Every parent wants the best education for their children to assure a thriving and secure future. With such rapid changes, it's not just formal education but skill and technical education that are also required to survive in the real world.
As per the data for the years 2021 to 2022 education has increased by 10%. Affording education is becoming costlier, so it's important to be prepared with the finance required for children's education. It also neutralizes the pressure of higher education cost from parents and let them not burden their children in the future.
Plenty of education insurance available for parents makes it hard to decide on the right plan. Let's understand the factors that matter the most in buying an education insurance plan.
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Withdrawal plan- Knowing the withdrawal plan of your education insurance plan is important. Consider the scenario where you might need funds before the maturity date, and the partial withdrawal clause may rescue you in such situations. It's easy to manage the educational cost when the plan offers flexibility in money withdrawal intervals.
Expenses to cover- It is important to understand and calculate the education expenses in advance and know the sum of funds you need at the time of higher education. Discuss with your children about the kind of degree they want to pursue, their preferred college, and other potential expenses. Consider the education inflation, living cost, and current cost of the preferred degree.
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The age factor- It is crucial to decide the tenure for the education plan, the earlier the better but it's never too late to start. The maturity of your plan should be according to the age of your children and calculated accordingly. It is suggested to keep the tenure at least 10 years, short-term education plans require a higher premium, and you might face a cash crunch before the maturity date in such cases.
Getting the right education plan is not just important to arrange the funds for children's education. Also, look at it from the investment perspective and grow your money. Education insurance helps children to be burden-free and parents relax from financial stress. So choose your education plan carefully and smartly.
Anushka Trivedi is a freelance financial content writer. She can be reached at anushkatrivedi.com