The Best Child Plans in India: An Expert Guide
When it comes to securing a child's future, choosing the right child plan is crucial. As a professional with over a decade in the insurance sector, I, Anil Rajpurohit, understand the importance of these plans. With years of experience and a renowned YouTube channel, Anil Rajpurohit FFFS, I have detailed my insights on this topic.
Introduction to Child Plans in India
A child plan is a specially designed insurance and investment program that helps in securing the future of a child. These plans consist of two parts: investments and insurance. The insurance component provides financial support in case of a tragic event, while the investment component helps build a corpus to aid with the child's financial needs.
Key Features of a Good Child Plan
When looking for the best child plan in India, consider the following key features:
Financial Stability: Opt for a plan that offers solid support for educational milestones and a secure financial future. Flexibility: A flexible plan should allow premium payments at key junctures in a child's development. Guaranteed Benefits: Ensure the plan includes guaranteed benefits that align with your financial goals. Reassurance: A reliable plan should make the entire process straightforward and comforting for both the applicant and the future beneficiary.Case Study: SBI Life Child Plan
Based on my experience, SBI Life offers one of the best child plans in India. I chose their child plan because it provided me with a solid financial support system for various educational milestones while ensuring a secure future for my child. The plan's flexibility and guaranteed benefits made it easier for me to plan for my child's future education and other needs.
If you're looking for a reliable and trustworthy child plan, I highly recommend checking out SBI Life. They made the entire process straightforward and reassuring for me. You can watch a detailed video on this subject on my channel Anil Rajpurohit FFFS.
Insurance vs. Investment
No insurance plan can make a policy holder or nominee RICH. Insurance is never an investment. Life insurance is a loss-reducing avenue for your nominee in your absence. However, for children, avoid taking insurance plans. Instead, consider a Pure Term Plan – ONLINE for yourself. For investment, an SIP in equity mutual funds is ideal for the long term.
Types of Child Plans
1. Child Endowment Plan
A Child Endowment Plan is a conventional insurance plan that combines savings with insurance. These investments offer set returns with no risk. The premium payments are invested in debt instruments, and the company chooses which debt instruments to use.
2. Child ULIPs (Unit Linked Insurance Plans)
Child ULIPs combine investing and protection. Because the investment is made in market-linked securities, it comes with inherent risks. According to the policyholder's preference, a portion of the premium payment is invested in equity or debt securities.
To understand how these plans work, let's break it down:
Investors should be aware of the precise amount needed to achieve their financial objective at the end of the term before choosing a plan. They can then determine the actual amounts insured or the amount of insurance coverage needed based on this. To get the premium amount, depending on the insured amount, the investor must submit an application. The investor has the choice of paying the premium in one single sum or over time.For instance, in a ULIP plan, if the parent passes away, the company will pay the child who is the nominee a portion of the maturity amount on an annual basis until maturity. If the parent lives longer than the policy term, the child receives the entire sum promised at the end of the policy period.
Child Funds: An Alternative for Investment
A child fund is an open-ended mutual fund program designed to invest in objectives particular to children. These funds are popular because of the growing cost of school and other necessities.
Key Features of Child Funds
The minimum lock-in term is five years or until the child is 18, whichever comes first. Child funds invest in debt and equity portfolios. An equity mutual fund invests 60% of its capital in equity securities. The main goal is to establish a source of funding for children's essential expenses. This fund serves as an alternative to long-term investment choices because investors are prohibited from early withdrawals due to the fund's steep exit fees.Who Should Invest in a Child Plan or Child Fund?
Both child plans and child funds are good investment options, but the choice depends on individual financial goals and time horizons. For instance:
Child Funds: If you need money in 5 or 6 years, a child fund is more suitable as it has a shorter lock-in term of 5 years. Child Plans: People who have a good understanding of risk and bear market volatility may invest in a portfolio that emphasizes stocks.To understand more about your options, reach out to us at We are here to help with any questions you may have regarding company registration.