child education savings plan india

Children Education Planning

By admin_mutual | Feb 01, 2023

Planning for your child’s education is essential and has a big impact on their life. Additionally, it provides you with a plan for judiciously balancing your income and expenses. This eliminates the possibility of overlapping expenses, unrealized goals, and financial stress. If you have children or plan to soon, you should begin early budgeting for their educational costs. The sooner you begin, the better your standard of living and the future of your child can be.

 

Child Education Plan

 

A child plan, which combines insurance and investments, aids in financial planning for a son or daughter’s future needs. The insurance component makes sure that a child is still protected in the unfortunate event of a parent’s passing.

 

You can build up a large-enough corpus through the investment route to protect your child’s future. Furthermore, child plans offer flexible payouts at significant junctures that can efficiently pay for a child’s education at various stages.

 

Insurance buyers frequently look for ways to reduce their tax obligations apart from the annual income benefit and the death benefit. It is important to note that child insurance plans, like all other insurance plans, have tax advantages.

 

Term Insurance Plan

 

Although it is frequently used as an investment, life insurance should be viewed first and foremost as a protection plan for your family. Your life insurance can become a substitute of your income in the event of your untimely death, maintain your family’s financial stability, and assist your children in achieving their life objectives. Your life insurance must be 10–20 times what you make now, at least. You can meet such requirement for coverage and guarantee financial security for your family even after your death, with a term insurance plan in place.

 

Mutual Funds

 

Parents may aim for higher return investments with lower risk while doing financial planning for the education of a child. Given their track record of outperforming inflation-adjusted benchmark indices in terms of returns, mutual funds happen to be the best option for investors in this situation.

 

In addition to beginning savings as soon as possible, parents should consider a number of other factors while looking for the best mutual funds to invest in, such as:

 

  • The child’s age,
  • Educational path,
  • Asset allocation,
  • Capacity for accepting risk,
  • Investment horizon, and
  • Capital accumulation for the future goals of the child.

 

The education of children is generally a long-term objective, and there is also significant cost inflation in this area. As a result, you should make investments using methods that beat inflation. You can take moderate risks with a long investment horizon, which may result in high long-term returns.

 

:: Audio Version ::

Leave a comment

Your email address will not be published. Required fields are marked *