In Unit-linked plans, the investment risk in the investment portfolio is borne by the policyholder

As a parent, you do all that you can to secure your child’s bright future, including having a strong financial plan which keeps them financially protected even during uncertainties. Child investment plans are ideal for building up a financial reserve to fulfil the dreams of your little one. These plans ensure that you have adequate financial resources available at every milestone of your child's life. The in-built life cover2 acts as a safety net in case of an unfortunate event. Here are a few reasons why you should invest in child investment plans.

Reasons to invest in a child investment plan

Funding for children's education

While securing your child’s future, planning for higher education is crucial as your child grows, a major chunk of your savings will get spent on education. With an investment for child education, you can create the necessary funds so that your child can pursue their dream career. You can find out how much you need to save for your child's higher education using this children's education cost calculator.

Flexibility to withdraw^ part of funds

Choosing a child investment plan that allows you the flexibility to withdraw money as per your child’s needs ensures that you have easy access to a part of your money while the rest of your invested money keeps growing.

Habit of saving

Child investment plans foster a habit of disciplined savings. Regular contributions towards child investment plans help you save for various stages of life like, primary and secondary education, higher studies, wedding and many more. With proper planning, you can secure your child’s future, against all adverse situations.

Protection4 against uncertain times

Many child plans offer benefits like a waiver of premium. This ensures that future premium payments do not need to be paid in case an unfortunate event occurs. The investment continues to grow without the need to pay premiums, and provides a lump sum payout at maturity. This ensures that your child’s dreams are secured, no matter what.

Collateral for loans

An advantage of investing in child investment plans is that they can be used as collateral for a loan. If you plan to apply for a personal or education loan for your child, you can use the child plan as collateral for hassle-free loan processing.

Benefits of investing in a child plan

Below are some benefits of investing in child investment plans:

Benefit of investment and protection4

Some child investment plans like ICICI Pru SmartKid with Smart Life offer the dual benefit of life insurance and investment. These plans help you grow your wealth and provide you with a life cover2 as well.

Tax** benefits

Some Child investment plans like ICICI Pru SmartKid with Smart Life offer the below deductions** as per The Income Tax Act, 1961:

  • The premiums you pay towards the plan are eligible for deductions** up to ₹ 1.5 lakh per annum under Section 80C
  • The payouts received from the plan are tax-free** subject to conditions under Section 10(10D)

Takes care of your child’s education

If you have invested in a child plan, you may not need to take an education loan to support your child’s education. This will also save your child from paying the interest that comes with an education loan. By investing in a child plan, you can systematically build enough funds for your child’s future.

Emergency funds

Child investment plans can keep you financially prepared in case of an emergency. These plans provide the option of making partial withdrawals in the case of an unforeseen event, hence, providing you a financial safety net to depend on.



Child investment plans keep you and your child financially prepared for rising education cost, unforeseen ailments, and unfortunate events. It is crucial to start planning for your child's future as early as possible. This provides a longer time-frame for your investments to grow and balances out the risks involved. It also helps in beating inflation by generating returns which are higher than the rate of inflation.

While purchasing a child plan, you need to choose your investment instrument carefully to ensure that your child stays financially secured. You can consider investing in ICICI Pru SmartKid1 child plan. It is a comprehensive plan which has a life cover2 that offers your child financial stability, protection4, and support to fulfil their dreams. It allows you to invest your money in equity and debt funds as per your risk appetite and create wealth that can benefit your kids when they need it. You can invest small sums regularly without having to bear the burden of a lump sum investment. Thus, when your child is ready, a large amount3 is also ready to fund their goals. So don’t wait any longer, invest today in your child’s future.

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1 In ULIPS, investment risk in the investment portfolio is borne by the policy holder.

2 Life Cover is the benefit payable on death of the life assured during the policy term

3 Fund Value is the total value of your money that is invested in equity and debt fund of your choice.

4 Sum Assured is the fixed minimum amount your family receives in your absence.

^ Starting from the 6th policy year, a part of the funds can be withdrawn. This can be done at any time, provided monies are not in DP Fund. You can make unlimited number of partial withdrawals as long as the total amount of partial withdrawals in a year does not exceed 20% of the Fund Value in a policy year. DP Funds refer to Discontinued Policy Funds and consist of money from lapsed policy.

** Tax benefits under the policy are subject to conditions under Sections 80C, 10(10D), 115BAC and other provisions of the Income Tax Act, 1961. Goods and Services Tax and cesses, if any, will be charged extra, as per applicable rates. Tax laws are subject to amendments from time to time. Please consult your tax advisor for details before acting on the above.

ICICI Pru Smart Life UIN: 105L145V07


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