These days, many parents examine their children’s savings plans and unit-linked insurance plans that insurance firms and fund houses frequently offer. Although the returns are low, they do offer insurance and some form of safety comfort in education plans for child. In fact, your returns are decreased if you deduct the cost of these children’s policies.
Choose a straightforward term insurance plan that will cover all of your needs if you want to ensure that your child’s schooling and other costs are covered in the event of your untimely death. After purchasing insurance, you might consider the options below to create a strong fund for your child’s education. These outstanding education plans for child investing savings schemes are listed below.
- PPF For several reasons, this investment plan is the finest. With this 15-year program, you can save money for your child’s education. Bank interest rates, which are now at 5%, are vastly outperformed by the current rate of 7.1%. It is hoped that the government will change the interest rates starting in the next quarters given that the RBI is likely to increase interest rates and bond yields are growing.
- Life Smart Scholar by SBI: It is an unaffiliated unit-linked insurance plan (ULIP) in education plans for child. In the event that you are absent, your family is double protected by this plan. The base sum is insured, and an integrated premium or an integrated withdrawal indemnity ensures that your policy will remain in effect.
- The SBI Smart Champ Insurance Plan is an unbound, individually-administered life insurance policy created to cover your child’s future educational expenses. It gave the applicant insurance coverage and benefits that are payable for the duration of the policy. In the case of a term insurance plan, he would be covered for life as well as to the policyholder in the event of death and accidental permanent total impairment.
- Account of Sukanya Samriddhi You can invest in the Sukanya Samriddhi Account as a fantastic way to help your children grow up and as another excellent way to help you build wealth for their future. This program offers tax-free interest at a rate of 7.6%. Of course, you can only take this into consideration if your child is a girl.
- Mutual equity funds When it comes to using equity mutual funds to create wealth for children, everyone frequently goes all in. That said, there are some dangers. The problem is that it’s challenging to forecast market behavior at redemption and whether your child will require the funds.
Following are some tips that might be helpful for you to how to opt for the education plans for child that you are looking for.
- Choose the appropriate kind of child education plan: Three different types of policies are available: unit-linked insurance plans, money-back policies, and endowment policies (ULIPs).
- Know how these plans’ child insurance provisions work: What would happen to your child’s overseas education if you passed away unexpectedly? The best child education plans, like ULIPs with waiver of premiums, make sure that the insurance company keeps making investments in addition to giving your child a lump sum as the sum assured. The child insurance component of endowment and money-back policies offers a lump sum sum in the event of an unfortunate event.
- Utilize the attributes and advantages of child education plans: You should think about the advantages of a child education plan before making arrangements for your child’s education overseas. Section 80C of the Income Tax Act allows for tax-free premium payments for plans, and Section 10D of the act exempts the maturity benefits and sum assured from taxation.