Every parent considers providing a good life and education to their child as the ultimate goal of parental responsibilities. For this, they go through difficult measures to provide for the costs incurred for a better lifestyle and schooling. Sometimes limitations like a rationed income or savings can create problems in providing the best resources to their child. To tackle this problem of insufficient funds, they use several savings and investment plans to generate necessary funds. A child education plan is a specially designed plan for children that can help you in such situations. Read on to know more about child education plans and how to employ them to fund your child’s education.
What is a Child Education Plan?
A child education plan is a plan that is solely for children and provides funds required to meet educational expenses. They can be savings schemes, recurring deposit schemes, or fixed deposit schemes. But mostly, a child education plan refers to term insurance which provides high returns when purchased for a minor. All major insurers in India have their version of child education plans. And these plans are capable of providing some of the highest returns and interest rates higher in insurance policies.
Why is a Child Education Plan Necessary?
A child plan is an absolute necessity of any family or individual responsible for the upbringing of a child. The burdens of education expenses can affect everyone, including single parents, single earning members, people with two or more children, guardians with a limited income source, or people with high existing financial liabilities. But even if you don’t belong to any of these categories, you must have a plan capable of providing higher returns. It gives your child the freedom to choose whichever educational stream they like. Which in turn gives them the chance to grow and excel in their career.
Steps in Funding Your Child’s Education with a Child Policy Plan
After understanding why you must fund your child’s education, you must now know how to fund your child’s education. The how part of this problem deals with the approaches and decisions you make while choosing and paying for such child education plans. While several approaches to funding your child’s education exist, you must only rely on tried and tested methods. Given below are the approaches you must adopt to obtain high results from the plan.
Find out the Estimated Cost of Education
Finding out the estimated cost of education by the time your child reaches the higher education age is important. It will give you a rough idea of the money you need to obtain as a maturity amount. Sometimes children do not show particular interest in any field until they reach the 10th or 12th grade. So, you can add relaxations to this estimated cost by considering the average expenses related to common professional courses. It would be best if you also considered factors like inflation, housing, food, foreign education, emigration, etc. This will provide you with a safe range of estimated costs.
Compare and Select a Plan Capable of Providing the Required Amount
After finding out the estimated cost, the next stage is choosing plans that provide such maturity amount. For this, you can employ various methods of comparison and selection like the ones given below.
Prefer funds with zero risks
Invest in long term plans
Choose investment plans with regular payouts for studying children
Go for plan customization
Reduce Your Unnecessary Expenses to Accommodate the Premium
After choosing the plan, complete the policy purchase procedures. Now you can make several changes in your handling of money to bear the added cost of the premium. You don’t need to change your lifestyle completely. You just need to take a few measures to reduce your unnecessary expenditures. You can save a lot of money and divert it towards the child education plan by reducing such expenses. By doing so, you won’t even feel the surge in your expenses due to the new premium payments.
These methods will provide you with the knowledge to effectively fund your child’s education with the best child plan. Follow these steps, and you won’t have any problems choosing the best child plan and simultaneously reducing your financial burdens.