Differences Between Child Education Plans and Child Insurance Plans

Differences Between Child Education Plans and Child Insurance Plans

Child insurance and investment plans are designed to secure your child’s future. This is especially needed in the unfortunate event of a parent’s death. Well-structured policies ensure the children do not have to compromise on their educational needs and lifestyle. But both plans differ from each other in certain aspects. It is vital to have a clear idea of the features and benefits of each one for an informed choice. For example, a child education plan offers adequate financial backup to make sure your child’s career goals are fulfilled. It offers guaranteed smart benefits with the convenience to pay one-time or limited premiums. Below is a detailed guide on how each one has unique differences.

Child Insurance Plan

Child life insurance plans ensure the child is financially covered in the absence of parents. It helps them make a fresh start without having to kill their dreams. The amount at maturity can be used for multiple purposes like a wedding or paying for higher studies. The insurance company also sends eligible bonuses, if any.  In simple terms, it can be used for any child related expense. So, you are indirectly fulfilling your responsibilities towards your children without hiccups.

Child Education Plan

Nothing can truly compensate for the loss of parents. Yet a child education plan can make sure their studies continue uninterruptedly. This is also quite helpful if the parent has lost their job for multiple reasons like lay-offs or physical disability. This child insurance plan is solely designed to cover the growing educational needs. This is made clear in the policy documents. It is not meant to pay for other expenses except the ones related to different stages of a student’s life. The best child investment plans are usually individual, non-linked and participating products that can be activated as soon as your child turns 18.

A few key benefits of the child education policy will include:

  • Triple protection in the form of lump-sum pay out.
  • Tax benefits as per the Income Tax Laws
  • Life and Accidental Total Permanent Disability coverage.
  • Immediate payment of sum assured and premium waiver in case of an eventuality
  • Smart benefits in four equal instalments.
  • Premium waiver of the best child insurance plan in case of an eventuality

You can also get regular loyalty additions for in-force child policy on completion of certain durations. Look for a child insurance policy that offers partial withdrawals from the 6th policy year. You have the flexibility to invest in funds of your choice and can make partial withdrawals to meet unexpected expenses as well. The annual premium range of the best child plans usually starts from as low as ₹6,000 which makes it quite affordable. In short, it is an all-encompassing financial solution for securing a child’s future.

Before applying for the plans, read the product brochure and documents carefully. Use a child education calculator and pick the one that suits your financial capability to be able to clear the premiums on time. All of this can help assure an excellent investment experience.

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