Uncertainties are an inevitable part of our lives, but managing it efficiently by pre-plan your child’s life could provide a shield against such uncertainties. It totally depends on how you predict your adverse circumstances and be prepared for that.
Education is the most important and expensive part of your child’s future, and as parents, you will never want your child to compromise on your dreams just because of lack of finances. Child insurance or a child education plan can make it easy for you. It acts as a protection, saving and investment plan for your child.
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What is a child education plan?
It is a systematic saving plan in which you need to invest a particular amount of money according to your expected financial requirements and education inflation rate prevailing in the country. It is a saving plan by you, as parents, to ensure your child’s future even in your absence.
Why is a child education plan important?
Your child’s education is important, and to fulfil their dreams finance to fund their education is much more important. This children’s day, let your child develop wings to fly and ensure that lack of financial resources couldn’t become a roadblock in your child’s dreams.
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Increasing cost of education
The education inflation is increasing at the second highest rate followed by healthcare expenses inflation. As parents, you need to ensure that your child’s education should not be compromised due to any unfortunate reason. Insuring your child’s education is a way you can beat inflation and keep a corpus of money for your child’s dream college.
Uncertainties can knock your door anytime
As we have already mentioned, the demise of any parents could be the most possible unfortunate mishap that can happen to a child. Your child would require financial assistance along with emotional assistance.
There are a few education policies that provide you with a premium waiver benefit. If any of the parents dies during the policy, children do not have to pay further premiums.
Keep your child debt free
If you haven’t saved or invested anywhere in the name of your child’s education, your child is left with only one option, an education loan. A loan before even starting earning would lead your child to debt stress and he/she might not be able to pursue efficiently what they want to. What if they want to study further? They couldn’t because they wanted to repay the debt.
An education insurance policy helps your child be debt free and do whatever they want to pursue in their careers.
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An education investment plan or we can say protection plan would not only help your child in achieving their dreams but also help you in saving tax. You can get a benefit of claiming deductions under section 80C of income tax.
For aiming a financially stable life for yourselves and your family, it becomes essential to follow a basic rule of finance which is discipline. Paying insurance premium regularly otherwise you have to pay the fine for late payment makes you follow a strict financial discipline which helps your child in the long term.
Child education plan is an important piece of equipment that gives support to your child’s future which helps them be financially independent enough to plan their future without thinking about money. Always keep an education plan in your mind while shaping your child’s future.
Anushka Trivedi is a freelance financial content writer. She can be reached at anushkatrivedi.com