The traditional ways to save for your child’s future rarely involved anything more than creating savings through bank accounts or low-risk investment options that offered steady but gradual growth. As safe and accessible young parents may have believed these options to be, they did not offer features or benefits that worked specifically for the needs of a young one.

For parents today who aspire to fulfil all dreams of their kids, child education plans offer a dedicated and disciplined approach towards savings and growth. Let’s get a better look at what these plans offer and why you should get one.

What are Child Education Plans?

A child education plan is a way for parents to build a corpus for their child in a way that it will be accessible to the child at all their major milestones in life. The features of these plans are built in a way that helps you to stay on track with your goals and lets your child pursue their passions without any financial stress.

Another aspect that most of these plans offer is - life insurance. The person insured through these policies is the policyholder (the parent). Thus, any death benefits that may be received through this policy are passed on to the child. You will not have any lingering worries about the financial needs of your child in a future where you may not be around. The plan will help you create precautionary measures for the same.

You can pick a plan as early as you would like during the life of your child. Starting early may afford you a longer cover and help you plan better. You can choose your premium frequency as per the available options and also on the basis of what suits you best.

Advantages of Child Education Plans

A child policy is an organised way for a parent to prepare for the child’s future, without having to experience financial stress. They can decide their goals, and using a child education calculator, get an idea of what they need to put into the plan over the years to achieve these goals. Here are some key advantages of having a child education plan.

• Securing your child’s future

Before your child makes it on their own, they will need your support as they take the steps to fulfil their dreams. This support can be financial or otherwise. With passing years, inflation may make it difficult for you to afford to support them financially unless you have prepared for it. A child policy allows you to do that.

• Tax Benefits

These policies come in various formats, and you can choose what suits you best. With most of them, you can earn some tax exemptions. Read through the policy document or consult a tax advisor to understand how you can make the best of it.

• Maturity Benefits for Higher Education

The cost of education has increased significantly over the past few years. The same can be expected to continue for the next few. However, this should not have to be a reason for your little one to compromise on their dreams. A child education policy will pay maturity benefits at a time that it can be used to fulfil higher education expenses.

• Partial Withdrawals

The need for financial support can arise at any phase of your child’s life. During the policy duration, you can choose to make partial withdrawals that would support these needs. Depending on the type of policy, there may be limits on partial withdrawals. Consult your insurance advisor to know more about the same.

• Collateral for Loans

Another way these policies make financial support accessible is by acting as collateral for a loan. If you do not seek to get partial withdrawals for your policy, you can use it to secure a loan as well. This should help you cover any costs that arise along the way.

As a parent, you may believe that there is no single way to create a corpus for your child. But instead of putting your money into multiple avenues that cannot be disturbed till the end of their term, you can choose a child plan that offers flexibility and an organised approach.