What Is Better For A Child's Future: An Education Loan Or An Education Plan?
Published On Mar 04, 2022 10:00 AM By InsuranceDekho
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It's difficult to anticipate a child's financial needs in the future, and many parents incorrectly feel that a school loan will save them. Although an education loan may be a reasonable alternative, it cannot replace the requirement for investment to attain the goal, as the child may require assistance in other areas as well. While regular income can fund tuition and other expenses, the cost of extra education is a different matter. Which alternative would you choose: an education loan or saving for a child's education, given the difficulty of anticipating a child's future demands, as well as the high cost of a career-defining education, such as tuition fees, books, entrance, and other expenses? (Strategy for education)
Education loan Vs. Education Insurance Plan
- Many parents choose a student loan to satisfy their financial demands, while others choose an education insurance plan.
- Education loans can only be used to pay for your child's schooling; however, saving for the future will cover your child's education as well as other expenses.
- Education loans may be able to help you pay for your child's education over a longer period of time. On the other hand, an education insurance plan will wisely save and invest your money to ensure that your child's educational and other needs are covered.
- An education loan, like other loans, is a financial burden on your child and, by extension, you. You must repay the loan in equal monthly installments (EMIs) as soon as your child completes their studies and secures employment.
- With investment comes more money. If you choose a ULIP plan, you can invest in corporate bonds, government securities, stocks, and a number of other assets. If you want to invest for a longer duration, say 20 years, you can convert the premium from shares to loans after 15 years to prevent market fluctuations.
- Plans that cover your education Your family, particularly your child, is worthy of your love and attention. To ensure that everyone is covered, invest (and reinvest) in a family insurance plan. Your family can receive the sum insured as emergency death protection in the event of unanticipated occurrences.
- Child insurance policies provide a host of tax advantages when compared to student loans.
- Above all, education insurance policies allow you to avoid having to repay your debts. You can also take a portion of your money out now and put the rest into an investment account to spend later.
So, if you're a new parent searching for a mutually advantageous plan that allows you to save and reinvest so that your child benefits later, this is the plan for you. Consider getting your child an education plan. If you have enough money and no plans to raise it, you can take out an education loan; 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 or ULIP plan is a great way to both protect and invest. You also provide financial security for your child, allowing you to meet their basic necessities, such as education, treatment, and other small expenses. You should be proud of yourself for covering the costs of your child's education and other essentials on your own. It's up to you whether or not you enjoy it.
Also read - How To Fund Higher Education For Your Child With An Insurance Plan?
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.