A child’s education can determine the kind of life they will lead in the future. That is why many parents consider it a high-priority task. Good quality of education comes at a high cost. All have related high expenses from school to higher education in foreign nations. So, you have to remain prepared to pay a high amount to keep your child’s dreams on track for success. So, it is important to start investing in a child education plan as early as possible. By doing that, it will be easy for you to invest and receive a high amount of money which you can divert towards higher studies.
What is Child Plan?
A child plan is an insurance plan that helps you protect your child’s future and create savings for them. It will provide you with a lump sum amount of money at the time of maturity. And you can use it to meet the expenses of your child’s higher education. This plan also provides life coverage and financial security to your child in case of any unfortunate event with you. Your child will get maturity benefits once they turn 18.
5 Reasons Why a Child Plan is Essential
A child education plan helps secure your savings and use it for your child’s future. You have to pay premiums for a periodic time. You can pay it monthly, half-annually, annually, or in a single payment. Once the policy expires, you will get a lump sum amount of money known as maturity benefit. Even if any tragic event happens to a policyholder, the insurance company extends the sum of life insurance cover to the nominee. The insurance company will also waiver the future premium payments and guarantee a safe future for the child. There are many reasons why you should invest in a child plan and given below are top five of them.
Security for Child’s Future Goals
Child plans provide the benefit of both investment and insurance. Before selecting any child plan, it is important to calculate your current expenses, analyze future expenses, and then start investing. By doing so, you can collect funds from the plan and use it for your child’s marriage, higher studies, and other expenses during the various life stages.
Coverage For Your Child’s Education
The most common concern of every parent is the rising cost of education. And this inflation will only continue rising in the future. If you want to offer the best education to your child, it will be wise to start investing in a child plan at the earliest while considering the inflation rates. Planning will help you put your hard-earned money in the best child plan.
Availability Of Different Varieties
There are several types of child plans available in the market. You can compare and choose any of the plans as per your requirements. If you want a guaranteed return, you can invest in an endowment policy or money-back policy. Also, if you do not mind taking risks, you can invest in market-linked ULIPs, which provide you with higher returns.
Income Tax Benefits
You can also get tax benefits under Income Tax Act, 1961, section 80C for the policy premiums you pay. Also, the maturity or survival benefits will be tax-free. It is one of the most useful advantages as it helps you accumulate a greater amount of funds for your child’s future.
The Facility of Partial Withdrawals
Like an insurance plan, most child plans provide the benefit of partial withdrawal in case of an emergency. You can also use these child plans as collateral to get loans from banks. This great feature converts your investment into a backup fund in emergencies.
It is important to plan your savings at the earliest for your child’s safe future. A child education plan helps you be financially prepared for any difficulty that may arise in your child’s education and life afterward