One day, our children will have the responsibility of carrying the future forward. But until then, it is up to us to ensure that they get the best aid possible when it comes to their education. Education in India can be a costly affair. Prices and fees for education as well as higher education have skyrocketed in the past few years. Parents with long term bank account savings too are finding it difficult to manage their children’s education. Nowadays, just savings are simply not enough to secure your child’s future. You need to have a plan in place as early as possible, so that when the time comes, you will have enough funds to pay for your child’s education.
What is a Child Education Plan?
A child education plan is a combination plan that involves insurance and investment, all to accumulate a corpus for your child’s future. It offers the right kind of financial aid to your child so that their future needs and requirements are taken care of. A child education plan also offers the flexibility of timely payments that coincide with major milestones of your child’s education.
How does a Child Education Plan Work?
A child education plan involves premium payments as a one time or regular payment system. At the end of the policy tenure, the maturity benefit is paid to the policyholder as a lump sum amount. You can also opt to receive regular payouts over a period of time instead of a one time payment. Additionally, Child Education Plans also offer a death benefit to the child if the parents pass away. This is a fixed assured sum. Some plans also waive off any further premiums if the parent passes away and yet pay out the maturity benefit.
Benefits of Child Education Plan
A child education plan offers multiple benefits to your child in terms of their future education. It will eventually help you build a corpus for your child that can be used when the child attains a certain age when they require higher education. During such an important time, a child plan ensures that you already have the funds ready for your child instead of trying to gather them from multiple sources.
Let us look at the benefits of a child education plan.
Accumulate savings for child’s education
The biggest feature of a child education plan is that it helps you accumulate a sizable corpus for your child. Your child’s education expenses will be one of the biggest expenses they require and they will turn towards you for the same. By the time the need arises, if you already have a corpus for them, then educating them further in whatever vocation they wish to pursue won’t be a hassle at all. Savings from a Child Education Plan can easily be used to pay for college education in India as well as abroad.
Secure Child’s Education even in Parents’ Absence
Yet another absolutely useful benefit of a child education plan is the death benefit that comes with it. A child is the parents’ responsibility, but if the parent(s) pass away unexpectedly, who will take care of the child? A child plan offers some relief during such a time by paying a death benefit to the child andalso waiving of future premiums in some cases.
Income Protection to Child
Some education plans also provide regular income to the child in the absence of parents. The child can then use the income for their day to day expenses. It is usually a small percentage of the maturity amount.
Thus, a child education plan has a tremendous positive effect on your child’s financial aid. If you wish to protect your child’s future, then a child savings plan is the way to go.