Being a parent, your primary responsibility towards your kids is to ensure that they receive a quality education without having to compromise on your account. As you will want to fulfill all of their training needs, education expenses can prove to be a big hole in your pocket.
What you need is an ideal education plan that would cover all of the future costs of child’s education. As there are numerous education policies available in the market, following tips will help you to choose a perfect training plan fulfilling your child’s education needs.
Your monthly savings
You will have to determine how much you can save on a regular basis after looking carefully at your expenditure habits. Your monthly savings will form a base for choosing the child education plan as you will know how much premium you can afford as you have to pay them on a regular basis. Keep in mind that inability in paying the premium will result in lapsing of your insurance plan and you will not be entitled to any benefits.
Premium waiver benefit
Always invest in a plan that offers premium waiver benefit. The premium waiver is essential as if the parent dies during the policy term, the insurer waves off the future premiums while continuing to fund the policy till the maturity. This will allow your child to have a quality education even when you are not around to cover the education expenses.
Unit linked insurance plans
If you can save enough to invest your money. After paying for a life insurance policy and an insurance policy for your child’s education. Go for a unit linked insurance plan (ULIP). A unit linked insurance plan not only provides you with benefits of a traditional life insurance policy like the death and the maturity benefit but also invests a certain percentage of your money in funds of your choice. A ULIP allows you to periodically spend your savings with the added benefit of covering your life against any eventuality.
This makes ULIP a perfect alternative to a customized child education plan.
Education expenses can be costly when you think about the quantum of education your child will get. What if he gets a call from a good college abroad? What if he decides to do Ph.D. at the age of 25? You can never know exactly how much you will need to cover your child’s education expenses comprehensively. This uncertainty can only be avoided by having an insurance policy for your child’s education with an adequate cover so that you have enough money to pay for your child’s college without having to worry about covering your other expenses.
Before buying an insurance policy for your child, you should keep in mind that some other factors like inflation rates, government policies, market conditions, etc. can also affect your system as these factors have a direct relationship with the purchasing power of your money. What you think would be enough for your child today, could be insufficient in the future. Asking a financial adviser for his/her valuable advice would be the right thing to do.
Another important factor would be the number of kids you have. You have to consider the possibility that you will have to pay for education expenses of each one of them.
With the option of waiver of premium and numerous other riders, Edelweiss Tokio Life’s insurance policies would be ideal for your child to get a quality education. You can also avail tax benefits under section 80C and 10(10D).