userYou want to provide quality education to your child. A child education plan allows you to stay financially prepared for your child’s education needs. These plans help you accept your child’s future needs and provide you with returns that help you fulfill your child’s goals. So, in this article, we will talk about Child life insurance plans for your child.
These plans can offer the following benefits
Immediate Assistance for Financial Emergencies
Child education plans offer the benefit of direct financial assistance in case of any financial emergency. Some child plans offer you the flexibility to withdraw money from the plan partially in times of need. This feature of the plan is called Partial Withdrawal and is available after 5 years since purchasing the plan.
Tackling Rising Education Expenses
Inflation increases the cost of goods and amenities over time. This could apply to education expenses as well. This is why planning and saving for your child’s education is important. The returns from your child’s schooling plan can help you beat inflation and stay prepared for your child’s education expenses. These returns can be used to cover the cost of tuition fees, books, travel, and other educational expenses.
Offering Collateral for Securing Education Loans
Child education plans can be used as collateral when applying for education loans. The collateral can help you get a lower interest rate for the loan. You may also get a high-value loan if you have collateral in place.
Protecting Your Child’s Future
Child education plans ensure that your child receives the education he/she desires with a lump sum payout at maturity or in case of an unfortunate event. It acts as a safety net to make sure that your child’s education does not get affected, no matter what!
Returns on investment
Child education plans offer the potential for high returns on investment. These plans may offer you the ability to invest your money in equity, debt, or a mix of both funds. With a long-term investment horizon, these funds suggest the opportunity for higher growth. This can help you meet your child’s future needs.
What are Child Education Insurance Plans?
Child education insurance plans are insurance plans that provide revenue for your protection and savings needs to secure the future of your children. As a parent, one of your most important goals would be to make it indisputable that your children have a bright future and lead their lives comfortably. These plans can help you achieve this by saving for your children’s higher education at an admired university.
In our Child Education Insurance Plan, you pay percentages for a specified period (monthly, half-yearly, yearly, or single pay). Once the policy term ends, you receive a lump-sum amount called the Maturity Benefit. In the situation of an unfortunate event during the policy term, the company offers your nominee the life cover amount. The company also waives the future premium payments* for the remaining policy tenure to ensure that your children’s future is always secure. This profit is available, provided all due premiums are paid.
Are Child Plans Tax-Free?
Child plans offer tax benefits under The Income Tax Act of 1961. The premiums paid under the policy qualify for tax deductions up to ₹ 1.5 lakh in a financial year subject to conditions under Section 80C of the Income Tax Act 1961. Further, the benefits received during the plan’s tenure and on completion of the policy period are also exempt subject to conditions under Section 10(10D) of the Income Tax Act 1961.
How much should you invest in a child plan?
Education is the key to a bright future. Regardless of what stream or career your child chooses, ensuring that they go to a good school and college is your prime responsibility as a parent. Considering the fact that India is a developing country, the children of today have a massive role to play in the growth of the nation tomorrow. All of this can be achieved with a proper education. Not only does education open the realms of a financially secure life, but it can also help children develop an open mind and live a more mentally and physically balanced life.
Sum Up
The cost of education can be overbearing in some cases. As per a study conducted in 2019, it was found that the cost of education from primary classes up to post-graduation was ₹ 8,331 for a year for each student. This is only a general estimate that includes all types of schools and colleges across the country. The fees for private schools and colleges are a lot higher than those for public or government schools. Professional courses such as engineering, medicine, and others can be even more expensive. If you combine these costs with inflation, the final figure will drastically increase further. It is hard to cover these costs with a limited source of income. That is why, with a life insurance plan, you can ensure that your child’s future and dreams are financially secured, even in your absence.
Rahul Khanna
