Language

Call us

/content/dam/tataaialifeinsurancecompanylimited/navigations/new-call-us/Close.png

starFOR EXISTING POLICY

Have query on premium, payout or any servicing need?

Dedicated NRI Helpdesk:

Call Icon +91 22 6251 9966

Monday - Saturday | 10 am - 7 pm IST
Call charges apply

Plus IconFOR NEW POLICY

Want to buy a new policy online?

For Indian Residents

Call Icon +91 22 6984 9300

Give missed call for a call back:

Call Icon +91 11 6615 8748

Monday - Sunday | 8 am - 11 pm IST

Exclusively for NRIs

Initiate Internet Call

Data charges may apply

Give missed call for a call back:

call +91 11 4473 0242

Available All Days | 24 x 7

Back Arrow Icon
Close Button
Back Arrow Icon
Close Button

Need assistance in choosing the right insurance plan? Get a call from our Expert.

Need assistance in choosing the right insurance plan?Get a call from our Expert.

+91 dropdown arrow

Select Plan dropdown arrow
  • Term plans
  • Saving plans
  • Wealth plans
  • Retirement plans
  • I don't know/I need help

TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in. T&C apply.

Child Investment Plans in India in 2023

Everything, from groceries to education fees, has become increasingly expensive over the years. If you do not make an effort to plan for your expenses, particularly those related to your child, you may find yourself in a financial bind. Most people set aside a portion of their monthly income and deposit it in a bank FD in their children's names. But can a 6% annual return secure your child's future? Maybe not.
 

Here are some of the child investment plans to ensure your dear one has a bright future.
 

What is the apt Investment Plan for the Child?
 
  • ULIP policy

    ULIP stands for Unit Linked Insurance Plan. It is a type of life insurance policy that provides a double benefit. The first is that it allows you to plan for your short and long-term financial goals by investing in market-linked schemes. And the second is that it provides financial security to your family in the event of an unfortunate event such as death or disability.

    We consider the ULIP insurance the apt child investment plan in India because its market-linked component helps to cover your child's college expenses. Whereas; life insurance helps to cover significant expenditures such as weddings when you are not present.

    Features of ULIP policy
    :

    • This child's future investment plan allows you to allocate funds based on your risk tolerance and future goals. Put your money in a debt scheme if you are saving for any upcoming child-related expenses. If you are planning for expenditures that may arise in the next 5-10 years, go for an equity-oriented scheme.
    • If you possess good financial knowledge and can forecast the market, ULIPs allow you to switch between debt and equity funds.
    • A ULIP has a five-year lock-in period, after which you can make partial withdrawals if an emergency arises.
    • The premium paid for this investment plan for kids is deductible up to ₹1,50,000 under section 80C. Section 10(10D) exempts the payout received at the end of the policy tenure.
       
  • SIP

    SIPs, or systematic investment plans, aid in the accomplishment of long-term financial goals. You can begin with as little as ₹500. SIP is one of the apt child-saving schemes because of  more returns and compounding benefits. Let's look at an example to comprehend its benefits better.

    Assume you started a ₹6,000 monthly SIP in an equity-oriented fund as soon as your child was born. The investment period is 18 years, and the scheme's average annual return is 12%. Given the compounding benefit, you will see a capital appreciation of around ₹45.9 Lakh in this case.

    Features of SIP:

    • SIP investments are pocket-friendly. You can begin with as little as ₹500 without compromising your lifestyle.
    • Even with a small investment of ₹500, you can diversify your portfolio by putting the money in multiple quality stocks.
    • SIP offers flexibility. You can start or stop your investment at any time with a few fingertips without explaining the reason to the brokerage firm.


  • Sukanya Samriddhi Yojana

    Sukanya Samriddhi Yojana is one of the apt child plans specifically designed for a girl child. The scheme was launched in 2015 by the honourable Prime Minister of India to assist parents in financing their girl child's education and marriage. As a parent, you may open a maximum of two accounts; however, if you have twins, you may open up to three accounts.

    The minimum annual deposit acceptable under this child investment plan is ₹250. Whereas; the maximum annual deposit amount must not exceed ₹1,50,000. 

    Features of Sukanya Samriddhi Yojana:


    • The scheme currently offers an annual interest rate of 7.6% with compounding benefits, but this rate may change from time to time.
    • The deposit made to this scheme qualifies for a tax* deduction under Section 80C.
    • When the scheme beneficiary turns 18, withdrawal of 50% of the account balance is permissible.
    • The account matures when the beneficiary reaches the age of 21 or on her marriage date.
    • Post maturity, the accrued interest is paid to the scheme beneficiary.
       
  • PPF

    PPF, or Public Provident Fund, is one of the most reliable investment schemes and one of the apt child plans for investment in India. It has government backing and provides you with guaranteed1 returns. A PPF investment can be started with a minimum of ₹500 and a maximum of ₹1,50,000 per fiscal year. Another thing to keep in mind is that investment is only permissible in multiples of 50.

    Features of PPF:

    • The PPF currently pays an annual interest rate of 7.1%.
    • A PPF account can be kept open for a maximum of 15 years. However, it can be extended for another five years in blocks of five years.
    • The scheme provides a tax* benefit of up to ₹1,50,000 under section 80C.
    • PPF investment allows you to borrow funds against it, assisting you in meeting any significant child-related expense that has arisen unexpectedly.
       
  • Debt funds

    Debt funds may not provide aggressive returns as equity-oriented schemes, but they are less volatile to market fluctuations and are known to guard your capital. As a result, it is ideal for long-term goals such as a child's higher education. Debt funds include government securities, corporate bonds, money market instruments, sovereign bonds, and inflation-indexed bonds.

    When investing in them, keep an eye on the credit agency's rating. Schemes with higher returns may be riskier and have a lower rating than those with lower returns.

    Features of debt funds:

    • Including debt funds in your portfolio provides stability by lowering the risk of capital loss.
    • It provides liquidity benefits and can be easily redeemed in an emergency by selling in the secondary market.
    • As previously stated, this investment option is not market linked and thus immune to fluctuations.

 

Conclusion


When deciding on an investment strategy, always consider your child's future. The above plans enable you to generate wealth that can be used not only for meeting child-related expenses but also for a secure retirement, purchasing expensive assets, and much more. Furthermore, many insurers now offer customised and extremely good investment plans for children. 

L&C/Advt/2022/Dec/3211

Discover Tailored Financial Planning Solutions to Secure your Future

+91 dropdown arrow
  • +93 Afghanistan

TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in.


 

Looking to buy a new insurance plan?

Our experts are happy to help you!

+91

Select plan
  • Term plans
  • Saving plans
  • Retirement plans
  • Wealth plans
  • I don't know/I need help

TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in

People Like You Also Read

Limited Pay vs Regular Pay Term Insurance Premium
Read More
6 Types of People Who Need Term Insurance
Read More
Term Plan and Comprehensive Plan: Understanding the Plans
Read More
Should You Purchase a Renewable Term Insurance Plan?
Read More
What is Direct Term Life Insurance? - Advantages And Features
Read More
Why Must You Pay the Term Plan Premium Till the Age of 60?
Read More
3 Options When Your Term Insurance Plan is Getting Expired
Read More
Types of Term Insurance Plans and How to Choose the Right One for You
Read More
Do You Get Money Back with Term Life Insurance?
Read More
How to Cancel a Life Insurance Policy
Read More

People Like You Also Read

Limited Pay vs Regular Pay Term Insurance Premium
Read More
6 Types of People Who Need Term Insurance
Read More
Term Plan and Comprehensive Plan: Understanding the Plans
Read More
Should You Purchase a Renewable Term Insurance Plan?
Read More
What is Direct Term Life Insurance? - Advantages And Features
Read More
Why Must You Pay the Term Plan Premium Till the Age of 60?
Read More
3 Options When Your Term Insurance Plan is Getting Expired
Read More
Types of Term Insurance Plans and How to Choose the Right One for You
Read More
Do You Get Money Back with Term Life Insurance?
Read More
How to Cancel a Life Insurance Policy
Read More
Website Logo Image Icon

Tata AIA Life Insurance

A joint venture between Tata Sons Pvt. Ltd. and AIA Group Ltd. (AIA),  Tata AIA Life Insurance  is one of the leading life insurance providers in India. We post everything you need to know about life insurance, tax savings and a variety of lateral topics such as savings and investments in this space. You can access and read a host of different blogs, articles and pages at the Tata AIA Life Insurance Knowledge Center or get in touch with us with any queries or questions!

View all posts by Tata AIA Life Insurance

 
Frequently Asked Questions

How to invest in a child plan?

You can choose to invest in different types of child plans. You can buy insurance plans like ULIPs, guaranteed1 return plans, etc., for your child. You can also opt for other investments like SIPs, PPF, etc.

Which is the apt life insurance plan for a child's future?

There is no plan that can be best for everyone. One must understand their needs and then research the different plans. After proper research, one can choose the right plan for themselves that will secure their child’s future.

Disclaimer

  • Insurance cover is available under the product.
  • The products are underwritten by Tata AIA Life Insurance Company Ltd.
  • The plans are not guaranteed issuance plans, and they will be subject to Company’s underwriting and acceptance.
  • For more details on risk factors, terms and conditions please read the sales brochure carefully before concluding a sale.
  • This blog is for information and illustrative purposes only and does not purport to any financial or investment services and does not offer or form part of any offer or recommendation. The information is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.
  • Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.
  • Every effort is made to ensure that all information contained in this blog is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.
  • *Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you.
  • 1Guaranteed Returns/Payouts depend on Plan Option, Policy Term, Premium Payment Term and Age at entry.
  • THE LINKED INSURANCE PRODUCT DO NOT OFFER ANY LIQUIDITY DURING THE FIRST FIVE YEARS OF THE CONTRACT. THE POLICY HOLDER WILL NOT BE ABLE TO SURRENDER/WITHDRAW THE MONIES INVESTED IN LINKED INSURANCE PRODUCTS COMPLETELY OR PARTIALLY TILL THE END OF THE FIFTH YEAR.
  • Past performance is not indicative of future performance.
  • All investments made by the Company are subject to market risks. The Company does not guarantee any assured returns. The investment income and price may go down as well as up depending on several factors influencing the market.
  • Please make your own independent decision after consulting your financial or other professional advisor.