What is the importance of Child Education Plan?
Posted by animesh on April 18th, 2017
Parents always think about making their child’s future financially secure. The rising costs of education have always got the parents got worrisome about the costs of education. The Child Education Plan is the investment cum insurance plan that serves for two purposes. It helps you in securing you’re the child’s future financially and provides finance adequate funds for the important turning points in the child’s life plan. So the child plans act like double edged swords which provide protection cover to the family in case of untimely death of the parent also help in building corpus with the period of time which can be used during the major events in the child’s life.
Child Education Plan helps you in meeting both long term and short term goals. Here are the advantages of a child plan.
Provides corpus for child’s education:
With minimal payment of the premium, Child Education Plans give you more returns than the child education plan. This lump sum amount can be spent for the child’s education. The amount available will depend on the term and conditions of the child plan and on the amount he has invested in the premiums.
Medical aid through the Child Education Plan:
They Child Education Plans also have the facility of withdrawing money during the times of adversity. This money can be used for the treatment of the child when if he or she falls ill and take care of . Such partial withdrawals provide financial aid during the time of ailments. The best child plan will help you reduce the financial burden caused by the medical expenses. And acts as a health insurance plan.
Supports the child financially in absence of the parents:
A Child Education Plan offers a lump-sum payment on the death of the policyholder during the policy tenure, but the policy does not end. All future premiums are waived and borne by the insurance company. The policy is continued and the child also gets money at specified intervals as planned under the policy. Death is uncertain and financial crunch during this period can lead to problems. The insurance companies offer a waiver of premium if the parent passes away during the term of the child plan. This waiver will build the child plan. The premiums will be paid by the insurance company. The child receives a lump sum amount which is promised at the purchase of the policy and the child does not need to pay the balance premium. The feature of riders helps you continue the policy without any breaks and pass the financial burden of the remaining premium to be paid off to the insurer.
Income protection to the child:
A Child Education Plan provides the advantage of capital appreciation in the long run to the child.
Acts as collateral for higher education loans:
Higher education has become expensive lately, whether the child goes for education in the homeland or a foreign country. Child Education Plan come in handy if one intends to go take a loan for higher education they can be used as collaterals. They can be used collateral for another child related borrowings. A child insurance policy is a great policy and best investment plan for the child. This child plans also instills discipline helps you attain the importance of saving for securing your child’s future.One can avail education loan against the Child Education Plan.
There are various Child Education Plans in the market by different life insurance firms. Some of these are market-linked policies, which allow policyholders to invest in equity and debt funds, while others are traditional plans, which invest only in debt. In case of a life insurance policy, the premium paid for a child plan is eligible for tax deduction under Section 80C, while any income from the plan is tax-free under Section 10 (10D) of the Income Tax Act, 1961
Child plans vary as on depending what the person has selected at the beginning of the plan. The lump sum amount received is at least 10 times than that of the premium paid during the policy period.
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About the Authoranimesh
Joined: March 22nd, 2017
Articles Posted: 32
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