Good Child Education Insurance Policies in India
Child education insurance, do you know everything about this insurance plan? No, then have a look about details information about child education insurance plans.The inflation present rate with the soaring education cost is sure to worry all of us. Today a top business school offering MBA course costs between Rs.5 to 8 lakh. The education cost in the future is sure to rise, considering the existing inflation rate. Considering this rate, you may require nearly Rs.25 lakh in 10 years from now if your child wishes to pursue MBA. Thus, planning for your child’s education will be of great help and act as a savior.
Typical Child Plan Features and Flexibilities
Planning the features for your child and the requirements in the future is always helpful.
The key parameters you must consider include about Child Education Insurance
Premium Amount- This depends on the sum assured as well as the maturity amount you choose.
Mode of Premium Payment –
- Regular premium- The premium here is paid on at regular periods. This may be yearly, half yearly or quarterly.
- Single premium – This is a single payment.
Sum Assured -The thumb rule is to follow the sum assured so that it is around 10 times the existing earning income.
Policy Term – An ideal Child education insurance plan is the time you consider your child needs to be on his feet. In case your child is 10 years old, the policy term must be 8 years.
Maturity Amount – Consider inflation rate by sitting with your financial advisor and other factors such as calculate the maturity amount required at the policy term end. Maturity amount may be received at an interval of 5 years or as a lump sum.
Waiver of Premium – Inbuilt child plans are always helpful. However, it is best because even if the insured dies, this policy will work and continue to offer financial assistance to your child, besides waiving of the premium.
Partial Withdrawals – Parents withdraw at pre-fixed intervals chunks of maturity amount. The intention is to meet the key moments in life.
Riders and Benefits – These make your coverage qualitative and are financially more valuable when it supports premium waiver, disability benefit, accidental death or critical illness rider benefit.
Child Educations Plan Types
- Child ULIPs – This is a premium fraction flowing into debt instruments and the balance is transferred into equity instruments. You can switch between funds decision remains that is available in the insured hands. It is a market linked plan and the maturity period depends on the net value of the assets.
- Child Endowment Plans – This plan for children is where the premium flows into debt instruments, and the insurance company takes the decision, while the return is payable on maturity with bonus.
One caution word
It is a must to choose a trusted appointee and he or she should be someone who equally shares a deep relationship with you and even in your absence will take absolute care. In case, there is something unfortunate, the claim amount is eventuality passes to the appointee who takes care of the child and this is until the child is capable of handling the money on his own. If the appointee is careless or cunning, the money may be spent on anything. So it is best to make double sure before choosing an appointee for the policy.
Child education fund plan Quick Tips
- Start early. Buying earlier enables collecting the corpus for a longer term. This benefits your child and also adds substance to your maturity amount.
- For children > 10 years, a longer term policy such as ULIPs is the best. The initial periods is focused on equity instruments so that maximum profits are received and by the end of the policy term, funds must be transferred to debt instruments.
- Consult your friends, relatives and take referrals, if you are investing for the first time. Look for an agent having good clientele and experience. This is because he will give you the right information and will not attempt hooking you as a client. Agents who have good clientele always aim at maintaining good relationship so that you are benefited and give more business.
- Child plans are many so choose that meets your needs and budget. You can do online comparison or check for insurance quote from other insurers and opt for the best child education insurance plan.