How Can I Fund My Child’s Higher Education With Child Insurance Plans

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How Can I Fund My Child's Higher Education With Child Insurance Plans

How Can I Fund My Child’s Higher Education With Child Life Insurance Plans

“It only takes two to bring them to life, but it takes an entire village to raise one,” says a Japanese saying regarding raising children. The work required to prepare children to stand in the world is summed up in this adage. Because education is such an important part of your children’s growth, you naturally want the best for them.

The growing expense of schooling in India, however, has made this ideal harder to realize. This is why: The cost of a management degree from IIM-Ahmedabad, which is currently Rs 21 lakhs, is expected to rise to Rs 95 lakhs by 2025. (Due to rising education inflation). In the same way, an engineering education that costs Rs 8-10 lakhs now would most likely cost Rs 17-20 lakhs in eight years.

As a result, parents are struggling to pay for their children’s education, whether it be elementary, secondary, or further education.

What is the solution?

You’ll need a solid strategy to pay for your child’s higher education that can withstand growing inflation. Furthermore, acquiring a superb ULIP child plan in India that provides enough investment and insurance features in a single-vehicle is a wonderful approach to accomplish so. Here’s how it can assist your youngster to achieve his or her further education or other objectives:

  1. Maturity Benefit: To cover your child’s college expenses

Whatever job path your child chooses, whether it’s a well-known one (architect, lawyer, doctor, or engineer) or a unique one (data scientist, marine biologist, artificial intelligence, and so on), an acceptable ULIP child plan in India will assist in covering the costs of school. All you have to do is begin investing in such a plan at a young age and allow your portfolio to develop and amass a sizable sum by the time you reach retirement age. This sum will not only cover your child’s higher education expenses but it may also be utilized to help your child achieve other aspirations, such as marriage or starting a company.

  1. Support for your child’s education fees in the event your absence

In the event of your demise, the insurance company usually pays a specific portion of the money assured right once, and then yearly payouts are made every year until the policy expires. These payments assist in paying your child’s school expenses while you are away.

  1. Partial Withdrawals Are Available: This Aids in the Development of Your Child’s Talent

Child plans aren’t simply for higher education costs. These plans also allow for partial withdrawals to accommodate your child’s talents. If your child has a special gift (for example, playing an instrument or singing) or requires money to improve his abilities (for example, learning a new programming language), you can help him develop it by taking partial withdrawals from his child insurance plan.

Additional characteristics of a child insurance coverage include:

Life Cover: Depending on your financial capabilities and needs, you may select the life cover that comes with the insurance protection element of the child plan.

Waiver of Premium: The policyholder’s nominee receives a lump-sum payment upon the policyholder’s death, but the policy continues. Future premiums are waived, and the insurers continue to invest the money on behalf of the policyholder.

Tax Benefits: Not only do child insurance plans provide returns and protection, but they also provide tax benefits under sections 80C (life insurance) and 80D (disability insurance) (critical illness riders).

Investing in a child insurance plan that is tailored to your risk profile:

You may invest in a wide selection of investment possibilities with child insurance plans. These funds may be divided into three categories: low-risk, medium-risk, and high-risk.

  1. Are you looking for a fast-paced expansion?

If you’re looking for a long-term investment that will provide you with aggressive returns, investing in equities is a great way to do so. While debt is safe, equity is a better investment when it comes to combat rising inflation.

  1. Want to take a moderate risk?

If you’re willing to accept some risk while still seeking stability and balance in your portfolio, investing in both stock and debt is the way to go (balanced funds). Debt funds, on the other hand, maybe the best option to begin with if you are a cautious investor.

The Good News: You Can Change Your Opinions

Due to market changes, ULIPs offer a choice of alternatives for managing your returns. One tool that allows you to adjust your returns is the fund switching option.

For example, if you anticipate a stock market slump, you can shift a part of your portfolio to debt/liquid funds. Once the market recovers, you may switch back to equities and profit from the rebound.

Similarly, when you approach a major life event (such as your child’s schooling or marriage), or as your ULIP policy approaches maturity, you can shift a maximum share of your investment to debt/liquid funds (at the appropriate time). It will ensure that a major portion of your money is safe and that you will receive high returns when it matures.

It is critical that you do the fund switching exercise depending on your risk profile, financial objectives, and market volatility.

Conclusion

Nothing can replace your physical presence, but thanks to the child life insurance plan, your child may continue his studies even if you are no longer alive or lose your work due to permanent incapacity. So, get a fantastic ULIP child plan in India to ensure that your child obtains an uninterrupted education regardless of your presence or absence.

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