Benefits of a Child Education Plan

The returns would be sufficient enough to help your child meet his future needs even when you are not around.

There is really no better gift than financial security to your child apart from love. To help you understand better, below are some of the benefits of buying a child education plan:

Fulfilling Your Child's Dreams

If you start investing in a child education plan now, the fees will be much higher when your child actually plans to take up the course. But with a child education plan, you don't need to worry about what course your child will pursue. Depending on his interest and skills, he can take up any course as per choice. He would be able to fulfill his dreams and career goals with the sum insured provided by the child education policy.

So, start investing wisely now. The accumulated corpus at the time of maturity will be sufficient to pay for the exorbitant college fees. The child will get the maturity benefits at the end of the policy term to ensure that the dreams are turned into reality. You can choose from several child education plans.

Protection In Case of Unforeseen Circumstances

One of the major benefits is the financial cover to the child in case of the death of a parent. The insured child gets at least 100% of the sum insured amount. The policy continues to provide for higher education expenses, as the maturity amount is approximately 10 times the premium cost.

Maturity Benefit to Meet College Expenses

As you can see, the cost of education is soaring at 10%, which is much higher than the economic inflation. The cost of a B.tech course has been hiked to Rs. 2 lakhs from Rs. 90,000. Therefore, it is no less than a necessity to invest in a child-saving plan that would offer sufficient funds to help your child meet all the key educational milestones in his life.

Options to Choose Add-ons/ Riders

Even when you have bought the best saving plan for a child, you should enhance it further with rider benefits. You can choose a child plan that offers a waiver of the premium you have paid during the policy term if anything untoward happens to the policyholder—other rider benefits like personal accident insurance rider benefit cover-up for severe accidental injuries and accidental deaths.

Permits Partial Withdrawals

During the policy term, you can withdraw money to fund a special course your child wants to take up, like learning an instrument or acting, etc. Certain plans offer periodic pay-outs to help you pay for the expenses incurred while enhancing your child's talent.  

Fund Your Child's School Fees

In case the parent who has purchased the child's education plan dies. The insurance company immediately pays a percentage of the sum assured immediately, and a certain percentage is paid annually until the end of the policy term. The amount paid is sufficient to pay off your child's school fees even in your absence.

Avoid Loss of Capital

Due to market fluctuations, even your investment returns can vary. A dynamic fund allocation strategy needs to be adopted to make the most of the amount invested and save it from capital loss. You can also opt for a Systematic Transfer Plan or STP and fund selection to plan your investments according to expected returns and the amount that will help meet the different milestones. With STP, you can switch to a different fund unit when the market is volatile.

Avail Income Tax Benefits

The premium paid on a child education plan is eligible for tax deduction under Section 80 C, up to a limit of Rs. 1.5 lakh in a year. You can also avail of tax benefits on the maturity amount under Section 10(10D).

So, there were the key benefits that a child education plan can offer apart from being a great investment scheme. Don't you feel like securing your child's future today by investing in one of the best saving plans today?

Conclusion

It is crucial to arrange funds for your child's education much in advance. A child education plan can help you be financially prepared for any challenge that can otherwise ruin your child's career. You can start by paying a small amount of premium now and be future-ready.