Benefits of a Child Plan to Secure Your Child’s Future
Starting with one of the most basic education-related costs for your child. In India, it is expensive to get a good education for your child. No matter where you are located/situated in the country, every parent wants to get their child in the best schools possible to make sure their children can get the best education. It is understood that in India, the educational institute makes a considerable difference in the quality of education that is delivered, so no parent wants to compromise in this matter.
A good school comes with generally high fees because of the better infrastructure and features that they provide for the kids. The cost of education is already quite high; it is expected to only go higher in the coming years. A child plan can help you save up for it and pay the fees when it is required. Child plans usually come with a money-back feature which you can use to get regular payouts from your policy. You can use the regular payouts to pay the school fees for your child and help them get the best education possible.
Support Higher Education
When your child completes their schooling and is ready for their higher education, that is when you would ideally want your child plan to complete its term and mature. This will give you the endowment benefits of the plan with the lump sum payment of the sum assured of your policy along with the bonuses (if any) your plan has acquired from the insurer throughout the policy.
The lump-sum payment that you acquire during this time can be used for the college admissions for your child. It is often the case that children pursuing higher education need to move to a new city or even country in order to continue their studies. Investing in a good child plan will allow you to give your child the opportunity to pursue their dream education from the institution of their choice.
The best part is that if you can save any amount of money in this part, you can reinvest and save that money again to use it for future expenses again. With kids, you never know the kind of expenses that you will have to cover, so it is always better for you to stay prepared and have more1 than what you would need at your disposal at all times.
Beating Lifestyle & Education Cost Inflation
If your child needs to move abroad or even to a different city for their education, it is necessary for you to remember that inflation is a real thing. What you can expect the cost of living in a foreign place is today, it is going to be high depending on the place, course, institute etc. chosen, so how do you prepare?
Well, for starters, you need to get a sum assured that beats the rate of inflation in India. The rule of thumb is to invest in a way where the sum assured of your child plan is at least ten times your current annual salary. This way, you can save up and be ready for your child’s education expenditure come what may. This process will help you save up more than you might require, which you can then repurpose for other future expenses.
Support Your Child’s Interests/Dreams
Apart from the educational goals, you as a parent would surely want to fulfil the goals of your child to pursue their dreams and interests to the best of your abilities. The amount of money that you might have saved at the time of college admissions and higher education studies can be used to help you support your child fulfil their interests, be it starting their own business or learning a new skill that requires them to get some new equipment.
It is hard to predict where your child ends up after completing their education; it is quite common for children to pursue a course of career that is absolutely unrelated to their education because they found passion in that field. You, as a parent, should be supportive of your child and their choices to help them unlock their true full potential and be the best they can be of whatever they want to be.
Investing healthily in the child plan can help you gather a corpus large enough that you can support your child in these situations as well. It is not the fault of the child to not be sure of what they want to be at the age of 18 when children start higher education, so being gentle with them and supporting their dreams is the right thing to do in the process. Knowing that their parents support them will help them give their 110% at their work to make sure they succeed in their ventures.
Carry Out Wedding Expenses
Weddings are a kind of like the last big expense that parents incur for their children. Nowadays, most children understand the burden of wedding expenses and plan for their own wedding expenses or at least help their parents by contributing some part of their own earnings to their wedding costs. Regardless of what the arrangement is like, parents would always want to pay for and arrange for the wedding of their children.
You can save up for the wedding expenses of your child with the leftover money that you would have from the corpus that you had invested in the child plan. The sum of money you have at this time may be a bit short given all the expenditures you have already undertaken. So, it is crucial that when your children complete their higher education, you invest the remaining money in a short-term investment plan to make sure you have your desired amount for the wedding fund of your child.
This is just an idea that may not be necessary for you if your situation is different, but for people that feel that their fund is running low, this is the best way for you to rejuvenate your corpus and create the dream wedding for your children to the best of your abilities.
Secure Your Child’s Future in Case You’re Not Around
Life is uncertain; you don’t get to say which day might be your last. Every sentence that you read so far brings the utmost joy in your heart, but there is no certainty that you will be there to witness all of these milestone events in your child’s life. As grim as that may be, you would not want your child to not have these moments simply because you are not around. A child plan honours your wishes and allows you to give financial security to the life of your children to make sure they can have all these moments in their life regardless of your presence.
The life insurance feature of your child plan allows you to help your child receive the full maturity amount at the end of the policy term regardless of whether you are alive or not. The child plans also have benefits such as premium waiver features that waive off any unpaid premium after your death to ensure your family is free from any financial burden. Sometimes this feature also covers other situations as well, such as illness/injury of the policyholder.
The waive off does not reduce your sum assured, and you are guaranteed the sum at maturity. You can also opt for various additional riders that can give your family a death benefit, where your family receive an extra sum assured if you pass away during the term of the insurance. You can also purchase a hospitalisation and medical expense rider that helps you pay for your hospitalisation costs. These riders add considerable coverage over your existing policy and provide necessary financial benefits to your family for when you are not around anymore. However, please note that riders are not mandatory and available at an additional cost.