Child plans offer dual benefits of investment and insurance. It ensures financial stability and protection to support the dreams of your little ones. A survey by The Economic Times found that 70% of mothers are highly involved in their child’s education and 50% of women’s key driver for investment is a child’s education. A comprehensive plan takes care of nutrition, education and career at the same time. Parents can expect better returns in comparison to traditional avenues like PPFs or FDs.
Whether the child wants to be a scientist or economist, begin investing ASAP. The top insurance company in India offers guaranteed pay outs at different stages and a waiver of premiums in case of the death of an insured parent. The child will receive the matured amount as a beneficiary to cater to any future needs. But choosing the right child plan is not a cakewalk. Below are a few factors to consider before making a purchase.
Inflation Rate
It is expected to increase gradually in the second half of 2022-2023. India will see a 6.2% in October-December and 5.8% in January-March. So, the price of education is less likely to remain the same over the next few years. The overall goal amount from preschool to primary education is highly affected. Factor in at least 8-10% inflation while planning for a child plan to be on the safe side. This will help you receive inflation-adjusted ROI to grow the funds.
Family Finances
This will help you determine how much to put aside in a child plan. Try not to invest more than you can afford. Use a calculator to figure out how much you will require that can smoothly cater to both education and hobbies of your kid. Further, they should also be able to lead a comfortable life when you are not around. Investors should think of picking a long investment horizon to be able to build sufficient wealth over time.
Claim Settlement
Settlement is the method by which an insurer will send money to the policyholder as compensation for death. The two major elements are cashless facilities or reimbursement. Try to work with a company that has already settled more than 90% of all claims made and can promise a quick and hassle-free process.You should only be required to present required documents with details like date and cause of accident and nominee information. The claim benefits will be provided as per the regulatory-mandated turnaround time.
Current Education Expenses
Start with answering questions like are you planning school fees or college costs? Would you like to send the child to a top institution in India or abroad? Are you aiming for a course that interests your children regardless of its popularity? Knowing all of these can help you determine the present education fees. Now you may pick the best child education plan that is ideal for individual requirement.
Keep the goals and ambitions of your kids in mind. Talk to an insurance expert to know the different types of plans available. This can help ensure quality education without hiccups.
