Master Plan for Child Education in India, 2022
We only want the best for our children, always. The best clothes, the best food, and the best education. In order to achieve this dream, we work hard and strive to ensure that our children receive the best education possible to have a bright future. It makes sense then to think in the plan that the future of your child is protected forever. To help you do this, we will explain in detail about the education system for children so that you can be sure that you provide your child with a good education for a long time.
Child Education Investment Plan: What It Means and How It Works
As the name suggests, the plan to manage children’s education is aimed at encouraging you (the parent) to invest your money in a plan that works like an insurance policy. Just like insurance saves you in times of crisis, so does this plan, helping you keep your money safe and secure a bright future for your child.
When you invest in a child savings plan, you get money that you save for your child’s future, which can be used to pay for his or her education in parts or in full. Now let’s understand how these plans work.
Let’s say you buy a child’s education plan. You will also need to pay the premiums at the set time (the policy period). At the end of the said period, you will have the right to receive a certain amount (guaranteed) in the total amount from the insurance company. This amount is also called maturity benefit which you can use for your child’s education.
Also, it is important to understand here the possibility of unexpected or unforeseen events (such as the death of the owner) during the process of managing the children’s education. In this case, the insurance will transfer all of your life insurance to a nominee of the owner (preferably a spouse). In addition, any future payments that remain to be made during the policy will also be deducted from the insurance.
Advantages and Disadvantages of Children’s Education Plans
Let’s take a look at some of the benefits of future financial plans in India:
- Keep your child’s future worry-free – You may want a good education for your child but you may not know how to achieve that dream with limited resources. Good educational planning for children helps to bridge this gap.
- It makes paying for college possible – Sometimes paying for your child’s higher education, such as college or university, can seem difficult considering the high fees. With a children’s education plan, you have the right to receive maturity benefits at the end of the education period, which allows you to manage this money easily.
- Discrimination is possible to treat the child’s medical treatment – If your child gets sick and needs to be hospitalized or receive long-term treatment due to some other problem, you can withdraw a small amount from your child’s education fund and use it to pay these expenses.
- It allows you to include passengers to your advantage – The system can be extended by adding extras/riders to increase the amount, for example, an accident insurance rider.
- Income tax benefit to the owner – Children’s education scheme is eligible for tax benefits under the Income Tax Act, 1961.
Best Ways to Make Money for Children’s Education
Here are three top money management tips to consider to secure your child’s future education –
SBI Life Smart Champ Insurance
This plan is available for children between the ages of 0 and 13 and the maturity age of the plan is 42-70 years. Payments can be made annually, semi-annually, quarterly and monthly. The plan covers life insurance as well as accidental death and accidental total disability benefits for the duration of the policy.
LIC New Children’s Money Back Plan
The best one-time money plan for a child that allows you to successfully manage not only education money but also those involved in the child’s marriage. The policy provides a survivor benefit to the owner, meaning that in the event of his death, the money will be paid to the owner’s nominee who is responsible for raising the child.
HDFC Life Young Star Udaan
You can use three options to get the maturity benefit under this plan in addition to the premium-waiver center. The minimum eligible age for a child is one month and the maximum cover is 60 years.
You can find the best way to manage your child’s tuition online by using our online child tuition calculator. This is a simple tool that allows you to know exactly how much money you need for your child’s education and how much money you need to make.
Read more: 7 Best Ways to Make Money for College Students in India
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