Child Insurance vs Term Insurance: How is Child Insurance Different from Term Insurance?

Difference Between Child Insurance Policy and Term Insurance Plan

When we become parents for the first time, along with the bundle of joy, comes the responsibility of caring for our child. From choosing the best diapers available to doing our research on what type of homemade food to feed our baby, we leave no stone unturned. When the child grows up, we make sure that their future will be secure, even if disaster strikes us. When we find the future, we go to two things, maybe a long term insurance or child insurance policy. And even if we buy one of these, we are not sure if we have done enough for our children. To better understand things and clear all our doubts, what could be better than discussing both? Here we have explained the difference between term insurance and child insurance.

What is a Term Life Insurance Plan?

Term insurance is one of the life insurance products that you can buy to provide financial security for your family in your absence. And since it protects your family’s financial future, your child is included as well. In the event that the policyholder dies within the policy term, the excess amount is paid to the nominee. The premiums paid under the insurance policy are very cheap compared to other types of life insurance. This type of plan can be purchased at any time of life and the policyholder can also change the plan, if needed. To maximize benefits, policyholders can purchase riders by paying a premium.

Read more: Best Insurance Plans in India 2022

What is a Child Insurance Plan?

A children’s insurance policy is a cash and life insurance policy. This is one of the most sought after plans chosen by parents to protect their children’s future. Children’s insurance has two components like life insurance and cash. Therefore, a life insurance policy helps secure the financial future of a child in the event of a parent’s death; and a portion of the money helps cover the cost of the child’s education or family expenses, depending on the income earned.

Read More: Best Child Insurance Plans in India 2022

Term insurance vs child insurance – The Big Difference

To be clear, let’s discuss some of the key differences between all these insurance policies.

1. Fees

The amount payable under the child’s policy depends largely on the coverage you choose and its benefits. The insurance provider continues to invest in the child insurance plan even after your death. On the other hand, term insurance plans are known for their affordability. To calculate your premiums, you can use an insurance calculator, which is easily available online. After the sudden death of the policy holder, the nominee is given a large sum of money and insurance.

2. Validity calculations

After the death of the parents, their children get a huge benefit under the children’s plan. Likewise, even during the term of the insurance, the benefit of a large amount of money is given to the nominees.

3. Partial removal

Under your child’s insurance policy, you will be able to get a small refund. However, under the term of the insurance policy, you will not be allowed to deduct the minimum amount. Unless you have critical illness cover and you have been diagnosed with one of these illnesses, you will receive more money from your insurance provider. The money you get from there can be used to provide your services and pay your medical bills.

4. Fees

As far as the payments are concerned, under the children’s plan, children receive money over time. Under a term insurance policy, the only payment is the death benefit received by the nominee.

5. Tax benefit

You can claim tax deduction on your child insurance premiums under Section 80C of the Income Tax Act. And the benefit received from the policy under Section 10(10D) of the Income Tax Act, 1961 is exempt. The term insurance tax benefit is the same as the child plan; the only difference is in the cover of serious diseases. You can claim tax deduction under Section 80D of the Income Tax Act, 1961 when you have a critical illness cover.

List of Best Child Insurance Plans and Term Insurance Plans 2022 in India

Here we list the best and most sought after child insurance plans and term insurance plans that you can find in India.

Best term insurance plans in India

Some of the top insurance plans you can go for in the country are:

  • Max Life Smart Secure Plus Plan
  • Bharti AXA Life Flexi Term Plan
  • Pramerica Life Tru-Shield Plan
  • LIC Tech Term Plan
  • Exide Life Smart Term Edge
  • ICICI Pru iProtect Smart Term Plan
  • Kotak Term Plan
  • Bajaj Allianz Life Smart Protect Goal Term Plan
  • HDFC Life Click 2 Protect Life
  • SBI Life Smart Shield

Best child insurance plans in India

Some of the baby plans in India that you can trust are:

  • Bharti AXA Life Child Advantage Plan
  • HDFC Life Youngstar Super Premium Plan
  • ICICI Pru Smart Kid Solutions
  • Kotak Head Start Child Assure Plan
  • Bajaj Allianz Young Assure Plan
  • Max Life Shiksha Plus Super Plan
  • Birla Sun Life Vision Star Plan
  • LIC New Kids Cashback
  • Aegon Life Rising Star Insurance Plan
  • Future General Assured Child Education Plan

You can compare the plans and then make an informed choice that suits your family’s needs. No matter what plan you choose, it will support your family while you are gone.

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