What is a Child Investment Plan?

A Child Investment Plan or Child Savings Plan is a special type of insurance-cum-investment product designed to help parents or guardians build a financial corpus for their child's future needs, such as education, marriage, or other major milestones. It combines life insurance protection for the parent (policyholder) with a systematic savings or investment component.

How does a child plan work?

• Premium Payments: The parent or guardian pays regular premiums to the insurance company, choosing the amount and frequency based on their financial goals and capacity.
• Investment & Growth: A very small part of the premium provides life insurance coverage for the parent, while the rest is invested by the insurer to grow over time. Plans can be traditional (with guaranteed returns) or market-linked (returns depend on market performance).
• Maturity Benefit: At the end of the policy term (when the plan matures), the accumulated corpus (sum assured plus bonuses or fund value) is paid out as a lump sum or in instalments to fund the child's goals, such as higher education.
• Death Benefit & Premium Waiver: If the parent dies during the policy term, the insurer pays a death benefit to the child (or a nominee/appointee if the child is a minor) and often waives all future premiums. The policy continues, and the maturity benefit is paid as planned, ensuring the child’s financial security even in the parent’s absence. This is a major differentiator when compared to Mutual Fund Investment.
• Partial Withdrawals: Many plans allow partial withdrawals after a certain period, so you can access funds for specific needs as your child grows.
• Tax Benefits: Premiums paid and maturity/death benefits are generally eligible for tax benefits under Sections 80C and 10(10D) of the Income Tax Act.

Why Buy a Child Investment Plan?

• Secure your child’s future even in your absence
• Combines insurance and savings/investment
• Provides financial protection for the child
• Ensures goal-based savings for education, marriage, etc.
• Premium waiver in case of parent’s death
• Fund withdrawal option for medical needs, fund to pursue child’s interest
• Tax benefits on premiums and payouts

Summary:

A child plan helps parents systematically save and invest for their child’s future, while also providing insurance protection to ensure that the child’s goals are met even if something happens to the parent in an unfortunate scenario.

Top Child Investment Plans in India :

Max Life Online Savings Plan - Child Plan

Regards,

Honvest Team.