Plan for Child Education Insurance: Every parent wants to provide their kids the greatest education possible, but with the expense of higher education growing each year, this is becoming increasingly difficult. A child’s marriage and education require careful preparation. There must be some money set aside each month because these are typical goal-based programs.
You will need to plan ahead of time for a good education fund or for your child’s higher education; look for a fruitful mix of investment instruments and pay the required amount at the appropriate times.
To do so, you must first understand how child education insurance plans can help.
Child Education Insurance Plans: In Brief
Child Education Insurance Plans are concerned with your security and savings requirements in order to secure your children’s future. One of the most important goals of a parent is to ensure that their children have a bright future and live comfortably. These solutions can assist you in accomplishing this goal by allowing you to save for your children’s higher education at a prestigious university.
You pay premiums for a specific term with a Child Education Insurance Plan (monthly, half-yearly, yearly, or single pay). When the policy term expires, you will receive a lump-sum payment known as the Maturity Benefit. If an unfortunate event occurs during the policy term, the company extends the life cover sum to your nominee.
The company also waives future premium payments for the remaining policy term to ensure that your children’s future is secure indefinitely. This benefit is available as long as all required premiums are paid.
Why do you Need a Child Education Insurance Plan?
A Child Education Insurance Plan is essentially a life insurance policy that provides protection as well as a platform for saving money to ensure your child’s future security.
It ensures that your child receives the education they desire by paying out a lump sum at maturity or when an unfavorable situation arises.
It acts as a safety net to ensure that your child’s education is not jeopardized even if you are not present. Your child will have life insurance in the event of an unfavorable situation.
Here are a few more reasons to buy a child insurance policy.
5 Features of a Child Education Insurance Plan
Generally, Child education Insurance Plans offers the following features:
1. Lump-sum compensation
Some of the child insurance plans provide your children with a lump-sum gain in case of your demise within the policy term.
2. Waiver of premium
Your child won’t be troubled with premium amounts as the company handles it on your account. Hence, the policy remains to survive.
3. Partial withdrawals
You can obtain your funds throughout the term in the form of partial removals, subordinate to limitations. This takes care of your child’s various educational breakthroughs.
4. Tax benefits
Such a policy extends tax gains to the policyholder under section 80C of the Income Tax Act.
5. Loyalty addition and wealth booster
These plans may also extend loyalty addition and wealth booster advantages to assist you in growing your money without requiring you to spend extra money.
Two Types of Child Education Insurance Plans
There are various child insurance plans available in India. Buying the best child plan will help you in achieving the financial milestones that you have set for your children. To help you out, we have listed below two types of child insurance plans that are available:
1. Child ULIPS
A ULIP or Unit Linked Life Insurance Plan is an insurance policy that multiplies up as an investment. A portion of your money proceeds towards guarding your child, exactly like the regular child education insurance plan. The outstanding amount is funded in a mix of equity and debt.
Learn how to save for your child’s future by investing in a ULIP plan.
2. Child savings plans
Child Saving Plan enables the policyholder to fund in the plan externally any market uncertainty. It is a multi-faceted plan that offers life cover, maturity gains, and tax benefits, all in a single policy.
Child Education Insurance Plans – Myth v/s Reality
Myth 1: Child Education Insurance Plans cover a child’s life. It is unpropitious to purchase insurance in the name of a child.
Reality 1: Many child education insurance plans guarantee the life of the earning parent and not the child. The advantage connected with child plans is that the child’s future goals of seeking higher education are accomplished in case of the unfortunate demise of the parent.
Myth 2: Child Plan terminates if / when the parent dies.
Reality: The advantage of child education plans is that ordinarily, they offer a waiver of premium option, which the nominee can receive in an unfortunate death of the parent, the future owed premiums are waived off, and the policy continues. There is no influence on the gains due to being collected at maturity of the child plan.
Myth 3: The child insurance plan is fitting only for satisfying the education expenses for the child.
Reality: Child education plans are intended to take charge of the enormous expense of education for your child. Nevertheless, there is no constraint on utilizing the amounts obtained at periodic interludes throughout the policy term and maturity.
Example – If you funded a child’s education plan for higher education, your child decides not to proceed with additional education and utilize the funds instead for other responsibilities. They may do such irrespective of the primary object it was designed for.
Myth 4: The Child Insurance Policy bars investment for a prolonged period.
Reality: Most utmost online Child Insurance Plans are adjustable when it appears to Policy Terms. The policy term of most excellent market-linked child plans ordinarily varies among 5 to 25 years. This suggests the earning parent can withdraw funds, both partly and entirely if wanted quicker than thought.
To protect your kid’s safe and secure future, it is advisable to pick the finest child school insurance plan. However, with so many plans to choose from, it is understandable for someone to feel confused. This is where Canara HSBC Life Insurance can help. We have you covered by offering the best child insurance plans with outstanding features!