The increasing cost of children’s education is worrying Indian parents    It’s a frightening thought for any father or mother —leaving his family with no sufficient income to lead a happy life. The only method to live through this worry is to take a ample life insurance cover.

Child insurance plan offers a lump-sum amount on the death of the policyholder, but the policy does not stop.  All future premiums are waived and the insurance company carry on investing this money on behalf of the policyholder. The child gets the money at specific intervals as planned under the policy. “Like this, the parent makes sure that his child’s requirements are taken care of though he is not around,”
Reviewer of child plans says that these policies come at a extremely high cost compared to a straightforward term plan. They state that rather than allocating a huge amount as premium to a child plan, a parent can buy a term plan of the equal amount for himself and invest the balance money in mutual funds. On maturity, he may have a larger corpus.
Though, they miss out on a essential detail. Suppose the parent dies five years after taking the plan? The term plan will offer a lump-sum for the urgent needs of the family and further investments in the mutual fund will end. The child plan, in spite of this, will not only pay the lump sum, but carry on investing on behalf of the policyholder. Insurers think the waiver of premium feature in a child plan is the key. Higher benefit, higher cost
As the waiver of premium is surely a huge advantage, this double benefit doesn’t come free. There are some extra charges for the PWB rider.
A child plan offers additional benefits also. Child’s education costs are not consistent.    This is why insurance companies build up child plans to match up the different phases of a child’s life.

Child Plan available in LIC Are:

• Jeevan Anurag
• Komal Jeevan
• CDA Endowment Vesting At 21
• Marriage Endowment Or Educational Annuity Plan
• CDA Endowment Vesting At 18
• Jeevan Kishore
• Jeevan Chhaya
• Child Career Plan
• Child Future Plan

Common Queries :

I am married and have a five-year old daughter. I get 20,000 per month salary. I intend to put aside some money for daughter’s education and marriage. I am already have some miney back LIC polices in my and wife’s name paying around Rs. 20,000 per year. I can manage to put aside another Rs. 3000 per month. Is there any good LIC plan to meet education expenses of my daughter? And when should I take a policy for her? Anirudhan

The reason of taking life insurance is to give financial support to the family members, in case of early death of the wage earner of the family.  If you are determined to take an LIC policy for your daughter, you can think about Komal Jeevan with a premium-waiver (PWB) option. This is a with-profit plan and you get a share of the profit in the type of loyalty addition.