Education Loan VS Education Plan: What Helps In Building A Child’s Future Well?
Published On Jan 29, 2022 10:10 AM By InsuranceDekho
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It's difficult to plan for a child's future financial goals, and many parents mistakenly believe that a school loan will save them. Although an education loan may be a viable option, it cannot replace the need for investment in order to achieve the goal, as the child may also require help in other areas. While schooling and other costs can be covered with regular income, the cost of additional education is a different story. Given the difficulty of anticipating a child's future needs, as well as the high cost of a career-defining education, such as tuition fees, books, admission, and other expenses, which option would you choose: an education loan or saving for a child's education? (Educational strategy)
Education loan Vs. Education Insurance Plan
While many parents opt for a student loan to meet their needs, others opt for an education insurance plan.
- You can only utilize the money from education loans to pay for your child's education; however, if you save for the future, it will cover your child's education as well as other expenses.
- Education loans might assist you in paying for your child's education simply throughout that time frame. An education insurance plan, on the other hand, will prudently save and invest your money to ensure that your child's educational and other needs are met.
- You must repay the loan in equivalent monthly installments (EMIs) as soon as your child completes their studies and obtains employment, an education loan, like other loans, is a financial burden on your child and, by extension, you.
- More money comes with investment. You can invest in corporate bonds, government securities, stocks, and a variety of other things if you choose a ULIP plan. If you plan to invest for a longer period of time, such as 20 years, you can shift the premium from equities to loans after 15 years to avoid the effects of market changes.
- Education insurance plans Your family, especially your child, is deserving of your love and care. Invest (and reinvest) in a family insurance plan to cover everyone. In the event of unforeseeable events, your family can get the sum insured amount as immediate death protection.
- In comparison to student loans, child insurance policies come with a slew of tax benefits.
- Above all, education insurance policies allow you to avoid the entire debt repayment process. You can also withdraw a portion of your money and invest the remainder to spend later.
So, if you're a new parent looking to invest in a mutually beneficial plan that allows you to save and reinvest so that your child benefits later. Consider purchasing an education plan for your child. You can take out an education loan if you have enough money and have no plans to increase it; nevertheless, the peace of mind that comes from saving and investing your hard-earned money is priceless to you and your family. Finally, an education plan or a ULIP plan is an excellent approach to protect and invest. You also give your child financial security, allowing you to pay for their fundamental needs, such as education, therapy, and other minor expenses. You should be proud of yourself for self-funding your child's school and other necessities. It's up to you to take pleasure in it.
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Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.