Best Ways To Invest For Your Child’s Education

Investing for children and researching the right savings plan for kids is extremely important in today’s day and age. This is because education is costing a lot more, the average age of parenting is going up, and therefore, age-related health risks are higher for parents even when their children are still in school. Further, nuclear families and double-income families with no one to fall back on in case of an unfortunate event in the family can put all the burden of raising the children on a single parent.

Need For Investing In Child’s Education And Future Security

This can create lot of pressure on parents in their 30s and 40s to strategically invest in a savings plan for kids on a monthly or annual basis. Additionally, they are also keen to invest in term plan to secure death benefit and sum assured for the family in case of an unfortunate event. Often, this results in parents investing small or inadequate amounts towards both financial needs – term insurance and savings plan for kids. The need for the hour in such cases is one financial product that addresses both needs.

Dual Benefit Solution

If you are wondering about a product that works as a savings plan for kids and term insurance, your wish is a reality. Leading insurance providers such as Royal Sundaram offer comprehensive term insurance with add-on benefits. Depending on different life stages, there are various add-on benefits that you can choose while paying premium for term insurance and life cover. For instance, you can opt for Child’s Future Protect Benefit under its Total Protect Plus term insurance. This ensures additional sum assured until your child or children turn 25 and are likely to be no longer dependent on you or income from your life insurance.

Key Benefits Of Dual Solution

Moreover, such term insurance offers various additional benefits. Apart from serving as a saving plan for kids in the case of an unfortunate event, it also offers immense tax benefits. The amount paid towards such term insurance is exempted from tax liability under Section 80 C. The maximum annual limit for such tax benefit on the premium is Rs.15000 in one fiscal year. Further, the sum received at the time of claim is also tax-free. This ensures your children’s emergency education fund doesn’t get reduced owing to tax liabilities.

Secondly, this term insurance, which includes kids savings plan feature, offers guaranteed sum assured in case of death claim. This means that it is not linked to market performance. And hence, if there is a claim even when the market is at an all-time low, your family does not have to worry about it impacting your children’s education fund. This is an extremely important factor to consider since education fees cannot wait for the market cycles to turn in the case of an adversity in the family that leads to need for filing an insurance claim.

Lastly, such a plan offers another add-on benefit – you can insure yourself as well as your spouse. Hence, this ensures your children are financially protected in case of an unfortunate event taking place with either parent.

Conclusion

When it comes to kids savings plan or term insurance, traditional products may not always be your best bet. On the other hand, term insurance that offers additional cover to double up as kids savings plan in case of an unfortunate event with either parent, offer multiple benefits. Hence, it makes sense to compare your options before you go ahead and make a long-term financial commitment.