What's the need for a child’s investment plan?

Every parent has a dream to send their kids for better school and colleges to gain the extraordinary education which will boost the child's creativity, stamina, skills, knowledge, intelligence and many other hidden skills so that the child becomes gentlemen or gentlewomen in future and achieve all the heights in their career.

But, the biggest problem everyone is facing the high fees structures of the schools and colleges and this inflation time is also hitting hard to many parents which resulted in sending their kids to a low-grade college or to stopping their education. In such a case, investing in a child plan can help those parents to plan a better future for their kids.

If you are searching for a tool which can help you financially to create the child’s future extraordinary, then the best option is to invest in the child plan.

Many times, the majority of the parents face many concerns regarding their child future. From the birth of the child only, this tension kept hitting them hard and generate several questions which they ask themselves:

1)     How to plan a child’s future without tensions?

2)   Is there any way to secure the child’s future without heavy investment?

3)   My child’s dreams are really high… Will I be able to fulfill their dreams?

These are the worst nightmares which cause no sleep and create tons of tensions in the parent's life. So,

·        How can you plan your child’s career?

·        What would you like your child to be in the future?

Maybe,

Doctor, Engineer, Photographer, Entrepreneur, Painter, Writer, Designer, Sports Person, Astronaut, Racing Driver etc. or totally different from these professions. Or you would want to leave this decision on your child to decide what he would like to become when he grows up. You just want to stand next to him/her to support in all the decisions.

But just standing is not enough, you also need to have enough fund to help and support your child and to make their dreams come true. And, this the true fact that education these days are so expensive that most of the middle or small class parents are not able to afford. The increase in the educational fees every year is easily digging a hole in the pockets.

If we look at the current scenario, a professional course like MBA which is one of the most common and popular courses of current times cost around a minimum of 10 to 15 lakhs approximately. Now Imagine the fee structure after 10 years down the line when your child will actually looking forward to getting the admission for the courses like MBA. The approximate cost will be around 20 to 25 lakhs. And, if your child set his vision to get the degree from some abroad university, then just double the amount. So, are you ready for such a huge amount in the future?

How will you tackle the situation?

The simplest answer to this hard question is the CHILD PLAN.

Now, let us have a look at how a child plan can help in creating a better and bright future of your child. But, before we move ahead, let’s get into the basics.

What is a Child plan?

A child plan is the same like as a general life insurance plan which gives an opportunity to invest to create a bright future of your child. It is a kind of financial tool under which you can accommodate a specific amount of money (as per the plan) for your child’s better education.

One of the best advantages of a child plan is, it does not only support in the monetary matter at several stages of your child but also continues if the life assured passes away, which means, whether the assured is alive or not, the child’s future is safe, it does not perturb the child plan.

Benefits of a child plan

Out of many advantages of a child’s plan, let us have a look at the most crucial one:

1)     It secures the child’s future.

2)   It provides an opportunity to plan and to achieve the child’s dream.

3)   Tax benefits. Premiums made are tax exempted.

4)   A feel of relaxation. As the step is already been taken which ensures a bright future of your child even if something happens to you.

 

Eligibility to purchase a child plan

Eligibility here means an entry age of the child to buy a child plan. And, the entry age varies from insurer to insurer as per their respective plans. However, the most common age to buy the child plan is age 18 or 21 and the maturity age can be up to the age of 60 to 65 years.

Now, the assured some also depend upon the plan to plan. Some of the plans offer no minimum amount feature and on the other hand, some have the criteria of around 5 to 10 times of the premium amount annually, which means, if the premium annually is Rs. 10,000/- then the assured sum could be approx. Rs. 1,00,000/-.

How does a child plan word

To avoid the sleepless nights and to skip the worries about the fees and payments of your child’s higher studies, one should be aware of how a child plan works? Let us see with the help of an example:

Suppose, you have a 5-year-old kid and you invest in a child plan which has an assured sum of Rs. 20 Lakhs and the policy term is for 20 years.

Policy Term	Sum Assured	Cases
10 Years	20 Lakhs	Case 1: If the policyholder dies in the fifth year of the policy tenure: The insurance company will give the death benefit to the policyholder. The insurance company will pay the premium for the next 5 years. The insurance company pays the maturity benefits at the end of the policy and then the policy will terminate.
		Case 2: If the policyholder outlives the policy tenure of 10 years: The insurance company will pay the maturity benefits and the policy will be terminated.