Give Your Child The Best Education With 1 Life Hack

financial planning child education

Children are a bundle of happiness. However, along with the immense joy they bring to one's life, they are accompanied by several responsibilities causing impactful financial changes of your life. 

Being a parent, it is your responsibility to nurture your child and provide them a good life with utmost care until they become capable of living on their own. The best you can do for your children is to protect their future and allow them to achieve their dreams. 

A child education plan is a great way to save money for the betterment of your child in the future. Moreover, in addition to the financial benefits involved with this savings scheme, you can enjoy several tax-saving benefits as well. 

If you were already looking for a way to provide your child the education they deserve, this plan is certainly a perfect match for you. However, if you are still not convinced, you must have a look at these five good reasons why you must have an educational plan for child for their bright future: 

1. Educational Requirements 

The primary cause of concern for Indian parents in their child’s future is the growing costs of education at these times. Getting admission for your child in a good school requires a lot of financial resources, and will surely come cheap. Moreover, as time passes, your child might decide to study abroad or enroll for a degree that costs a fortune. This calls for the need to plan and invest in a child education plan that helps you get relief from this burden. 

2. Critical Illness Protection

If there is any specific illness that is traced in the health history of your family, there is always a risk of the same disease happening to your child. Therefore, you need to plan for it earlier when your child is completely healthy and living well. This will make sure that you can cover the medical expenses of your child in case of any unprecedented times, and prevents your family from encountering a financial burden unknowingly that may even affect their lifestyle. 

3. Money-Saving Habit 

With an educational plan for children, you can enjoy two benefits, including the advantages offered by investment and insurance. Before you proceed to purchase an education plan for your child, you need to calculate your financial requirements throughout the various stages of your life. 

Additionally, you also need to determine your existing savings for the primary and higher education of your child. Make sure that you keep other financial burdens like mortgages in mind as well. Once you’re done with the research choose a plan that fulfills your requirements in a better way. 

Although the plan might feel like a burden to you at the beginning of your term, the premiums that you’re paying periodically will take no time in becoming a habit for the betterment and well-being of your child and support their higher education. 

4. Death of Parents 

Death is inevitable, and nobody knows what could happen the next second. In case of your sudden demise, your child will be affected the most, both emotionally and financially. Therefore, you need to cover up things before leaving this world forever. 

With the help of a child savings plan, your child can gain a waiver of the monthly premiums, along with a lump sum amount of money that makes sure they can support the daily requirements of their life without depending on anyone else. 

5. Loan Collateral 

Nearly all the banks readily agree to accept child insurance plans as collateral in case you need a personal or educational loan for your child. This helps your children achieve their educational dreams without any hassle and follow their interests.

Things To Know Before Choosing A Children Education Plan 

In a country like India, the most substantial financial funding that parents need is for the education of their child. Before you proceed with an education plan for child, you must consider the things stated below: 

1. Premium Waiver Benefit 

While choosing a child-saving plan, you need to make sure that it offers a premium waiver benefit. It is necessary because in case the policyholder dies, their child might not be able to pay the premium amount, and this benefit waives off the entire amount. 

2. Understand Your Risk Appetite

If you can bear higher risks and want maximum returns with your child saving plan, you can consider investing in equities and choose unit-linked child plans for a long-term contract such as ten years or even longer, based on your health and financial condition. These will offer you better returns that can help you grow your child’s funds gradually. Ideally, you should maintain a mixture of growth and debt in addition to a risk cover to get the most out of your investment. Make sure you choose a plan that offers a system transfer option. 

3. Endowment Plan For Lower Risk

If taking risk isn’t your cup of tea, and you’re looking for a guarantee along with your financial plan, there’s no better option than an endowment plan for you. It provides you a good cover amount while protecting your funds from volatile changes in the market. 

4. Bonus Payouts

Before you proceed to purchase a plan, you must check the available bonuses for which you are eligible. Generally, the bonuses will usually get accrued in the first year, and then add up to the total corpus in the end. 

Additionally, you must also consider determining the type of bonus that you are likely to receive. For instance, if the available bonus is revisionary, you need to find out whether it’s simple or compound, and make a final decision.

The Takeaway On Childhood Education Helpful Hacks

Consider a children's educational policy as an asset to help your child achieve all their dreams. If you read this far, you surely may resonate with the benefits associated with these plans and know why they matter for the well-being and betterment of you and your family.

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