Introduction
Both child insurance and education plans are financial products designed to secure kid's future. Child insurance plan is a type of permanent life insurance that provides financial security for the entire life of the child. On the other hand, child education plan refers to the financial option that helps save money for child's future education. In this post we are going to discuss some major dissimilarities between child insurance and child education plans.
Difference Between Child Insurance And Education Plan
The main differences between kids insurance plan and education plan can be highlighted as follows:
1. Meaning
Child Insurance Plan: It is a type of financial option (combination of investment and insurance) that provides financial security for the entire life of the child.
Child Education Plan: It is a type of financial product that helps to invest and save money to fund the future education of the kid.
2. Time Horizon
Child Insurance Plan: It is long-term investment option because it is designed to provide long-term coverage.
Child Education Plan: It is short-term financial plan designed to meet future education cost of the child.
3. Scope
Child Insurance Plan: Scope of child insurance is wider scope of coverage because it provides large maturity benefit as well as death benefit in case of untimely death of the policyholder.
Child Education Plan: It has limited scope than child insurance because of limited coverage. It is designed to cover future educational costs for the child.
4. Risk Involved
Child Insurance Plan: It is less riskier than education plan
Child Education Plan: It is more riskier than child insurance plan.
5. Return On Investment
Child Insurance Plan: Return on investment depend on the performance of the insurance providing company. Generally, returns are lower than education plan.
Child Education Plan: It offers higher return than insurance plan because of high risk.
6. Purpose/Goal
Child Insurance Plan: Main purpose of buying child insurance plan is to secure kid's future against unforeseen tragic events.
Child Education Plan: Purpose of education plan is to save money to cover child's future educational costs.
Also Read
Advantages and disadvantages of child life insurance
Objectives of buying child life insurance policy
The main features of child insurance plan
Child Insurance Vs Education Plan (Comparison Table)
|
Basis Of Difference
|
Child Insurance Plan |
Child Education Plan |
|
Scope
|
Wider |
Narrower |
|
Return
|
Lower |
Higher |
|
Risk Involved
|
Less |
High |
|
Purpose
|
To provide financial security |
To save money for kid’s education |
|
Time Horizon
|
Long-term |
Short-term |
Distinction Between Child Insurance And Education Plan In Short:
* Child insurance is designed to provide financial security for kin's entire life. On the contrary, child education plan helps to invest and save money for child's higher education.
* Child insurance involves less risk and provides lower return but education plan involves higher level of risk and also generates higher return.
* Child insurance is purchased for long-term financial security but child education plan is for short-term purpose.
* Scope of child insurance is wider than education plan