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  • Why you should buy a child education insurance plan
  • Get More For Small And Regular Investments
  • Child education insurance plans save you and your child!
  • How to choose the best child education plan
  • Invest in plans that offer premium waiver benefit
  • If you have the risk appetite then go for equity-linked plans
  • If you do not have the risk appetite, go for simple endowment plans
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What is Child Education plans?

A child education plan offers comprehensive benefit of life insurance cover along with maturity benefit. It can help you meet the expenses of your child’s future needs, even when you are not around. The plan can also be used as collateral for an education loan.

Why you should buy a child education insurance plan

You already know how expensive it is to live and educate yourself. Education will be even more expensive in the future. From school picnics, fancy dress  competitions, sports equipment to exorbitantly high tuition fees in school and colleges, you have to be ready to pay huge amounts for your child’s scholastic career.

By investing an amount of money regularly, your investments compound into a handsome sum in the future. This corpus would reduce the financial burden of higher education and take off the worry about making timely fee payments for your child’s university degree.

The most common way to arrange funds for expensive degrees is an educational loan. If you’re a young parent, you might already be paying your education loans right now. There may even be a car loan or home loan in your life. Why take up additional liability? That is the time when your savings that you started doing today will help you the most. A child investment plan takes away the pressure of applying for a fresh loan.

Through a child education policy designed for child education, you get the dual benefits of insurance and investments through the best child education plan. By adding a waiver of premium rider, no future premiums need to be paid in your absence. Even if something were to happen to you, your child’s dreams would not be stopped. It will help you in keeping the promise intact. Your children can go to whichever country and opt for whatever course of study they want.

You also get tax benefits with a child insurance plan. The premium is deductible under section 80(C), and the maturity amount is exempt from tax, unlike fixed deposits or equity shares, which attract a long-term capital gains tax.

Take the right steps at the right time; be the parent who is prepared for the future. Invest in the right child education policy that helps in securing your child’s future, in your presence, and even in your absence. Do note that even in your absence, the child plan pays for your kid’s education and makes their dreams come true.

How to choose the best child education plan?

There are a large number of child insurance plans in the market, so parents do not have it easy when it comes to selecting the best child education plan. Selecting an ideal child education plan is critical for the long term development of the child’s future. Given the competition for degrees and the spiraling  cost of education, there is pressure on both parents and children when it comes to higher education – pressure on children to perform and on parents to provide  adequate finances for the degree.

Invest in plans that offer premium waiver benefit

Most child plans offer premium waiver benefit – either as an option or as an essential feature of the primary plan. The premium waiver is particularly important as in case of the death of the parent, the insurer waives off future premiums while continuing to fund the life insurance policy  till maturity. This makes sure that the maturity benefit that was set for a certain age remains intact as planned, in addition to the death benefit paid.

If you have the risk appetite then go for equity-linked plans

If you have appetite for equities and a considerable investment time frame (at least ten years), you can consider opting for unit-linked child plans. It is established that over longer time frames equities give the best returns and parents must make the most of the opportunity. Ideally, the child plan must offer a balanced mix of growth and debt funds along with risk cover. Also, choose a child insurance plan that has the system transfer option to make sure your gains in the investment are protected.

If you do not have the risk appetite, go for simple endowment plans

If you have a lower appetite for market uncertainties and have an investment time frame of less than ten years, then equity-linked plans are not for you. Go for endowment plans instead. Although you won’t accumulate as much vis-a-visa child ULIP plan, but you will be adequately covered against market uncertainties.

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