What Are Child Education Plans? What Are The Benefits Of Purchasing It?
Published On Nov 08, 2021
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Your Child will encounter the same obstacles that you have, and it is your obligation to ensure that your child is prepared and equipped to deal with these issues when they arise. A Child insurance plan protects your child's future while also allowing you to save. If you do not live when the plan matures, you will be leaving money to help your child's future. Investing your hard-earned cash in a Child insurance plan.
What Is A Child Education Plan?
The kind of life that children will have in the future is determined by their education. That is why the majority of parents place a high value on education. Quality education, like everything else in the world, comes at a cost. Inflation affects this price, so even the most heavily subsidized institutions may charge a large cost by the time your child reaches adulthood.
As a result, you must start investing and building a corpus for their higher education right away. Child education plans are investment choices that are tailored specifically for your child's future financial requirements. These plans will make it easy for you to invest, grow, and provide for your child's goals.
Benefits Of Purchasing A Child Education Plan
There are several reasons why you should put your hard-earned money into a Child insurance plan:
1. A Financial Safety Net
By electing to acquire a child education plan, you may provide a financial cushion for yourself and your dependents in the event of future unforeseen circumstances. If your income drops or an unforeseen occurrence occurs that results in your death during the plan's term, your Child will have financial security and will be able to achieve their future goals and ambitions with the support of a child education plan.
2. Develops a Savings Habit
Investing your hard-earned money in a Child insurance plan will not only provide financial security for your child in the event of an emergency, but it will also encourage you to save. The skill of saving allows you to reap the benefits of years of discipline and devotion in the shape of a comfortable corpus later in life. Committing to investing in a Child insurance plan will assist an individual in developing a disciplined savings habit.
3. Benefit from Taxes
A Child insurance plan provides tax advantages on both the money invested and the money received as a reward. This is done primarily to encourage policyholders to enrol in a Child insurance plan and to alleviate financial burden. Furthermore, a Child plan has the added benefit of allowing you to reinvest the money you save on taxes. Section 10 of the Internal Revenue Code exempts a child insurance plan's maturity benefits and capital gains from taxation (10D).
4. Disability Insurance Coverage
The uncertainties that life presents from time to time are one of the most significant obstacles that a parent might face. If you have a serious impairment, it will have a detrimental influence on your employment and your ability to earn the same amount of money. A Child insurance plan can assist mitigate these risks by covering all future premiums, ensuring that a child's education is not jeopardised.
5. Loans With Collateral
If you're thinking about getting a student loan or a personal loan for your child, you should think about investing in a child education plan. Several banks would accept it as security for getting loans. For instance, if your child wants to pursue further education in India or overseas, investing in a child insurance plan will be quite beneficial to them.
You would never jeopardise your children's future, especially their education, as a parent. Investing in a child plan, on the other hand, helps you to prepare ahead of time and guarantee that your child is healthy at all times. Market-linked and traditional plans, as well as regular and lump-sum plans, are among the options for children. After weighing the different premiums and incentives, you should make your decision depending on your personal needs.