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What are Child Education Insurance Plans?
Child Education Insurance Plans are insurance plans that take care of your Protection and Savings needs for securing the future of your children. As a parent, one of your most important goals would be to make sure that your children have a bright future and lead their lives comfortably. These plans can help you achieve this by saving for your children’s higher education at a prestigious university.
Features of a Child Plan
Why do you need a Child Education Plan?
- A child education plan is an insurance policy that offers protection as well as an opportunity for saving money to ensure a secure future for your child.
- It makes sure that your child receives the education he/she desires with a lump-sum payout at maturity or when any unfortunate event occurs to you.
- It acts as a safety net to make sure that your child’s education does not get affected even if you are not around. In case of an unfortunate event, your child receives the life cover.
A Child Education Plan is an insurance plan that helps you protect your savings and safeguard your child’s future. The plan provides you with options to invest your savings and then use them for your child’s education, in parts or in one single withdrawal.
As a parent, you want to fulfill your children’s dreams and save money for their education, marriage. Child insurance plans not only help you build a corpus towards these goals but also protect children’s future in your absence. Therefore they are a good solution for someone who wants to work towards these goals and minimize risk at the same time.
Some of the other benefits of a child plan are:
- Use as a collateral – If you plan to avail an education loan for your child in the future, then you can use the child insurance plan as collateral.
- Partial withdrawal – If the child is hospitalized due to a medical condition or accident, these plans allow you to withdraw a lump sum amount from the yet-to-mature policy. This pay-out will act as an add-on to your health insurance plan.
- Tax benefit – As per the existing tax laws premiums paid towards child plans are exempted under section 80C of the Income Tax Act. Maturity benefits are also exempt from tax as per section 10(10D) of the Act.
With the ever-rising cost of education and all the activities, inputs that are required for a good upbringing of your child, you need to be smart about your financial planning. Child plans offer a disciplined and secure method of saving to safeguard your child’s future. Starting early on this journey will help you build a significant corpus for meeting the future expenses of your child’s education.