Child plan is a type of insurance cum investment that helps an individual to build a required corpus for financing the child’s higher education and marriage expenses. Also it gives a sum assured to the child in case the insured dies. So the child plan provides twin benefit. If the insured dies, life coverage is given and if he survives, child gets surviving benefits

The most unique feature of a child plan is that in case of any eventuality of the proposer of the policy, death benefits are paid to the child (or appointee) and the rest of the premium is waived off. The insurance company bears the premium cost.  There is no lapse in the policy and the child gets maturity amount at the end of policy term. There is no other insurance plan which has this unique feature

As soon as your child arrives into the world, you should think of buying a child insurance plan

One should pay attention towards following factors-
•    The time when the required funds will arise which in most cases is when your child reaches age 18 years
•    The amount you think is sufficient enough to meet education and marriage costs 

While computing the amount, take into account the current inflation rate. A typical MBA program from a reputed business school which costs around Rs 8 lakhs today will become four times costlier from 15 years from now.

A child plan should have following features. Have a look at major features- 
•    Flexibility to choose the policy term which can be anywhere between 13-25 years
•    Freedom to opt for a premium amount suiting your pocket as well as sum insured as per your preference
•    You are allowed to choose any mode of premium payment- monthly, quarterly or yearly installments

As per section 80C of the income tax act, the premiums paid for child plans are deductible from your total income thus reducing your taxable income. As per section 10(10D) of the income tax act, the lump sum amount you get as a survival benefit at maturity period is Tax Free.

As per survey report most parents start planning for their child's future quite late. The need to meet the rearing priorities usually leads to overlooking the financial planning. In order to reap the benefits of insurance plan, it is strongly advised to start planning for the child's future during his/her formative years, i.e, between 1-3 years to ensure that sufficient funds are available when the child is ready to embark on a career path. There is no dearth of good child insurance plans in the market. If chosen carefully, a child's plan can become a solid long term vehicle to manage the future of a child. So, how do you choose the right child insurance plan? Below are some tips to guide you-  

• Know your goals= Planning is the first step to be taken before starting out investments for a child. We should understand how much money would require for child’s education, marriage, etc. The other vital factor to consider is the expected inflation rate and its effects on value of investments. So, you should quantify your objectives with a reputed financial planner and choose an apt child insurance plan.
• Invest in child plans that offer premium waiver benefits= On the death of a parent, insurer waives all future premiums and continues funding the policy till its maturity. The premium waiver benefit ensures that the maturity benefit that was set for the certain age remains intact.
• Carefully read product brochure and understand the additional costs involved in the product  Compare all available child insurance plans before picking the one.