help create a corpus for crucial stages in the child’s life
Every parent wants the best for their children and their future. Spurting fees in reputable education institutes in India and overseas along with rising inflation means that parents today are more worried about their child’s education than ever before. Irrespective of their financial earnings, parents are today making use of child education plans to ensure they have an adequate financial corpus for the future education needs of their child.
A child education plan is a dual purpose financial instrument offering both protection and investment return. For the protection component on offer, such plans are also commonly known as child insurance plans. Child insurance plans are offered by almost every life insurance company, allowing parents the option to secure the financial future of their children.
Child insurance plans are available both as market-linked ULIP plans and traditional endowment plans. A child insurance plan works like a life insurance plan although some plans terminate when the child attains either 18 years or 21 years of age depending on the plan and the insurer.
Parents often wonder which child education plans suits the future needs of their children the best. While both child education plan types have their benefits, plans must be selected as per the risk profile of the parents. For example, low risk profile parents are better off opting for traditional endowment plans offering more secured returns compared to highly financially secure parents who can consider investment in ULIPs provided they are capable of managing the plans well.
Insurance experts across the spectrum recommend parents to check the various illustrations offered by each child education plan before choosing the most appropriate plan for their needs. For example, a majority of illustrations given by child insurance plans suggest 4% or 8% return assumptions. For a best case scenario, the sooner you start investing in a child education’s plans, the better the chances for it to attain a substantial corpus for your child's education needs in the future.