Can Bajaj Life’s Child Plans Secure Your Kid’s Education?
Every parent dreams of a secure and shining future for their child, but the rising cost of education requires sound financial planning for the same. With education inflation in India becoming a key consideration, traditional savings may need to be supplemented. In this context, Bajaj Life Insurance's child plans are designed to support education-focused financial planning while ensuring continued protection for the child in the absence of a parent.
What Are Child Plans?
Child plans are life insurance policies created to support a child’s future financial needs, particularly education. These plans combine life cover with a structured savings component. In the event of the life assured’s untimely demise, the policy provides financial support to help ensure that the child’s education plans can continue. If the policy runs its full term, maturity benefits are intended to support key academic milestones.
Such plans encourage disciplined, long-term planning by aligning policy maturity with the child’s education timeline, while keeping insurance protection at the core.
Bajaj Life Insurance Child Plans
Bajaj Life Insurance is a well-established provider in India and is now 100% Indian-owned. They offer child plans designed to support your child's education planning. They offer a range of options, including participating and non-participating plans and Unit Linked Insurance Plans (ULIPs).
Note: The investment risk in the investment portfolio is borne by the policyholder.
Key benefits of Bajaj Life's child plans include:
● Financial Protection (Life Cover): Provides financial security for the child if the life assured passes away.
● Flexible Payouts: Options to receive benefits as a lump sum or periodic installments.
● Tax Benefits: You may be eligible for tax deductions on premiums paid under Section 80C(under the old tax regime) and maturity benefits under Section 10(10D)* of the Income Tax Act, 1961, subject to prevailing tax laws and conditions.
How Bajaj Life Child Plans Secure Education?
The core purpose of these plans is to ensure that a lack of funds never stands in the way of your child's potential. Here is how they work to secure education:
Financial Support for Education Expenses
The cost of higher education is high. A child plan allows you to accumulate a large corpus over 10, 15, or 20 years. By the time your child is ready for college, the benefit is available to cover tuition fees, accommodation, and other related costs. You can use a Child Plan Calculator to estimate exactly how much you need to save today to meet those future costs.
Handling Unexpected Events
Life insurance protection remains central to child plans. In the unfortunate event of the life assured’s demise during the policy term, the death benefit provides financial support to help maintain household stability and ensure that the child's schooling continues without disruption.
The Premium Waiver Benefit
This is a critical feature of many child plans. In many standard insurance plans, if the policyholder dies, the policy terminates. However, Bajaj Life Child Plans often come with a Waiver of Premium (WOP) benefit.
If the parent passes away during the policy term:
The Death Benefit (Sum Assured) is paid to the nominee immediately.
The insurance company waives all future premiums.
The policy continues until maturity.
The child receives the maturity benefit as originally planned.
Note: The investment risk in the investment portfolio is borne by the policyholder.
This ensures that the specific goal of your child's education corpus is achieved even if you are not there to pay the premiums.
Real-Life Scenarios
To better understand how these plans work, let's look at two common scenarios.
Example 1: Securing Funds for Higher Education
Ramesh, a 35-year-old, buys a child plan for his 5-year-old daughter with a 15-year policy term. After diligently paying his premiums, the policy matures when his daughter turns 20. The lump-sum payout, including the sum assured and any applicable bonuses, funds her engineering degree, allowing her to start her career debt-free.
Example 2: Handling Financial Needs in Case of Emergencies
Priya, a single mother, buys a child plan to secure her son's future. After her passing, five years into the policy, the waiver of premium benefit ensures no future payments are needed. Her son's guardian receives the death benefit for school fees, and when the policy matures, he uses the payout to fund his Master's degree. Priya's planning secured her son's education.
How to Select a Suitable Child Plan?
Selecting the right plan requires a bit of homework. Here are a few factors to consider:
● Assess Future Needs: Start by estimating future education costs. Don't look at today's fees; look at what they will be 15 years from now, factoring in inflation. A Child Education Planner Calculator is very useful here.
● Policy Terms and Coverage: Look for a policy term that ends when your child will need the funds. Ensure the sum assured is sufficient to provide a necessary financial cushion.
● Fees and Charges: Understand the premium allocation charges, policy administration charges, and fund management fees associated with the plan.
● Review Risk Appetite: If you prefer stability, look at fixed-benefit or participating plans. If you seek potential market-linked growth and can manage market risk, consider a ULIP.
Benefits of Investing Early
Time is your greatest asset when accumulating a corpus for your child's future financial requirements. Starting early offers distinct advantages:
● Longer Planning Horizon: Extended policy duration supports gradual accumulation of policy benefits.
● Affordable Premiums: Premiums are generally lower when policies are started earlier.
● Structured Approach: Early planning allows flexibility in managing policy options over time.
Note: The investment risk in the investment portfolio is borne by the policyholder.
Conclusion
Planning for a child’s education requires foresight and financial discipline. Child plans offered by Bajaj Life Insurance combine life insurance protection with structured planning features designed to support education goals. With benefits such as continued policy support through Waiver of Premium features and tax advantages under applicable laws, these plans aim to provide financial continuity during critical stages of a child’s academic journey. Reviewing policy features carefully and aligning them with long-term education needs can help parents plan with greater confidence.
Disclaimer: This article is published in association with Bajaj Life Insurance and not created by TNM Editorial.