How2invest

We undoubtedly want what’s best for our kids at all times, right? This includes their education and other aspirations down the line. Thus, for any parent, financially securing the child’s future is always a major priority. In the current context, where lifestyle and educational costs are on the upswing, having a proper financial plan is vital. You can consider a child plan investment for this purpose.

What is a Child Investment Plan?

A child plan investment works in several ways. In essence, it’s a specific financial product tailored to help you amass suitable funds for the future of your child. These are investments that help you build up your savings in a more disciplined way. They also come with additional benefits such as life coverage. The whole aim is to offer funding at various vital milestones like higher education, weddings, etc. Child plans typically come as either traditional insurance plans or Unit Linked Insurance Plans (ULIPs), each offering varying risk and return levels.

Top Reasons to Choose a Child Plan

Education costs have been going up considerably throughout India and even abroad. If you’re looking to educate your child at a top-tier college or university, while enabling specialized coaching/training, then the expenditure will be a hefty amount. A child plan investment will help manage these expenses without overburdening your finances.

You don’t have to worry about the financial future of your child in case you suddenly pass away. In case of any such tragic incident, the in-built life coverage comes into play, guaranteeing a lump sum protection for the child and continuation of the plan without disruptions, often through a premium waiver benefit.

You can always use these plans to build up considerable savings over the long term. They also have particular lock-in periods, such as the five-year minimum for ULIPs, which will encourage you to remain committed to them. This disciplined approach will ultimately help you build sizable future wealth without any hassles.

Several child plan investments will give you tax benefits. These come under the Income Tax Act’s Section 10 (10D) and 80C, provided certain conditions are met. It is a win-win scenario since you get to secure your child’s financial future while saving on taxes simultaneously.You can also enjoy flexible and customizable options for payouts under these plans. Some traditional plans offer milestone-based withdrawals or money-back features, which can be tailored as per key milestones in your child’s life, such as college or school admissions. This is a really unique feature, as you can withdraw funds as and when required.

How to Select the Best Child Investment Plan?

When you’re choosing any child plan, take a few major factors into account at all times. These include the options for premium payments, the tenure, and, of course, the lock-in period. Other aspects include maturity benefits and add-ons/riders that you can opt for. You should evaluate your financial circumstances and goals along with the potential future aspirations of your child alongside.

Conclusion

Investing in a suitable child plan is vital for building a financially secure and worry-free future for your little ones. This will give you not just mental peace but also comfort in knowing that you can meet your child’s future needs without having to strain your finances.