But with so many insurers offering such plans, parents often struggle to decide. Here are some factors one should look out for when comparing child education plans-
- Entry and Maturity Age: The entry and maturity age significantly vary between education plans. The entry age can range from 30 days to 8 years. Go with a plan that most suits your requirement. Similarly, try to understand the age when your child would need your financial assistance the most. As you are purchasing an education plan, select one that matures when your child is 15-25 years old.
- Maturity Benefits: You should also focus on the maturity benefits while making child education plan comparison. While many plans offer a lump sum payment on maturity, some plans divide the maturity amount in smaller instalments. These small instalments are then paid to your child at different stages of his/her life.
- Type of Plan: The plans that offer a lump sum maturity amount or divide the amount in instalments are known as endowment plans. There are also Unit-Linked Insurance Plans (ULIPs) available. These are market-linked plans where the maturity amount depends on market growth. If you are investing in a plan for more than 10 years and have a risk appetite, you can consider ULIPs too.
- Death Benefits: Child education plans also come with death benefits. In case if the policyholder (parent) dies during the policy tenure, the beneficiary (child) is entitled to receive death benefits. The benefits can vary between plans. Make sure that the plan you select comes with the premium waiver benefit. This will ensure that in case of the unfortunate event, there will be no need for paying any premiums for continuing the policy.
- Partial Withdrawal or Loans: Some of the child education plans also allow you to withdraw the accumulated amount partially even before maturity. But there is generally a lock-in period after which such withdrawals are allowed. Similarly, some plans allow you to take a loan against the maturity amount. This is an excellent benefit to have in a child education policy.
Education will play a vital role in helping your child build a successful future. Prepare for it in advance by purchasing a child education plan. Do keep the points mentioned above in mind when comparing to offer the best to your child.
Learn more about our online life insurance plans.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
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