The rising cost of higher education in India doesn’t seem like taking a break any soon time soon. In 2017, the market worth of the education sector was around ₹7,08,000 crores.In this, the higher education segment contributed 60% and school education contributed about 40%, as published by Times Graduates in June 2017.
The pace at which the cost of education is rising in India is much faster than our inflation. This is why it is always recommended for parents to invest in a good child insurance policy.
Life insurance for children offers dual benefits of investment and insurance.Such plans ensure a secure future for children. The policy offers maturity benefits, paying a sum assured as the child attains adulthood. The child insurance company will insure the life of the minor and offer death benefits too. In case of the unfortunate demise of the child, the policy also protects the family against the sudden and unexpected costs such a loss.
5 Ways a Child Policy is Beneficial for the Future
- Helps in Funding Expensive Education: The aim of most parents is to save for their child’s education, keeping their own hopes and aspirations aside. A children’s policy comes for the rescue of such parents.
- Encourages Early Savings: A child insurance plan can be bought when the child is as young as 2 weeks. This gives parents a lot of time to save money and accumulate the maximum wealth to ensure a secure future and the best education for their little one. Buying child insurance at the earliest helps parents gain the advantage of low rates and high returns.
- Regular Savings: When saving, discipline is the key. However, we have the tendency to procrastinate things, especially saving. When you save regularly, you need to put away small amounts to build a large corpus, rather than having to suddenly invest a huge amount. A child plan requires parents to make periodic investments towards a saving tool. If required, parents can even withdraw money from the plan, since most plans allows occasional withdrawals before maturity.
- Pays for Education Even if the Investing Parent Dies: Premium waiver offered by the child insurance company in case of the unfortunate demise of the parent is a major advantage that adds to the desirability of a children plan. The beneficiary or the child gets the pre-decided lump sum amount on maturity to help them pursue the dreams their parent once saw for them.
- Can be Used to Take a Secured Loan: If required, a child plan can be used as security to get a loan. Many banks and other lenders accept child insurance policiesto process education loans and other personal loans.
It is really important for parents to be sure of the reasons why they are investing in a child policy. Is it for education? Or for marriage? This will help parents do the right calculations to decide on the amount, while taking inflation into account.