Having a child is a wondrous feeling for parents. Every parent dreams to provide their child with the best education for their future. A child education plan is a blend of investment and insurance. It is the best option for securing your child’s career and future in a planned manner.
Education costs have reached their heights. Did you know that as per a survey, parents spend more than half of their annual income to meet the educational requirements of their child?
Meeting these financial costs can become troublesome in the near future. However, there is no better gift than financial security to your child, apart from the love you shower!
To help you understand better, check out some beneficial factors of having a child education plan-
1. Fulfill your Child’s dream
Investing today in your child’s education will reap the benefits for their future. Nowadays, the fees of courses are already so expensive. For instance, BTech course fees range from 2-3 lakhs per annum. Till the time your child takes this course, the cost will be more expensive. Here, a child education plan will help you.
Say you invest 10,000 monthly for 18 years. As you will be requiring money by the time your child turns 18. If we expect a return of 11% your investment could grow to Rs. 68.01 lakhs* after 18 years. The power of compounding will grow your wealth exponentially.
So, start investing wisely now, accumulate the corpus and you’ll end up with a sufficient amount for paying exorbitant college fees. Fulfill your child’s dream and let them fly high!
2. Partial withdrawal Facility
Your child in the future might get passionate to learn something new. For instance, they might possess a special talent like playing an instrument or acting. For such talent, you should be ready to encourage them financially.
You could make a partial withdrawal from your child’s education plan to help your child further pursue their talent. There are certain plans that offer periodic pay-outs. Thus, you can use this to fulfill the expenses and encourage your child to participate in such activities.
3. Supports in the Absence of Parent(s)
Death is natural and it ought to come someday. The death of a parent is a major loss for a child. As the future of a child might get hanged by a thread. However, the best thing with a child education plan is that after you, your child will get financial cover.
The child plan pays a lump-sum amount in case of the death of the breadwinner of the family who paid the premium covers. This amount provided will be tax-free. The motive behind this to pay off any immediate debts so that child’s education is not impacted in any way!
Due to COVID-19, the government has slashed the interest rates of the Sukanya Samridhi Scheme from 8.64% to 7.6% for a single quarter. Thus, these rates will further fall more as to step towards becoming a developed economy.
4. Avail Tax Benefits
The best thing about a child education plan is that it offers significant tax-saving benefits. As per Section 80C, a premium paid on a child education plan is eligible for a tax deduction up to Rs. 1.5 lakhs in a year. Tax benefits after maturity can also be availed after the maturity of the policy under Section 10(10D).
So, why restrain yourself from getting a child plan, as it can give you the best of both worlds. One, securing your child’s education by being financially prepared, and secondly, you get tax-free benefits!!
As expensive the education cost is rising, the importance of education is rising too! It is crucial to arrange financial assistance for your child’s education in advance. Start by paying off premiums and get yourself ready for your child’s future.
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