pay-outs and lump sum amounts.
The premium amount in a child plan is subject to the amount of maturity benefit and the sum assured that you opt for. you may either opt to pay the premium amount on regular intervals or for a certain period of time. Most of the insurance providers offer options like annual, semi-annual, quarterly, and monthly payments. The amount of premium to be paid varies based on the sum assured you choose in case of the traditional child care plans.
Term of the
The time that you think your child will get on his/her own feet is the best time to get the policy matured. You must choose the policy term to meet the exact period.
There are certain additional riders available in a child plan that provide additional benefits like critical illness rider benefit, accidental death or disability benefit, or premium waiver benefit.
How to Calculate Child Plan Returns?
Child plan returns can be calculated using the online calculator tool. The functioning of the child care plan returns calculator is very simple. Firstly, all the relevant details of the policyholder need to be added against the fields in the form generated by the online calculator. By doing this, the estimated future cost of the child’s higher education can be found. You can also find the estimated amount of money that needs to be saved in order to reach the future goals. By analysing and evaluating the simple details like the amount of investment, current and future estimated annual expenses, current and future estimated annual income, current and future inflation rates, age of your child, your age, etc. are the factors that would help you determine the amount that you must start investing. The calculations are generated assuming that the inflation rate of 6% and the values are illustrative. The actual cost and returns depend on the future performance and inflation, as well as the market conditions and the terms and conditions of your plan.
Who should buy Child Investment Plan?
Child education plan is essential for anyone who wishes to build a secure and comfortable future for their children. In order to foster your child’s future prudently, you must not underestimate their sudden and unexpected needs of the future. You must invest in a child savings plan if you want to secure the education of your child. With the help of such a plan, you can offer a quality education to your child without any compromise. Moreover, it is also helpful for covering other big events like their marriage, buying a car, or buying a house. Give the gift of a lifetime to your child by building a corpus with complete financial protection and security. Doing so will also create a great example in the eyes of your child, who will further understand the importance of investing in child care plan.
How to choose the best Child Education Plan?
Start Early :
It is advised that you start investing in a child education plan from early on. By doing so, you would be able to build a larger corpus and thus have greater freedom in making financial decisions in the future.
Factor in Economic Variables :
It is important to understand that multiple economic variables need to be factored while making decisions regarding the appropriate sum assured in the plan. Factors like inflation increase in the education and health sectors in the future, cost of living, etc. must be considered.
Pay Special Attention to the Terms and Conditions :
It is important to check the terms and conditions related to every plan, before finalising the best plan for yourself.
Choose the Premium Waiver Benefit :
The Premium Waiver benefit is one of the most significant benefits that your child will receive under the child savings plan. While selecting the best child education plan, you must consider to choose this as the additional benefit, based on the other factors of your plan.
Opt for Partial Withdrawal Clause
In case of emergencies, the partial withdrawal clause will help you overcome them without any financial burden. This clause allows you to withdraw partial sums of amount in times of unforeseen expenses.
Child Education Plan Claim Process
The first step involves informing us about your intention to file the claim. Get a hold of the claims form which you can find both at our physical outlet as well as Bharti AXA’s online portal. The claims form will involve filling in details such as cause of death, name of the beneficiary, the location of the death, and personal details such as date of birth of the beneficiary, policy number and name of the beneficiary amongst other aspects.
The next step involves arranging all the necessary documents that you will need in order to ensure that your claim goes through successfully. Some of the main documents that you need to keep handy if you are looking to file a claim include the death certificate pertaining to the deceased registered under the policy, age of the deceased, original copies of the policy document, ID proof of the beneficiary, and any medical reports/records pertaining to the beneficiary’s demise.
Once the claims form and the necessary documents are submitted, the claim will be processed within a duration of 30 days. In some cases, additional steps will be undertaken by the insurer. This is especially true in cases where claims are made within a period of 3 years since the purchase of the policy, in lieu of which additional investigation is undertaken. This includes checking with the hospital where the deceased registered under the policy was admitted prior to his/her demise.
Child Education Plan Frequently Asked Questions (FAQs)
The article is meant to be general and informative in nature and should not be construed as solicitation material. Please read the related product brochures for exclusions, terms and conditions, warranties, etc. carefully before concluding a sale
Consult with your financial advisor before making any decisions on insurance purchase.
*Tax benefits are as per the Income Tax Act, 1961, and are subject to any amendments made thereto from time to time.