Both child education plan and child insurance plans is for ensuring a secure future for your child, albeit with a difference. Education plans as the name suggests is specifically for the ongoing education of kid, right from the time they enter school. There is predetermined maturity stages, which allow funding at definite periods related to your child’s growing up years. Child insurance plans on the other hand provide maturity full term amounts or compensates the child and allow them to continue their education in the event of unfortunate death of parent.
Here are some points of difference between the two.*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
Short-term V/s Long-term Plan
Most child education plans are short term. With quarterly or annual payouts on maturity of the sum invested. In such a kind of arrangement, you can project for the near future and get benefits at definite stages. For example, those who start investing in education plans when their child is in kindergarten can easily cover the primary education costs. Similarly, when you start investing when the child is in secondary phase, get maturity financial benefits during the college life of your young one.
Child insurance plans on the other hand are long-term investments that parents can choose for their children. One can start directly from the birth or even before that. The maturity tenure remains pre-determined and it covers the risks involved with the death of the parent.
Child education plans as the name suggests is only for covering the education cost of your child. This is a clear and precise plan that funds the costs related to studies in the various stages of student life. It is wrong to expect anything else from such a policy.
The scope of child insurance plans is far wider. The main aim behind the insurance plans for your child is to provide him or her with an uninterrupted chance at education irrespective of the presence or absence of parent. While nothing can substitute a well wishing parent, it will be wrong to deny the power of strong financial backing. Even when the policyholder dies or lose their job because of permanent disability, the child can continue with education in the same vein without problems, thanks to the child education plans.
Limited V/s Expansive benefits
There is no doubt regarding the fact that child education plans have a limited scope when it comes to related benefits. It is specifically for the education of your child. Child insurance plans on the other hand provide financial help, which the policyholder can spend any way chosen, albeit for the good of their child. Use the maturity amounts on your child’s education, wedding, or for giving them a start in life. The limit of use depends upon the scope of the imagination of the policyholder.
Child education and insurance plans both have definite benefits for the policyholder and the child involved. The difference lies in the tenure, the maturity period, as well as the benefits involved. Consider your individual situation or your expectations from a particular policy and start searching!