1. What is the ideal age to start a one-time investment plan for a child?

It is never too late to start investing for your child's future. It is recommended that you start a one-time investment plan for a child immediately after birth. Starting early provides a longer investment horizon, which can help you earn higher returns. Even if you did not start at birth, invest as soon as possible to ensure that your investments get more time to grow. This can enable you to secure your child's financial future.

2. What are the benefits of a one-time investment plan for a child?

As a parent, you want your child’s future to be secured, no matter what! A one-time investment plan for your child can have several benefits. A unit-linked child plan allows you to invest in various funds, such as debt, equity or balanced funds. This can help you earn potentially higher returns while mitigating risks. Moreover, these plans typically include a life cover to ensure that your child is financially secured even in your absence. These plans may also allow partial withdrawals to ensure you have access to your savings in case of emergencies. These plans provide tax^* benefits.

3. How can I monitor the performance of my child's one-time investment plan?

To effectively monitor the performance of a single premium child plan, it is essential to stay informed about market events and regularly review your portfolio. You must conduct a thorough assessment at least once a year. You can compare the returns from your investment with other similar financial instruments to evaluate its performance. It is also important to consider inflation when reviewing the returns from your investments.

4. Are there any tax^* implications associated with a one-time investment plan for a child?

No, there are no tax^* implications associated with a one-time investment plan for your child. The amount received on maturity of a child plan is tax-free^* subject to conditions under Section 10(10D) of The Income Tax Act, 1961. Additionally, premiums paid towards such plans are eligible for deduction up to ₹ 1.5 lakh per annum under Section 80C of The Income Tax Act, 1961. These benefits can help reduce your overall tax liability and maximise your returns.

5. What should you consider when buying a one-time investment policy for a child?

You must consider several crucial factors when purchasing a one-time investment plan for a child. It is important to ensure that the plan aligns with your long-term financial goals and your child’s dreams. You must consider factors such as the desired maturity date, the purpose of the investment, such as education or marriage and the level of risk you are comfortable with. The plan must also fit into your budget to ensure you can stay invested while also managing your current financial needs. You must also take into account the reputation of company you are investing with. You can look at factors such as the insurer's track record, customer service reputation and financial stability to ensure your child’s financial future is secured.