Deferment Period Under a Child Plan

IndiaFirst Life
• 09 Apr, 2025

Deferment Period in Child Insurance Plans

When you are planning for your child’s future, setting aside a solid amount of funds is important. Strong financial support will allow your child to pursue their dreams and live a stress-free life. A child insurance plan can be a great way of ensuring this.

Child plans are a type of insurance product wherein the main motive is to financially protect the child’s future, especially in case of the parent’s unfortunate demise. As the child is the main beneficiary of the product, it will have a deferment period until the child reaches a particular age.

If you have plans to buy a child insurance plan, it is crucial to know about the deferment period. Let’s learn more about it.

Understanding the Deferment Period in Child Plans

1. A child insurance plan is an insurance product that has majorly two features:

It provides life insurance coverage, which means in case of the life insured’s demise, the beneficiary (the child) receives the sum assured amount.
It provides financial payouts to the child on reaching a particular age or milestone.

2. As with other insurance products, you need to pay a premium for the child plan to keep it active. These premiums help build a corpus for your child.

3. The period from the policy purchase until the child reaches adulthood or a particular milestone is called the deferment period. Once this period ends, the child receives the benefits of the plan.

4. The term ‘defer’ means ‘to delay something’ or ‘to postpone’. Hence, when you buy a child insurance plan, you do not get the benefits immediately, as your child is likely a minor at the time. The benefits of the child insurance plan get deferred and potentially increase until your child reaches adulthood or a specific milestone, like going abroad for higher education. This allows them to use the funds for the right purposes.

5. Note that the life insurance coverage of the plan is active during the deferment period.

Example of Deferment Period:

Mr. Shivam, 45, bought a child insurance plan for his 10-year-old daughter. He wants to secure funds for her higher education, which she will pursue when she turns 18 years of age. Since she will be able to receive the funds and use them for her education only after 8 years, the deferment period in this case can be understood as 8 years.

The life insurance cover of the plan also gives Mr. Shivam better peace of mind. He can rest assured that, if any unfortunate event were to befall, his daughter would have a solid financial backup to support her.

Benefits of Having a Deferment Period in Child Insurance

If you are wondering whether it is a good idea to opt for a child education plan with a deferment period, here are some benefits you can consider:

Allows the Corpus to Grow

A longer deferment period gives your funds a larger time frame to grow. That is why, it is also recommended to start a child insurance plan at the earliest. By the time your child is eligible to receive the benefits, the plan will have accumulated a substantial amount.
Provides Coverage against Unfortunate Events

As stated earlier, the life insurance coverage is active during the deferment period. If the life insured passes away due to an unfortunate event, the beneficiary of the plan will receive the sum assured amount. This can give them the financial support they need to pursue their goals.

In addition, the policyholder can also opt for add-ons, such as the waiver of premium rider. With this add-on, the child education plan premiums are waived off if the life insured passes away/is unable to pay the premiums for certain specified reasons. So, the benefits of the plan are certain regardless of an unforeseen event.
Allows Flexibility at Various Stages

Insurance providers allow you to customise several aspects of your child education plan. This includes the premium payment term, the payout frequency, the riders, and the deferment period. If you want to have a longer deferment period to suit your child’s unique goals, you can opt for it.
Gives the Right Support to Your Little One

A child needs support from various areas to become the best version of themselves. With the rising cost of living, financial support is of the utmost importance. The deferment period is designed to ensure that your child receives the funds they need when they need it. This gives a child the freedom to chase their dreams, whether it is to take up admission at a foreign university or start their own business.

The deferment period in a child insurance plan is an important feature that enables you to grow your funds slowly and steadily. You can park small amounts which can grow gradually into a substantial corpus and help your little one in their future. Ensure to research various factors, such as your child’s current age, their goals, your budget, and so on, to make a well-informed decision.

by IndiaFirst Life
Headquartered in Mumbai, IndiaFirst Life Insurance Company Limited (IndiaFirst Life), with a paid-up share capital of INR 754.37 crore, is one of the fastest growing private life insurers in India in terms of New Business IRP in Fiscal 2023. Our key differentiators are our simple, easy-to-understand products that are optimally priced. As of Sept 30, 2023, we offered 30 retail products, 13 group products along with six riders (across retail and group portfolios), along with policies under the PMJJBY scheme, catering to protection, savings, health and retirement needs of our customers, leveraging multiple distribution capabilities and augmenting various investment options. In all propositions under the categories of Participating Plans, Non-Participating Savings Plans, Non-Participating Protection Plans, Unit Linked Insurance Plans, Group Protection Plans, Corporate Funds Plans, Riders & PMJJBY form a complete suite of offerings that help our customers prepare for the certainties of life. Our products are easy to understand and optimally priced with a developed comprehensive risk management framework/policy.