Your child’s higher education is a huge priority, and it is the same for every parent. However, simply prioritising it will not help; you have to take strategic steps in advance to ensure that the costs of the same are diligently met without any lapses on your part. How is this possible? You have to select the best possible education plan for your child at the earliest. Here is a guide that will help you make the right decision.
Key Aspects Worth Noting While Choosing Education Plans
When selecting an education plan for your child, here are a few key aspects that you should definitely note:
- Your child’s future educational goals should be clearly understood or at least estimated. This will help you calculate the costs of meeting these needs, keeping inflation at the forefront.
- You should always compare multiple plans based on their key features, premium amounts, and overall benefits. This will help you choose the right one that is tailored to your needs.
- Most child education plans are investment solutions that are tailored to offer funding for your kid’s educational journey down the line. You can invest in these plans for the long haul.
- Periodic/regular premiums have to be paid (monthly, yearly, half-yearly, or quarterly), and a lump sum amount will be disbursed by the insurance company at the time of maturity. It may be paid when your child reaches a particular age. Some plans also offer payouts periodically at various stages of life or education. You should check for these options before investing.
- Child ULIPs or unit-linked insurance plans offer a lump sum amount at maturity along with life coverage for the policyholders throughout the policy duration. These policies deploy investments in debt and equity instruments with payouts usually starting when the child turns 18 years of age.
- Child endowment plans also offer life insurance coverage along with guaranteed returns, which are lower in comparison to several other investments. In usual cases, there are a fixed number of payouts along with other bonuses (if applicable) after the child reaches the age of 18. The risk quotient is lower for these plans due to the guaranteed returns, although you will have to contend with slightly lower returns,
- Money-back insurance plans are quite similar to endowments, although they offer returns regularly at intervals. They are usually given as a percentage of the sum assured at gaps of 5-10 years. These plans combine endowments with money-back policies to cover the educational costs of your child. You thus get returns and the final maturity amount upon the conclusion of the policy.
So, you should make your choice depending on which plan suits your needs in the best possible manner. Keep all these aspects in mind while making your choice and always keep the policy charges and lock-in periods in mind. Use online calculators to estimate your returns and stay invested for long-term benefits.
