How to Choose The Best Child Education Plan?

Our children are the torch-bearers of the coming age, and their education is one of the most important aspects of their upbringing. Among the vast amount of insurance products that are available for proper financial planning, the one that focuses primarily on your children is the child education plan.A child education plan is a combination of insurance and investment. The premiums that you pay are invested and the maturity benefit can be availed once the policy term is over. This can be used for your child’s education and other expenses. The insurance aspect of a child plan provides a death benefit to the child in case the parent(s) pass away prematurely.

One look at the insurance market and you can be overwhelmed by the variety of child education plans that are available to choose from. They all have their own perks, their own features and their own added benefits. But worry not, we’ve listed out a few tips to keep in mind when choosing the best child education plan . Let us take a look:

1. Look For A Plan With Premium Waiver Benefits Always get a child education plan that has a premium waiver feature, either built in the policy or as an added benefit. A premium waiver feature lets the insurer waive off the remaining policy premiums in case the parent(s) pass away. The child will get the promised death benefit, won’t have to pay further premiums, and once the maturity date is reached is also eligible to get the maturity benefit. The remaining premiums are paid by the insurer themselves.
2. Go For Equity-Linked Plans If You Have The Risk Appetite Child plans come in two forms, the first of which is a unit linked insurance plan. Such a plan allows a part of your premium to be invested in financial securities, like debt funds and equity. Over the long run, equities are known to offer better returns but they’re also risky. So, if you can take a bit of risk when it comes to your investment, an equity-linked child plan is the way to go.
3. Go For Endowment Plans If Your Risk Appetite Is Low The second form of a child education plan is the endowment plan. If you’re more concerned about the stability of your investment and are averse to market uncertainties, then you’re better off with a child endowment policy.

Keeping the above tips in mind, you can go ahead and choose the best child education policy that best suits your and your children’s needs. A child education plan is one of the best ways to secure your child’s future and protect it from unfortunate events. So, take the required action today so that your child makes the most of it tomorrow.

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.