Child Plans

Why Do You Need a Child Education Plan?

Before you know it, your child will be ready to take on the world—and a quality education plays a massive role in shaping that journey. A child education plan helps you financially prepare for key milestones while offering protection and returns. Here's how it helps:

• Urgent Help for Financial Emergencies

A child education plan might serve as a safety net in the event of unforeseen financial difficulties. The life cover guarantees that the child's educational path will continue uninterrupted in the event of the parent's untimely death.

• Addressing Increasing Education Costs

The cost of education is increasing at a fast rate each year. By building up funds over time, a child education plan helps you keep ahead of inflation and ensures you can support your child's aspirations without worrying about rapidly rising expenses.

• Using Collateral to Secure Education Loans

Some child education plans may be pledged as security when qualifying for an education loan. This makes it simpler for parents to get money when they need it, particularly for study abroad programs or further education at prestigious colleges.

• Safeguarding Your Child's Future

By investing in a child education plan, you are safeguarding your child's future, even if life takes an unexpected turn. These plans guarantee ongoing assistance for the child's objectives.

• Investment Returns

These plans provide significant investment returns and financial security. Depending on the plan, savings-based or ULIPs, you may match your investments with your child's academic achievements and develop them gradually.

Best Child Education Plans in India 2025

Securing your child's future requires careful financial planning paired with smart investments. To understand the best child education plan that you can invest in 2025 to secure your child’s future, read below:

Sukanya Samriddhi Yojana (SSY)

a. Lock-in Period– Until the girl child reaches 21 years or upon marriage after reaching 18 years

b. Investment Type– Government-backed small savings scheme

c. Returns– 8.2% per annum, compounded yearly

d. Tax Benefits– Up to Rs. 1.5 Lakhs under Section 80C^# of the Income Tax Act,1961

Unit Linked Insurance Plan (ULIP)

a. Lock-in Period– 5 years

b. Investment Type– ULIPs are essentially life insurance plans that offer market-linked returns along with life cover

c. Returns– Depends on market Conditions 

d. Tax Benefits– Up to Rs. 1.5 Lakhs under Section 80C^# of the Income Tax Act,1961 and maturity proceeds are tax exempt under Section 10(10D)^##subjected to prescribed conditions

Endowment Plan

a. Lock-in Period– 2 years

b. Investment Type – Endowment policy is a combination insurance and guaranteed savings scheme

c. Returns– Usually depends on the terms and conditions of the policy.

d. Tax Benefits– Up to Rs. 1.5 Lakhs under Section 80C^# of the Income Tax Act,1961 and maturity proceeds are tax exempt under Section 10(10D)^## subjected to prescribed conditions

Savings Plan

a. Lock-in Period– Usually 5 to 10 years, depending on the tenure of the savings plan

b. Investment Type– Traditional life insurance plan

c. Returns– 4% - 6%

Tax Benefits– Up to Rs. 1.5 Lakhs under Section 80C^# of Income Tax Act, 1961 and maturity proceeds are tax exempt under Section 10(10D)^## subjected to prescribed conditions

Mutual Fund

a. Lock-in Period– No lock-in period

b. Investment Type– Market-linked investment scheme

c. Returns– Usually vary according to fund type

d. Tax Benefits– Up to Rs. 1.5 Lakh deduction under Section 80C^# of the Income Tax Act,1961

Note - It is essential to note that the total deduction available under section 80C^# of the Income Tax Act, 1961, considering all the above investments allowed under this section should not exceed Rs.1, 50,000 per year. Individuals and HUFs are both eligible for Section 80C^# deductions if they have opted for Old Tax Regime.

List of Child Insurance Plans in India Offered by HDFC Life

Securing your child's future is one of the most crucial financial decisions you can opt for. With the gradually rising costs of education, selecting the child insurance plans ensures fulfilling your child's dreams and makes sure to safeguard it during your absence.

HDFC Life provides some of the top child insurance plans in India, which offer both savings and life cover. These plans help you build a strong financial base for your child’s future. Each child plan is made to support important goals like marriage, higher education, or other future needs.

The table below showcases some of the child insurance plans options:

Why Invest in Child Plans?

Investing in a child insurance plan helps you systematically build funds for your child’s future needs, such as education, marriage, or other life goals. These plans offer the dual advantage of life insurance protection and disciplined savings ensuring your child’s dreams are not compromised even in your absence. Regular contributions help create a well-planned financial roadmap for your child’s key milestones.

How Much Should You Invest in a Child Plan?

The cost of education is increasing at a rapid pace, which makes child plans more relevant than ever. According to a recent study, it was identified that the average cost of education from primary classes to post-graduation was Rs. 8,331 per year for a student. However, this study was conducted considering all the types of schools and colleges available across the country. We know that the cost of private schools and colleges is way more than government-owned institutions.

Moreover, the cost of professional courses such as engineering can be more expensive and the cost of some business school courses can become even more expensive, hence based on the desires and interests of the child you will have to plan for a sufficient sum assured.

Using a child education planner can help you estimate future education expenses more accurately and ensure that you are financially prepared for your child’s academic journey.

How to Select the Right Child Education Plan? 

The aim of buying a child education plan is to ensure financial security for children even when you are not around. But do you know what to look for in the best child education plan for optimum benefit? Here are some factors to consider while purchasing education savings plans.
 

• Multiple Benefits

Various benefits such as life cover, the option to grow your money by investing in market-related assets, riders such as critical illness riders, accidental death benefit riders, waiver of premium riders, etc., are provided in some child education insurance plans. Look for these multiple benefits in the plan you propose to buy.
 

• Options for Partial Withdrawal

What if you face a financial crisis before the maturity of the child's education plan? A part withdrawal facility will come in handy during such circumstances. The option for part withdrawal at regular intervals makes it easier to manage the rising education costs at different stages.
 

• Reputation of the Insurance Company

The reputation of the insurance company in terms of reliability and providing financial security to your children whenever needed is paramount when buying a child plan. While considering the reputation of the insurer, focusing on the claim settlement ratio is vital as it speaks of the company’s credibility in settling claims without much hassle.
 

• Flexible Plans

Choosing the best child plan that offers high coverage for low premiums is important to be within your budget. Flexibility in premium payment frequency is also important. Look for a plan that has multiple premium payment options i.e., monthly, quarterly, half-yearly, or yearly.
 

• Investment Choices

A child insurance plan with investment choices that help grow your money will help beat the inflation rate and provide for your child’s education at a later date. Plans that offer multiple investment choices like equity, debt, hybrid funds, etc., that align with your financial goals and risk tolerance are the best options.

What is the Claiming Process for Children Insurance Plans?

The child plan claim process is simple. The steps to follow are:
 

• Notifying the Insurance Company 

Whether it is to claim maturity benefit or death benefit, inform the insurance company. It can be done by accessing the company’s website, sending an email or SMS, calling their toll-free number, or visiting their branch.
 

• Documentation
   

  • Claim Form

Fill out the claim form with the following details:
 

• Details of the Child Education Plan

• Policy details such as number, date of purchase, and maturity date

• Date of the incident and cause of the incident in case of a death benefit

• Nominee/beneficiary’s name
   

• Policy Document

Provide the policy document
 

• Medical Records

In case of a death claim you should enclose the following medical records:

• Death Certificate

• Medical Certificates

• Prescriptions

• Lab Reports
   

• Proof of Identity

Enclose any one of the following identity proofs:

• Aadhar Card

• Voter’s ID Card

• Driving Licence

• PAN

• Passport
   

• Incident-related Documents

In case of unnatural death, the following documents will be required:

• FIR copy

• Post-mortem report
   

• Submitting the Documents 

Submit the relevant documents along with the child plan claim form

• Verification and Review 

On receiving the claim form along with the documents the insurer will conduct an investigation and verification of the incident. The company will appoint a surveyor wherever necessary.
 

• Claim Settlement 

After the investigation and verification are done and the claim is approved, the claim settlement amount is credited to the beneficiary/nominee’s account.

List of Documents Required for Buying Children's Insurance Plans

Listed below is the list of documents required to avail a children's insurance plan:
 

• Proposal form

• Identity proof (passport, voter ID card, Aadhaar, driving licence)

• Age proof

• Income proof

Tax Advantages of a Child Education Plan

Under Section 80C of the Income Tax Act, 1961, the premiums paid for a Child Investment Plan qualify for a tax deduction of up to ₹1.5 lakh per financial year, subject to conditions.

Additionally, under Section 10(10D), the maturity benefits of the plan are tax-free if the annual premium does not exceed:
 

• ₹2.5 lakh for ULIPs (Unit Linked Insurance Plans)
• ₹5 lakh for non-ULIP child investment plans

These tax benefits apply throughout the policy tenure and remain tax-exempt upon policy completion or in case of the parent's demise, subject to conditions.

Discover more about the deduction under 80C for the best child education plan.