How to Secure Your Child's Future with Child Education Plan?

You’ll be quite surprised to know about the recent hikes in the education fees of some of the premier institutes in India – be it Indian Institute of Management (IIM) or Indian Institute of Technology (IIT). The latest course fee structure released by IIM-Ahmedabad shows that it will cost Rs 19.5 lakhs for the 2-year management course in 2018, which is approximately 400% higher than what it used to be in the year 2007. Hence, if we calculate the fees considering this average hike of 20% every year, it will cost around 95 lakhs for this 2-year course in 2025 (which is indeed a huge amount). Similarly, the tuition fee for IIT has been increased to Rs 2 lakhs from the earlier fees of Rs 90,000 per year. At this rate, this fee can go up to as high as Rs 17 lakhs in the next 8 years.

Parents, who haven’t planned well in advance and hence, are not prepared for the huge costs associated with education, can fall worryingly short of the required amount when the time comes. Educating your kids is going to be an expensive affair in India and hence, it’s high time you start planning for the future. The sooner, the better.

LIC's Jeevan Tarun is one plan that can help you secure your kid’s future with a limited pay option. It is an ideal investment plan for securing your child's future against the hardships of life. LIC Jeevan Tarun offers several options for money back and maturity benefits. Be it education, marriage or for any other purpose, LIC’s Jeevan Tarun ensures that your next generation doesn’t have to face any financial problems. The plan offers extensive risk coverage, with a partial-pay option, in which the premium payment term range is shorter than the policy's maturity term.

Let's see how a child plan can help you to build a corpus to make your child's future bright.

But before that, you should know - What is a child plan?

What is a Child Plan?

A child plan is a typical life insurance plan with an opportunity for investment – to build a corpus for your child’s future. It is a financial instrument that will help in your child’s higher education.

The most beneficial aspect of a child plan is, that it not only provides monetary support at various growth stages of your child but also continues if the life assured passes away.

That is, your child’s future is safe, even if you are no more.

Benefits of a Child Plan

1. Secure your child’s future
2. Plan ahead to fulfill your child’s dream
3. Tax Benefits – Premiums paid are tax exempted
4. Peace of mind – As your child’s future is in safe hands, even if something unfortunate happens to you.

How Does a Child Plan Help in Your Child’s Education?

A child plan is a way of planting a seed for your child’s bright future.

It gives you an opportunity to ensure your child’s dreams come true. All child plans offer insurance and investment opportunity.

Moreover, some child plans have in-built different riders, such as accidental death benefit, waiver of premium, accidental total and permanent disability benefit rider, etc.

In case the policyholder passes away during the policy term, the insurance company pays the death benefit. Plus, the insurance company pays the premiums on your behalf and continues the policy till the end. This helps ensure the completion of your child’s education without any hindrance.

This way, you are protecting your child’s education. If you do not hold a child plan, it would be difficult for your child to complete their education, in case of such eventualities.

How Does a Child Plan Work?

As a concerned parent, you must be worried about fees for higher studies for your child. But, let us see an example to understand how a child plan works, so that you may sleep peacefully.

CASE CHILD PLAN PAYOUTS. If the policyholder passes away during the policy tenure, the insurance company pays the death benefit. However, the policy continues as the insurance company pays the remaining premiums. If the policyholder outlives the policy tenure insurance company pays the maturity benefit.

Example of a Child Plan:

Let us say, you have a 5-year-old kid. You plan to opt for a child plan, wherein the Sum Assured is Rs.20 lakh and a policy term of 10 years.

Case 1: The policyholder dies in the 5th year of policy term –

a) The insurance company pays the death benefit to the nominee.

b) The insurance pays the premium for the rest of the period i.e. 5 years.

c) The insurance company pays the maturity benefit at the end of the 10th year and the policy terminates.

Case 2: The policyholder outlives the policy tenure of 10 years –a) The insurance company pays the maturity benefit and the policy terminates.

Stay Prepared for Your Child's Educational Cost with a Child Plan

Long-Term planning for your child’s education is a must. And what other better, safe, and the guaranteed option is available to give you peace of mind other than a child plan?

When you invest in a child plan, you give your child an assurance of his/her bright future so that tomorrow they can be financially independent, grow, and prosper.

https://www.joshifinancial.com/content/Information/pi_plandetails.asp?linkid=83

https://www.krishnafinancialorg.com/child-plans/?