Introduction
Child education plan is a financial option that helps the parents to save money for child's higher education. It includes saving, investment and insurance components. It ensures the availability of fund that helps to secure kid's future and career.
Importance Or Benefits Of Child Education Plan
Some of the main benefits of child education plan are as follows"
1. Provides Financial Security
One of the major benefits of child education plan is that it helps to meet kid's academic and occupational goals by providing financial coverage for education. So, it guarantees to provide future education costs to complete kid's higher education.
2. Provides Tax Advantage
Child education plan helps to reduce the tax burden because most education plans offer tax benefit. Premiums paid for this plan are qualify for tax deduction and can be subtracted from the taxable income. So, it lowers that amount of income tax to be paid.
3. Premium Waiver Benefit
As we know that child education plan includes life insurance component also , it offers premium waiver benefit. In case of death of parents, companies waive off future premiums but policy continuous. So, it provides financial protection (kid's education will be funded) in case of unforeseen circumstances.
4. It Avoids Loan
It provides huge maturity benefit after the policy is matured. It helps to cover entire education costs for higher education of the child. So, it avoids educational loans.
5. Flexibility
Flexibility is another benefit of child education plan. There are several plans that can be chosen on the basis of goals, risks and financial conditions. There are flexible premium payment terms (monthly, quarterly, half-yearly and yearly) and withdrawal options(partial or lump sum). Different riders can be added to enhance the coverage.
Also Read:
Objectives of buying child insurance policy
The main features of child insurance plan
Advantages and disadvantages of child insurance
Difference between child insurance plan and education plan
6. Loan Facility
Some companies provide facility to take loan against child education plan. It helps the parents to borrow money at lower interest rate in case of emergency.