Finance

Plan Your Child’s Future Smartly. Here’s How

Plan Your Child's Future Smartly! Here's How
Written by Medhaavi Mishra

Plan Your Child’s Future Smartly! Here’s How!

Inflation is a broad term used to describe the rise in the price level of goods and services. Inflation is a gradual, continuous rise of the general price level of goods and services, which also means a decrease in purchasing power. Inflation has many consequences affecting everyone.

The education sector in India is also not an exemption from inflation’s consequences. Nowadays, it costs a fortune to get your child admitted to a reputed university, and often requires children to take student loans to fund their education, unless parents have enrolled in a child plan.

This leads them to the never-ending debt trap and they’re buried by a significant monetary debt as soon as they begin their work life. However, if you start planning for your child’s education early with a child plan, you can easily evade these problems.

You can consider investing your capital in a child plan and accumulate funds over some time. This accumulated corpus can be used for your child’s education in the future. Moreover, these investments are subjected to a very low risk, which makes them ideal for the middle-class population of India.

How Investing in A Child Plan Can Help You?

  1. Protection in Unforeseen Circumstances

The biggest benefit is that it offers financial security for children. If you die, they inherit the full insurance amount. Moreover, a child plan will still fund your child’s education even when you’re not around as the maturity amount is usually ten times higher than the premiums paid.

  1. Fulfilling Your Child’s Dreams

As stated above, the rise of inflation has already led to a significant increase in the costs of education. With that said, if your child wants to study abroad or pursue a specific career, you may require a significant amount of money to fund their dreams and aspirations.

However, by investing in a child saving plan, you can accumulate a financial corpus that can be used to fulfil the dreams of your child. This will also allow you to eliminate the need of taking education loans or financial help from anyone.

  1. Enjoy Tax Benefits

As per the regulations of the Income Tax Act of India, the investments made in a child plan allow you to enjoy tax benefits. According to section 80C of the act, the premiums paid towards the policy are eligible for tax deductions for up to Rs. 1.5 Lakhs. Moreover, the maturity proceeds associated with the policy are also exempted from taxes as per section 10(10D) of the act.

Best Child Plans Available in India 

  1. Aegon Life Rising Star Insurance Plan

The Aegon Life Rising Star insurance plan is an ideal policy to accumulate money for your child’s dreams and aspirations. The plan allows you to invest your capital in a variety of funds including debt, stability accelerator, security, and so on. Additionally, you can also pay your premiums in ranging terms like monthly, quarterly, half-yearly, and yearly based on your requirements, which also makes it a highly customizable child plan in India. The plan also offers financial provisions for a specific period.

  1. Canara HSBC Oriental Bank Of Commerce – Smart Junior Plan

The Smart Junior plan offered by Canara HSBC Oriental Bank Of Commerce is a non-linked savings and protection plan that helps you fulfil your child’s educational requirements by allowing you to make consistent savings. The plan also protects your child in the event of unfortunate demise. With this plan, you can also enjoy guaranteed payouts in the last five years of your policy tenure. There are even several annual bonuses that help you increase the scope of your investment and accumulate a large corpus of monetary resources to envision your child’s dreams.

  1. Aditya Birla Sun Life Vision Star Plan

The Aditya Birla Sun Life Vision Star Plan is a traditional money-back policy that provides periodic payouts throughout the tenure of your policy. The minimum age to invest in this plan is only eighteen years and you can stay invested for as long as 75 years. The plan offers two major benefits namely survival benefits and periodic benefits. There’s even great liquidity in this plan that allows you to claim payouts every two years, which you can enjoy after completing the lock-in period.

  1. Bajaj Allianz Young Assurance

Among the various child plans provided by Bajaj Allianz, the Young Assurance is a traditional policy that features an inbuilt benefit for accidental permanent total disability. It has a minimum entry age of 18 years and you can stay invested for as long as 50 years. The assured sum in this plan is 10 times the premiums you’ve paid yearly. You can choose from multiple policy terms including 10, 15, and 20 years as per your requirement. Additionally, you can also enjoy great flexibility by choosing from multiple premium payment options including options like half-yearly, yearly, monthly, and quarterly.

  1. ICICI Pru Smartkid Regular Premium

The Smart Kid’s Regular Premium plan is a participating endowment plan that provides guaranteed educational benefits. In the event of the unfortunate death of the parent, the child can receive a lump sum payment of the assured sum as well as the future premiums. Moreover, the plan also provides inbuilt protection against disability and accidents. Furthermore, you can also extend the coverage of your policy through additional riders available with the plan. In case you have an immediate need for the funds, you may also opt-in for the partial withdrawal functionality of the plan that allocates you 120-170% of your annual premiums.

Bottom Line

With the rising cost of education in the country, it’s becoming even harder to ensure proper education for your child without having to rely on student loans. However, with proper planning and investment in a child plan, you can make sure that you have the availability of required funds when your child needs it the most. Therefore, if you want to help your child achieve their dreams, make sure you start investing in a child plan as soon as possible. There are various child calculator options available online that help you compare various available plans.

About the author

Medhaavi Mishra