Few things in life can compare to the joy you feel when you become a parent. The happiness and safety of your kid becomes the topmost priority in your life. That means planning for their future so that they don’t have to worry about anything.
Financial instruments, like a child education plan, are designed explicitly for this purpose. It is essentially a combination of investment and insurance benefits. With a child plan, you can secure your child’s future systematically to support their dreams and goals in life.
With a suitable child plan, you can create an efficient safety net for them. It will allow them the freedom to explore career opportunities without making any compromises due to financial difficulties. When they are old enough for higher studies, a child education plan can be the much-needed support system to fuel their career.
Let’s understand why a child education plan is a necessary addition in your investment portfolio:
Increasing Education Expenses
When you plan to start a family, the most significant concern is the financial impact of it. As young parents, it can be difficult to manage the expenses that go into supporting a family. It is crucial to be well-informed on the cost of education in the country to purchase an adequate child education plan.
With time, the cost of education is only going to increase. Currently, India has one of the highest numbers of school-going students, which is over 250 million. Besides, the country also has one of the most extensive networks of higher education institutions in the world.
As more technological advancements and innovations are introduced in the education sector and the competition increases, the cost will rise along with it. Moreover, when your child is preparing to go to college, you want them to have the required funding, which can be possible with a child education plan.
Advantage of Early Investment
Investing for your child’s future can be more fruitful if you do it early in life. Some child plans also allow regular investments in small amounts to ease the financial burden by spreading it over a more extended period. In a few years, the child education plan will have accumulated significant funds that can reduce the pressure of providing for their education.
Moreover, the child education plan allows you to categorize your investments in life. By keeping your child’s needs covered under a standalone child plan, you can remain assured that their future will not be in jeopardy, under any circumstances.
You can begin investing in a child education plan, as soon as your child is born to ensure you provide them a head start for the future requirements. This way, you have sufficient time to readjust and plan other investments accordingly to strengthen the financial safety net for them.
Additional Burden of Loans
Considering the expense of education, it is a fairly common practice in India for parents to take education loans to support their child’s education. For instance, if your child has a dream of studying abroad, most parents resort to the help of a loan at short notice.
If you plan for such things beforehand with a child education plan, you can avoid additional load on your income in the future. The pressure of paying off an outstanding loan can only add to your troubles. A child plan enables you to save and manage your finances competently.
Since there will be other significant expenses in life, such as buying a house or a car, a child plan can take care of your child’s needs, while you use your income for other purposes.
Investing in a child education plan does not come without its benefits. Apart from future benefits for your child, you can avail tax deductions on this investment.
Under Section 80C of the Income Tax Act, 1961, the premiums payable towards investment in a child education plan is eligible for a tax deduction. Furthermore, the maturity proceeds from a child plan are also tax-exempted under Section 10(10D).
Protect the Child’s Future
It is prudent to say that every parent wishes their child remains healthy, happy and protected all through their life. This includes making opportunities accessible to them so that they can explore their potential. A child education plan lets you fulfil that responsibility without facing financial difficulties.
Generally, a child education plan includes the benefits of insurance and investment. It makes their financial safety net even more strong, as it protects them against the uncertainties of life. You can choose from the different types of life insurance policy and investment tools that make a suitable child plan, tailored to your requirements.
Adding to that, a child education plan also comes with various riders that can be attached to it. Some riders that are commonly available with a child plan are accidental death and disability rider. Depending on your preferences, you can put together a comprehensive child education plan together. Secure your child’s future, and enjoy tax benefits at the same time!