A child education insurance plan comes with dual features of investment and insurance to provide your kid with financial security. Such a plan ensures that money is not a limitation for your children to reach significant milestones from their schooling to higher education. What's best, a child education plan allows you to financially support their dreams even when you are not there anymore to provide for your children.
Is It a Good Idea to Buy a Child Education Plan?
With the constant rise in inflation, education costs are continuing to increase globally. So, your savings may not be sufficient to secure a bright future for your kid. But the cost factor should not prevent your children from getting the education to achieve their career goals and stand out in the competition.
A child plan allows you to invest in your child's future in a way aligned with his/her future dreams, educational needs and also your current financial condition. The best child education plan even offers life insurance that's ten times your yearly income. So, it's certainly a good idea to invest in a child plan.
3 Reasons to Avail a Child Education Insurance Plan
The best child education plan in India can give you the following good reasons to invest in it:
- Long-Term Investment
The top child plan should offer exposure to secure returns and market-linked assets. In that case, you can invest for the long term and get the opportunity to receive more returns by choosing equity funds. As you near your goals, the policy can offer the necessary security by offering your child a fixed income.
- Goal Protection
You should protect your goal by opting for a life cover in the event of the unexpected death of the child's insured guardian. Nevertheless, the lumpsum payout might not be adequate. This is where insurance payouts following the major milestones of your child's educational journey can help. These can be joining a college or going abroad for an even higher degree.
- Different Risk Management Options
You may look forward to this benefit if you don't wish your investments to be subjected to too much market volatility. The best child education plan allows you to make the most of its risk management benefits. These can include systematic transfers, safety switches and auto rebalancing of funds to balance risks over the years and get enough returns to protect your child's future.
Besides, you can also get tax benefits under Section 80C of the Income Tax Act of India by investing in a child plan. The premiums paid up to ₹1,50,000 each year qualify for exemption from your taxable income. Plus the payouts of the plan are eligible for an exemption from taxation according to Section 10 (10D).
Apart from securing your child's future, you should also plan how to financially support your post-retirement years. For that, consider buying a good retirement plan in India and start investing in it from early on. You can get both a child plan and a pension plan from a reputed insurer in India.
