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Waiver of Premium in child plans ensures financial security for children if parents can’t pay, offering affordable, tax-free protection for future needs.
Waiver of Premium: The Most Important Feature in Child Investment Plans
Every parent’s deepest instinct is to protect their child’s future. Irrespective of life’s uncertainties, they want to ensure that the child’s dreams, education and milestones remain uninterrupted. That’s why many parents invest early in long-term financial plans, like a child investment plan that helps build a corpus for higher education and future goals. These plans form the foundation of responsible financial planning, offering both peace of mind and a sense of preparedness.
Yet, as life unfolds, unpredictability can test even the most careful plans. A sudden illness or accident that ends up in untimely death can bring everything to a halt. But does it have to be this way? To prevent such disruptions, a simple but powerful feature known as the Waiver of Premium ensures that a child’s future remains financially secure, even if the parent can no longer contribute.
Understanding the Waiver of Premium feature
At its core, the Waiver of Premium feature acts as a financial continuity clause. In the event of the policyholder’s death, the insurer automatically takes over all future premium payments. The policy continues exactly as intended. The child remains financially covered, and the corpus continues to grow without interruption.
In other words, the insurer steps into the policyholder’s role as the premium payer, ensuring the promise made to the child is honoured till the end. The beauty of WOP lies in its simplicity. It transforms uncertainty into continuity and ensures that a family’s financial planning never loses its purpose, even amid adversity.
It’s important to note here that no other instrument in the market offers such a powerful feature that takes care of your dependents even in your absence.
Affordable protection that every parent can access
Despite the strength of this protection, the Waiver of Premium is remarkably affordable. The feature is typically available for less than one-fifth of the total premium, making it one of the most cost-effective safeguards parents can include in their financial plans. For a modest additional amount, it ensures that the child’s insurance cover and investment fund remain active even in the parent’s absence.
In the context of rising lifestyle illnesses and long-term health risks among younger adults, this affordability is significant. Studies indicate that critical illnesses and chronic conditions are increasingly affecting people in their 30s and 40s — the very age group most likely to be saving for their children’s education and future. A feature like WOP ensures that such shocks don’t derail a decade’s worth of disciplined savings or insurance continuity.
Why WOP belongs in every child-focused plan
Child investment plans serve an emotional goal of securing the child’s future. Yet, without the Waiver of Premium feature, this safety net can have a weak link: the possibility of policy lapse due to non-payment of premiums. By integrating WOP, parents ensure that this risk is eliminated. The child’s milestones — from higher education to career beginnings — remain financially protected as planned. Also, the fact that the maturity value is completely tax-free (provided your annual investment in ULIP is less than 2.5 Lacs and bought after Feb’21) unlike the LTCG tax applied on other equity investments makes it even more powerful.
On this Children’s Day, as parents think of ways to invest in their child’s future, this standout addition is one of the most meaningful choices they can make. It’s a quiet assurance that a child’s financial journey will continue uninterrupted, steady, and secure — no matter what happens.
The views expressed in this article are those of the author and do not represent the stand of this publication.
November 14, 2025, 08:00 IST
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