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Give your child the gift of savings for a bright future
Give your child the gift of savings for a bright future
Child Savings Plan
As a parent, creating a safe and secure future for your child will be your primary concern. Be it their education or any other dreams and goals that they have, a financial support system will always be necessary. That is why you should consider a child savings plan.
With this type of policy, you can start saving for your child’s future during the early years of their life. And once they are ready for their first milestone in life, the child savings plan can offer the financial support needed to fulfil any goals.
Popular Tata AIA Savings Plans
Tata AIA
Fortune Guarantee Plus
Non-Linked, Non-Participating, Individual Life Insurance Savings Plan (UIN: 110N158V13)
Tata AIA
Guaranteed Return Insurance Plan
Individual, Non-Linked, Non-Participating, Life Insurance Savings Plan (UIN:110N152V14) | 4/5T&C apply
Table of Content
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What Are Child Savings Plans? -
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How Do Child Savings Plans Work? -
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Why Is It Important to Have a Child Savings Plan? -
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Key Benefits of Child Savings Plans -
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Know more about our best Selling Savings Plan – Tata AIA Fortune Guarantee Plus
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Why Do You Need a Child Savings Plan? -
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Child Savings Plan Options -
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How To Choose the Best Child Savings Plan? -
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Child Expense Calculator -
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Factors To Consider Before Purchasing a Child Savings Plan -
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Frequently Asked Questions (FAQs) About Child Savings Plan
What are Child Savings Plans?
A child savings plan is a type of savings, or an investment plan designed to help you save and invest money for your child's future financial needs, such as education, marriage, or other major expenses. These plans come with different features and benefits, depending on the type of policy you choose.
The main objective of a child savings plan is to build a corpus of funds for the child's future expenses while also providing life insurance coverage. The best investment plan for a child offers a flexible policy term, ranging from 10 to 20 years and a host of other benefits, depending on the child's age and financial goal. When choosing a child saving plan, ensure that you save or invest over the long term and pay all the premiums regularly to keep the policy coverage active.
How Do Child Savings Plans Work?
Child savings insurance plans are designed to help parents save money for their child's future needs, such as education, marriage, or other life events. These plans provide a combination of savings and insurance benefits that can help parents to build a financial corpus for their child's future while also providing life cover in case of the unfortunate event of the parent's death.
Here's how child savings insurance plans work
You can buy a child savings insurance plan, which requires you to pay regular premiums for a certain period, usually between 10 to 20 years.
The insurance plan also provides life cover protection, which means that in case of any unfortunate events such as death of the life assured during the policy term, your child will receive a death benefit. At the end of the policy term, if you survive the term, the accumulated savings corpus will be paid to your child.
Some child savings insurance plans also offer additional features such as loan against the policy, and premium waiver in case of the parent's death, which can provide additional flexibility and benefits to the policyholder.
Why is It Important to Have a Child Savings Plan?
All the events in your child’s life need to be supported with a financial plan that you will have to prepare for well in advance. Here are some of the important reasons why you should get a child investment plan
Rising Education Cost
Rising Education Cost
Quality education in India is getting expensive consistently. A child saving plan can help you save money for your child's education and secure their future aspirations, dreams, and goals.
Life Insurance Coverage
Life Insurance Coverage
A life insurance coverage will ensure that your child is protected from uncertainties of life. This can help ensure that your child’s education is not compromised due to any unforeseen circumstances.
Inflation
Inflation
Inflation can impact the value of your savings. The best saving plan for your child can help you stay ahead of inflation by investing in instruments that offer higher returns than traditional savings accounts.
Cost of Living
Cost of Living
The cost of living in India is rising, and it is becoming increasingly difficult to make ends meet. A savings plan for kids can help you plan for your child's future needs, such as higher education, marriage, or even the down payment for a house.
Financial Discipline
Financial Discipline
A child savings plan can help you inculcate financial discipline in your child. By teaching them the importance of saving money, you can help them become financially responsible adults.
Tax Benefits
Tax Benefits
In India, some child savings plans offer tax1 benefits. By investing in such plans, you can not only save for your child's future but also save on taxes.
Key Benefits of Child Savings Plans
Here are some of the key benefits of child savings plans in India
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Financial Security for The Child
Child savings plans provides financial security for your child's future by helping you accumulate a corpus of money to fund their education, marriage, or any other significant life event.
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Long-Term Savings
Child savings plans are designed to provide long-term savings, typically ranging from 10 to 25 years. This allows you to accumulate a significant corpus over time, which can be used to fund your child's future expenses.
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Guaranteed Returns
Many child savings plans offer guaranteed returns, ensuring that your investment is protected from market volatility.
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Life Insurance Coverage
Child savings plans also provide life insurance coverage, ensuring that your child's financial needs are taken care of in case of your unfortunate demise.
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Disciplined Savings
Child savings plans help you inculcate disciplined savings habits, ensuring that you set aside a fixed amount of money towards your child's future every month.
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Tax Benefits
A child savings scheme offers several tax1 benefits, including tax exemption on the principal amount invested, tax-free maturity proceeds, and no tax on partial withdrawals.
Why Do You Need a Child Savings Plan?
Investing in a child savings insurance plan can be a great way to secure your child's future. There are several important milestones that you need to consider for the best investment plan for your child
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Birth of the child
When your child is born, it is a good time to start planning for their future. You can open a child savings insurance plan and start investing regularly. -
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Education
Education is a significant expense in a child's life. It is essential to start planning for your child's education early on. Determine how much money you will need for your child's education and ensure your child savings insurance plan can cover the cost. -
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Higher education
If you plan to send your child abroad for higher education, you will need to save more money. Plan for the additional expenses that come with higher education, such as accommodation and travel. -
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Marriage
Marriage can be another important milestone in a child's life. You will need to plan for the cost of the wedding, as well as any other expenses associated with it. -
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Emergencies
It is always a good idea to have a contingency fund in case of emergencies. You can use the child savings insurance plan to save for unexpected expenses, such as a medical emergency.
How to Choose the Best Child Savings Plan?
Choosing the best child savings insurance plan requires careful consideration of several factors apart from the rate of inflation. Here are some important things to consider when selecting a plan
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Purpose
Determine the purpose of the plan, be it your child's education, marriage, or future expenses. Pick a policy that aligns with your financial goals. This way, you can also decide whether you need a simple life cover or a savings and investment component under the savings plan for kids.
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Premiums
Consider the premium amount and frequency of payment. You can, thus, make your premiums affordable and keep the policy coverage active without having to miss any payments.
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Flexibility
Check the flexibility of the plan. You should be able to choose a policy term and a premium paying term that is aligned with your goals as well as your budget. Also, check if the benefits can be paid out as a regular income or a lump sum, as needed by your child.
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Insurance Cover
Consider the life insurance cover offered by the plan. This can help you plan what amount your child can receive as a death benefit in your absence. The cover should be sufficient for their future needs.
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Credibility of Insurer
Check the credibility and claim settlement ratio of your insurance company. Choose a suitable plan from a reputed and trustworthy insurer that has a high claim settlement ratio.
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Tax Benefits
Under Section 80C of the Income Tax Act, you can claim tax1 benefits on the policy premiums. The death benefit will also be exempt from tax under Section 10(10D) of the Income Tax.
Child Expense
Calculator
Use our Child Expense Calculator to find the cost required to finance their education and the lifestyle they deserve!
Factors to Consider Before Purchasing a Child Savings Plan
Here are some factors to consider before buying a child savings insurance plan
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Your Goals
Determine the goal or the purpose of the savings. Choose a plan that aligns with your financial goals and can support your child's future. If you are planning to send them abroad for higher studies, the costs will be higher, and you will have to plan accordingly.
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Your Budget
Determine your budget for investing in a child savings insurance plan. Understand how much you want to save over the years so that you can pay reasonable premiums throughout the tenure as per a premium payment mode and frequency of your choice.
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Type of Plans
If you are seeking a term plan, choose adequate life insurance cover as well as optional riders, if available. When looking at the best saving plan for your child, seek out options that allow you to save regularly for your future goals. If you choose a ULIP, ensure that the fund options match your risk appetite.
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Policy Term
The policy term for child savings plans can be flexible since different children have different life goals. While some parents may need the policy maturity benefits after 15 years, others may choose a longer policy term of 20 years.
Frequently Asked Questions (FAQs) About Child Savings Plan
When should I start investing in a Child Savings Plan?
You should start investing in a child savings scheme when your child is born or during the first few years of their life. This way, you can determine the policy period and the time needed for your savings to grow. Since the savings are goal based, you can ensure that by the time your child is ready for higher education, these funds will be available for their education.
What is the minimum amount for investing in a Child Savings Plan?
The minimum amount that you want to invest in a child savings plan will depend on the policy of your choice as well as the minimum premium amount permissible under the policy.
How long should I invest in a Child Savings Plan?
You can choose to invest in a child savings plan until the time you have adequate savings to meet your child’s future goals. For instance, if you are saving for your child’s college education, start saving in a child savings plan during their early years so that the policy can offer the savings as a maturity benefit when they finish school education.
Can a minor be a nominee for the Child Savings Plan?
Yes, the nominee for a child savings plan can be a minor. When you buy a child savings plan, the nominee can be your child, who could be well below the age of 18 years at the time of nomination.
What are the tax benefits of a Child Saving Plan?
The tax1 benefits offered under a child savings plan may vary depending on the specific child savings plan you choose. However, these are the tax benefits you can get from your child savings plan
The amount invested in a child savings plan through premiums is eligible for tax exemption under Section 80C of the Income Tax Act up to a maximum limit of ₹1.5 lakhs per year.
The death benefits or the maturity proceeds, including the interest earned on the investment, are exempt from tax under Section 10(10D) of the Income Tax Act.
What is the best way to save for my child's future?
The best way to save money for your child's future is to start early and invest regularly. While there are different traditional savings options, you should go for a child savings plan as it comprises a savings and investment component as well as a life cover. The life insurance cover can secure your child’s future goals with adequate financial support in your absence.
You can customize the coverage, the policy term, and the payout mode of the child savings plan to save more efficiently for your child’s future.
How much money should I save for my children?
The amount of money you should save for your children depends on several factors, such as your financial goals, your income, the age of your children, and the lifestyle you want to provide for them. However, also consider the present and future rate of inflation when saving money so that your savings can combat the inflation rates.
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Disclaimer
The complete name of Tata AIA Fortune Guarantee Plus is Tata AIA Life Insurance Fortune Guarantee Plus (UIN: 110N158V13) - Non-Linked, Non-Participating, Individual Life Insurance Savings Plan.
The complete name of Tata AIA Guaranteed Return Insurance Plan is Tata AIA Life Guaranteed Return Insurance Plan UIN:110N152V14 - Individual, Non-Linked, Non-Participating, Life Insurance Savings Plan
*Guaranteed Income shall be total of Guaranteed annual Income plus Income Booster payable in a year. Guaranteed Income as per the chosen Income Frequency shall commence after maturity till the end of the Income Period, irrespective of survival of the life insured(s) during the Income Period.
+Premium excluding taxes for age group of 18 to 50, Male, Standard life, Plan Option 1 (Regular Income), Policy term 15 years, Income term 30 years. Total Guaranteed Benefit: Rs. 47,49,400
1Income 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 on this site. Please consult your own tax consultant to know the tax benefits available to you.
2Return of Premium shall be the sum of Guaranteed Maturity Benefit plus Milestone Benefit and shall be payable at the end of the Income Period, irrespective of survival of the life insured(s) during the Income Period.
3Available under Regular Income with an Inbuilt Critical Illness Benefit option
4Guaranteed Annual Income (GAI) in the Regular Income option is a percentage of one Annualised Premium while in the Whole Life Income option is a percentage of the Total Premiums Paid
5Guaranteed Addition (Endowment option) defined as a percentage of GMB shall accrue at a simple rate for each completed policy year starting 2nd policy year, throughout the Policy Term and shall be payable on Maturity or Death whichever is earlier, subject to all due premiums being paid. GA shall accrue @ 7.5% of GMB
6Tax benefits of up to ₹46,800 u/s 80C is calculated at highest tax slab rate of 31.20% (including cess excluding surcharge) on life insurance premium paid of ₹1,50,000 as per old tax regime. Tax benefits under the policy are subject to conditions laid under Section 80C, 80D,10(10D), 115BAC and other applicable provisions of the Income Tax Act,1961. Good and Service tax and Cess, if any will be charged extra as per prevailing rates. The Tax-Free income is subject to conditions specified under section 10(10D) and other applicable provisions of the Income Tax Act,1961. Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for details, before acting on above.
This product is underwritten by Tata AIA Life Insurance Company Ltd. The plan is not a guaranteed issuance plan, and it will be subject to company’s underwriting and acceptance
Insurance cover is available under this product.
For more details on risk factors, terms and conditions please read Sales Brochure carefully before concluding a sale. The precise terms and conditions of this plan are specified in the Policy Contract.
Risk cover commences along with policy commencement for all lives, including minor lives.
Buying a Life Insurance Policy is a long-term commitment. An early termination of the Policy usually involves high costs, and the Surrender Value payable may be less than the all the Premiums Paid.
In case of non-standard lives and on submission of non-standard age proof, extra premiums will be charged as per our underwriting guidelines.
For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale.
- All Premiums and interest payable under the policy are exclusive of the taxes, rider premiums, underwriting extra premiums, loading for modal premiums, if any which will be entirely borne/ paid by the Policyholder, in addition to the payment of such Premium or interest. Tata AIA Life shall have the right to claim, deduct, adjust, and recover the amount of any applicable tax or imposition, levied by any statutory or administrative body, from the benefits payable under the Policy.
- L&C/Advt/2024/Nov/3578
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