Support your child at each stage with these investment plans!

Are you looking for the perfect child education plan for your kid’s education?

Having a child is the greatest blessing in a parent’s life. On the one hand, it is the beginning of nurturing life; on the other, it is an entirely new learning experience. The parents’ commitment begins at birth, and they make every attempt to provide their child with the best of everything.

While the love and compassion of the parents are the greatest priority, we cannot deny the importance of finances in the child’s growing years. Clothing, toys, travel, education, admissions, and the list goes on are all investments and expenses in a child’s life.

What is a Child Plan?

A child education plan is a well-thought-out fusion of insurance and savings designed to ensure your child’s financial security. It creates an economic corpus that can be used for the child’s financial needs. A child education plan is typically purchased by a parent for a minor child and includes both death and maturity benefits.

The parent/parents have control over when and how the insurance company releases the maturity amount to the child. Another important consideration is that the policy remains in effect even if the parent dies before the maturity period and the child obtains the amount decided by the parent.

Different Types of Child Plans

Because of changing consumer needs, there have been several adjustments in the types of child education plans in recent years. Most insurance companies provide various policies to meet their customers’ needs. Child education plans can be classified into the following categories:

1. Traditional Child Insurance Plans

● Endowment Plans

Endowment plans give stable asset returns and pay lump-sum rewards upon plan maturity or early death.

● Money-back Plans

Money-back plans provide recurring payments at predetermined periods throughout the plan’s term, with the remaining sum assured paid at maturity.

2. Unit Linked Insurance Plans

Unit-linked Insurance Plan (ULIP) Child Policy is beneficial in the long term since it yields significant profits as the economy grows.

Benefits of Investing in Child Plans

Investment in the best child education plan is advantageous for the following reasons:

1. Future Security

Child education plans aid in establishing a fund for the child’s educational and other requirements. The premium waiver benefit assures that the insured receives lump-sum payments as intended, freeing him of any financial hardship. This gives the youngster a lot of security in the future.

2. Income Tax Benefits

All Child education plans benefit from tax breaks on premiums paid under Section 80C, and the money received at maturity is likewise tax-free under Section 10 (10D) of the Income Tax Act of 1961. These tax breaks enable parents to set up a tax-free endowment for their children while simultaneously saving money on their investments.

3. Flexibility to Switch

Unit-linked child education plans allow you to pick from various fund alternatives for investing, such as stock, debt, and so on. As a result, you may manage your assets according to your risk profile and investing plan to build a substantial corpus for your child.

4. Inbuilt Premium Waiver Benefit

The best child education plans have a significant advantage that waives current premiums if the parent dies during the plan’s term but guarantees payment benefits as specified in the policy. This premium waiver advantage gives the parent financial peace in knowing that their death will not interrupt financial plans for the child’s future.

5. Liquidity Benefits

The partial withdrawal feature of unit-linked child education plans assists in meeting any financial difficulties, hence providing liquidity. Endowment plans, too, permit policy loans, while money-back plans permit survivor benefits to offer liquidity to policyholders.

6. Additional Riders

To meet the coverage demands of parents, kid policies have a variety of add-on riders from which the policyholder can pick. This broadens the extent of coverage and the number of claims, resulting in improved insurance coverage.

Best Child Education Plans to Invest in 2022

The best present a parent can offer their child is to invest in the best child education plan. Several insurance firms provide various sorts of kid policies to meet your needs. Before investing in any of these programs, you should thoroughly research them to make the best decision. Some of the best child education plans and their specifics are included below.

1. Canara HSBC Life Insurance – Invest 4G Plan

Canara Invest 4G is a non-participating unit-linked life insurance policy that lets you forget about your financial problems. The policy provides both protection and savings, providing life insurance cover as well as the option to invest for your life objectives. Some of the distinctive characteristics that make insurance an excellent choice are the loyalty boost, wealth booster, and mortality return on maturity.

To invest your money, the plan provides 7 different funds and 4 portfolio techniques. It also allows you to reroute and swap fund alternatives to take advantage of market movement or decrease risk. Furthermore, the child education plan includes annual and final incentives, if any, upon maturity.

2. LIC New Children Money Back Plan

Are you looking for the best money-back policy for children? Then the LIC New Children Money Back plan can be the best option for you because it covers all your developing child’s demands, such as schooling, wedding, and so on. Some characteristics include,

This policy provides a maturity benefit equal to the sum guaranteed plus any applicable bonuses. This child education plan offers a survival reward to the insured beyond a specific age (equivalent to 20 per cent of the basic sum assured). A high premium amount is eligible for a LIC refund.

3. HDFC Life Youngstar Super Premium Plan

Are you looking for the best kid insurance? This is the greatest kid’s policy since it includes investing opportunities as well as insurance coverage. This unit-linked child education plan can be employed during many periods of your child’s life, such as further education, marriage, etc.

This child education plan can be tailored to your child’s specific needs. This plan is used to pay 100 per cent of future premiums in the event of the death of the life guaranteed. Half of the premiums are levied as yearly income if the parent dies during the term policy. The parents prefer the ‘Save-and-Gain’ payment.

Wrapping It Up

One of the greatest blessings is becoming a parent. However, protecting the child’s financial future becomes a benefit for the developing youngster.

Parents are responsible for alleviating financial hardships so that the child’s growth is not hampered. As a result, it is preferable to begin preparing early. Only then can a stable financial foundation be ensured for long-term financial health.

A child education plan is a great way to secure your child’s future. There are so many child plans available in India, but you must get the best child education plan for your kid.