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What are Child Plans?

Published On Jul 29, 2021, Updated On Jul 30, 2021

Investing in child plans is a great way to save money for a child. They come with many benefits to help the child financially at times when needed. When the guardian of the child suddenly dies or undergoes an accidental permanent disability, the child is financially taken care of. 

The child receives annual payments after the year of demise if the guardian passes away. This is one of the best ways to save and grow money for the child’s future as when the plan matures, the child will receive financial support for college fees or their marriage expenses.

Types of Child Plans

There are two types of child plans. They are - 

  • Child ULIPs

The customer can choose the securities they want to invest in. In ULIPs, a portion of the initially invested amount is invested in debt instruments and the other part in equity instruments.

  • Child Endowment Plans

The initial amount paid is invested in debt instruments. The customer can not choose the debt instruments they want to invest in. The company picks an instrument to invest in.

Features of Child Plan

The first thing you need to be sure of is how much cover you require. A child plan offers both investment and insurance. Other features of a child plan are listed below.

1. Premium Amount

For every child plan, you will have to pay a premium amount which relies on the maturity benefit you choose for.

2. Premium Payment Mode

Payment of premium is at the choice of the policyholder. You may pay one payment as a premium otherwise you can pay a regular premium, which may be annual, half-yearly, or quarterly.

3. Policy Term

The policy term depends on your child’s age at the time of buying the child plan to foresee the stages of his life where they will be needing financial help and the amount they would need.

4. Maturity Amount

The maturity amount is received either at the top of the policy term or on the death of the elders. Also, there's a choice to withdraw the sum after 5 years depending upon the necessity of your child.

5. Waiver of Premium

In the unfortunate event of the demise of the parent, there's a waiver of premium benefit where the kid gets a daily payment from the maturity amount and a lump sum amount is paid at the last stage of the term, also the premium payment liability is waived off. The policy doesn't lapse until maturity and therefore the company will bear the premium charges.

6. Partial Withdrawal

The money may be withdrawn for the corpus after 5 years depending upon the necessities of your child, be it college fees for education or medical illness, or marriage.

You may also like to read:- Is There Any Government Scheme for a Boy Child?

Add-on Benefits

Apart from the fundamental plan benefits, different insurers offer riders and benefits at a rather extra cost. Also, while some insurers may offer a couple of benefits under the fundamental plan features, some others might charge an additional premium for an equivalent. Comparing can be helpful for you to select the most effective plan with maximum benefits.

  • Maturity Benefit

The best child plans are the ones that offer maximum maturity benefits based on the premium paid. The maturity benefit is offered in both cases where the guardian passes away or outlives the term. 

  • Premium Amount

Based on various factors and individual insurer’s priorities, the premium changes for various child plans even though the amount used as the cover amount and also the term of the plan are identical. Look for the various premium amounts by insurance providers to form an informed decision.

Also Read:- Types of Child Insurance Plans


A child plan is used to financially save a child’s future. There are two types of child plans namely, Child ULIPs, and Child Endowment Plans. They offer benefits and security to the future of the child, financially. 


Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.        

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