Why Should Parents Invest in Endowment Plan?
Close
Close

Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

Kotak e-Term Plan

Protect Your family’s financial future with Kotak e-Term Plan. Know more

Kotak Assured Savings Plan

A plan that offer guaranteed returns and financial protection for your family. Know more

Kotak Guaranteed Savings Plan

A plan that offers long term savings and insurance in one premium. Know more

Kotak e-Invest

Insurance and investment in one plan with Kotak e-Invest. Know more

Kotak Health Shield

Insurance against medical expenses related to heart, brain, liver and Cancer. Know more

Why Should Parents Invest in Endowment Plan?

Why Should Parents Invest in Endowment Plan?
  • 11th Jul 2022 |
  • 2,947

Every parent is concerned about their children’s future. Financial security is one of the most critical aspects of children’s future. So, parents do everything possible to ensure their children don’t face economic issues. Investing their earnings in a child savings plan or other best investment plan for the child is one of the best solutions.

In this article, we will discuss the best investment plan for a child and highlight the features and benefits of child investment plans like endowment plans to give you a better perspective on the ideal features a parent should look for in a child savings plan.

Endowment Plan: The Best Investment Plan For Child

Just like ULIP policy, an endowment plan is a modern life insurance option available in the market with a dual benefit. An endowment plan offers the policyholder a blend of life insurance and investment. In this life insurance option, the policyholder gets the best of both; investment returns as maturity and death benefits in case of the policyholder’s unfortunate demise.

In an endowment plan, the policyholder or the nominee receives a lump sum amount either after a specific policy term or post the unfortunate demise of the policyholder, depending upon the situation.

Thus, it is one of the best investment options that a person looking to invest hard-earned money can opt for. Moreover, as you get a living benefit through periodic payouts and simultaneously enjoy life insurance cover. Endowment plans are the best pick for your children. There are dedicated endowment plans for children that a parent must look through and opt for, depending on how one of these child endowment plans is fulfilling their child’s financial requirements.

What is a Child Endowment Plan?

Like a typical endowment plan, a child endowment plan is a life insurance policy that offers dual benefits of life insurance and savings plan in one policy but comes with additional benefits. In this plan, a policyholder, in addition to having the flexibility of choosing a sum assured amount as per their financial requirements, also guarantees a payout in the event of the parent’s death or when the child attains an age of adulthood. In addition, you also get regular bonuses on an endowment plan.

These features make a child endowment plan the best investment plan for a child that a parent must choose for investing in their child’s future, while ensuring an excellent financial growth of the invested funds.

*Note: Different policies define adulthood or child maturity age differently. Thus, it is suggested to read policy documents carefully.

Benefits of a Child Endowment Plan

Other than the primary benefits of an endowment like life insurance benefits, maturity benefits, and loan benefits, there are additional benefits of a child endowment plan.

Let’s have a look at some of them:

  • Tax benefits of a child endowment plan

Under Section 80C and Section 10 (10D) of the Income Tax Act, the premiums you pay for a child endowment plan (of up to ₹1 Lacs) and the maturity benefits are exempted from tax.

  • Flexibility on premium payment

Individuals can pay the premium at once or in regular, timely premiums, whatever fits their preference. However, it must be noted that an endowment policy’s premium(s) payment depends on the sum assured.

  • Guaranteed maturity benefits

When you look for a child endowment plan, a guaranteed maturity benefit is assured. It means you can be assured about your child’s financial security while having a life insurance cover.

In addition, the policyholder will receive a lump sum payout. These payouts are a huge collective amount that a policyholder receives when the policy attains maturity. This type of payout can help you take care of significant financial liabilities like higher education for your child or their marriage expenses, amongst other important things. In addition, this amount serves as a substantial corpus for their requirements.

Features of a Child Endowment Plan

Here is a list of the essential features of a child endowment plan:

- The minimum age criteria to own a policy is 91 days. This means the child must think of 91 days old to hold a policy.

- The maximum age criteria to own a policy is 13 to 15 years based on the policy guideline of different insurance providers.

- The minimum sum assured can be ₹1 lakhs.

- The maximum sum assured can be up to ₹1 crore. However, other child endowment plans have no upper limit.

Experts believe that the best time to buy a policy is today. And when it is about the financial stability and security of your children and their future, you must opt for the best investment plan for child. Endowments assure your children will be financially stable. Additionally, your children will have a monetary corpus at their disposal.

Kotak e-Invest

In this policy, the investment risk in the investment portfolio is borne by the policyholder.

Download Brochure

Features

  • Return of Mortality Charges*$
  • Enhanced Protection
  • Multiple Plan Options
  • Zero Premium Allocation Charges
  • Tax Savings^

Ref. No. KLI/22-23/E-BB/521

T&C

Browse our library of resources

- A Consumer Education Initiative series by Kotak Life

Similar Articles

Savings vs Investment: Know the Difference

Beginner's Guide to Wealth Creation: Meaning, Strategies, & Importance

3 Tips to Buy Guaranteed Savings Plan

ULIP vs FD - Which is Better and Why?

Why Should You Consider Guaranteed Savings Plan for Long-Term Investment?

Customising investments to manage your wealth

Which are the Best Investment Plans for Indian Senior Citizens in 2022?

Learn About Safe Investments with High Returns in India

ULIP Investment Strategy: Top Tips to Improve Your ULIP Gains

Best One-Time Investment Plans in India

How to Increase Net Worth Along with Family Protection

Why Do You Need A ULIP Plan - All You Need To Know

Which is a Better Investment - Mutual Funds Or ULIP?

ULIP as an Investment for Your Child

How to Manage Inheritance Money?

Top 5 Investment Options in 2022 for Healthy Returns

How Does an Endowment Plan Work?

Debt ULIPs vs. Debt Mutual Funds: What's the Difference?

Best Investment Options to Cover Your Child's Education

Learn About Safe Investments with High Returns in India

How Much Wealth Can You Create from ULIP in 10 years?

What are Mutual Funds?

उच्च रिटर्न प्राप्त करने के लिए सर्वश्रेष्ठ इन्वेस्टमेंट विकल्प

4 Benefits of ULIP Fund-Switching Feature

What are Some of the Safest Investment Options in India?

Difference Between Passive and Active Investing

How To Track ULIP Performance?

How Do One-Time Investment Plans Work?

How to Start Saving Money in 10 Simple Ways?

Investments Options to Buy a house in India

Safe Investment Options with High Returns for FY 2018-19

Why ULIP is Better Investment for Long-Term Wealth Creation?

Top 5 Principles That Need to be Followed for Wealth Creation

What is a Savings Plan and What are is Benefits?

Things to Know Before Buying an Endowment Plan

Factors Affecting Stock Markets

What is the Importance of Saving Money?

What are the Best Investment Options for Students in India?

Early Investing and the Power of Compounding

Important Questions You Must Ask Yourself When Buying a ULIP Plan

Savings Plan for Grandchildren

How to Make Your Financial Portfolio?

Long Term Savings Plan - Best Savings Investment Plans in India

How To Diversify Portfolio In 2022?

Planning for Your Child's Higher Education? Explore These Investment Options

Which is Better – FD, Mutual Fund, SIP, or ULIP?

How to Fulfil Your Financial Goals in the Next 10 Years?

How to Manage Your Portfolio Like a Professional?

Is This The Right Time To Invest In ULIP? Why or Why Not?

What are the Best Investment Options For Females?

Successful Financial Planning for Urban Women

What are the Best Investment Options for Beginners or Amateur Investors in India?

Difference Between Guaranteed Savings Plan and ULIP

Can ULIP Help in Achieving Short-Term Financial Goals?

Best Investment Options in India in 2022

What are the Best Short-Term Investment Plans with High Returns?

How Can a Legal Nominee Claim ULIP Benefits are the Policyholder’s Death?

Benefits of ULIP as a Child Insurance Plan

Top 10 Investment Strategies to Create Wealth

Short Term and Long Term ULIP Plans for Wealth Creation

Endowment Plan vs Fixed Deposit?

What are Deferred Savings Plans?

How To Invest Money In ULIP?

What is Fund Switch in ULIP? And ULIP Fund Switching Techniques

How to Cancel ULIP Policy?

ULIP Benefits You Can Avail from Early Investing

Planning Financial Goals and Objectives of Financial Planning

Difference Between Guaranteed Savings Plan and Guaranteed Income Plan

Building wealth through regular investing

Investment Options for NRIs in India

Are Money Back Policies Helpful? A Complete Guide

What are the Best Investment Options for Young Adults?

Receiving regular payouts at various stages of life

Importance of Portfolio Management

Asset Allocations in ULIP - Know the Top Benefits

How to Plan Savings from Salary?

Creating a second source of income with life insurance

What is better - Guaranteed Savings Plan or Fixed Deposit?

How to Plan Your Child's Education - A Step-by-Step Guide

Different Types of Endowment Plans

Complete Savings Plan for Low Income Earners

Top 6 Investment Plans Available in India

How is the Compound Annual Growth Rate (CAGR) Calculated in ULIP?

Basics of Guaranteed Savings Plan

What's Better for Your Child's Education? Child Plans or Mutual Funds?

What is ULIP Renewal?

What are Tax-Deferred Savings Plans?

4 Important Tips to Maximize Gains with ULIP Investments

ULIP Plan as a Gift

How to Plan your Investment to Achieve Periodic Financial Goals?

Why Should You Invest in Term Insurance And ULIP?

Why is Portfolio Diversification Important? How to Diversify Your Portfolio?

Are Gains from ULIP Sale Taxable?