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In this policy, the investment risks in the investment portfolio is borne by the policyholder
Gone are the days when academic fees were affordable and fit easily into the regular household expenditure budget. Education costs have been rising for quite some time now and increasing at a rate of 12% per year on average. To help manage this peaking expenditure, children's plans can be a useful tool in building up a corpus. For that, all you need is a monthly saving scheme.
Prepping up for your child’s educational needs at the right time is an essential practice. And to do that, you don’t need to burden yourself. With the right strategy in place, saving an affordable amount every month in children's plans can help you create the desired fund for your child’s education. A monthly savings scheme allows you to pay a small amount every month, which grows at a compound interest rate and provides you with a lump sum maturity benefit at the end of the policy term. You can use this corpus to ensure a smooth academic experience for your child.
A monthly saving schedule to create a fund for your child’s education can be attained through various investment options. You can save through Systematic Investment plans, ULIP Investments for your childs future, Recurring deposits, Public Provident Fund (PPF) or debt funds to get the desired outcome. However, among these options, the most popular is the children's plan or the child ULIP. Child insurance plan is a combination of an insurance and investment plan aimed to fund your child’s educational needs. Here the premiums paid form the life cover while the policyholder gets to invest a part of that money in market-linked funds to fetch bigger returns. In a monthly saving schedule, the premium payable is relatively less and thus affordable, making it a convenient choice of investment. Moreover, the policyholder parent also earns tax benefits, making him/her gain while securing the child’s future.
Children's plans are designed to pay a lump sum upon maturity, which creates the desired fund to fulfil the child’s academic goals. Meanwhile, if the policyholder has an unfortunate demise within the policy term, the sum assured is paid as a death benefit. To ensure better coverage, optional riders like accidental death or disability and critical or terminal illness coverage can be added to the policy.
Some plans offer a waiver of the remaining premiums in the event of the policyholder’s death, where the policy continues to operate till the end of the term and the maturity benefit is paid in due course. Some plans also come with a partial withdrawal facility to help cope with sudden financial crunch or a regular payout option to support the child’s academic milestones. Thus, with the right choice of child insurance plan, creating a corpus for your kid’s academic future is no longer a daunting task.
As a child insurance policyholder with a monthly premium schedule, there are two major types of benefits you enjoy.
They say it’s always profitable to start early on investments. Children's plans are no different. Thanks to inflation rates, and the way the cost of education is escalating, building a decent corpus for the future is getting tougher every day. Starting early on a monthly scheme will give you an edge as the low premiums make a much bigger coverage amount affordable without burdening you. Isn’t that a wise deal?
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Reference links:
https://www.canarahsbclife.com/blog/child-plan/best-monthly-saving-schemes-for-childs-education
https://groww.in/blog/investing-for-children
ARN - ED/12/23/6641
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The Unit Linked Insurance products do not offer any liquidity during the first five years of the contract. The policyholders will not be able to surrender or withdraw the monies invested in Unit Linked Insurance Products completely or partially till the end of fifth year
For more details on risk factors, associated terms and conditions and exclusions please read sales brochure carefully before concluding a sale. Unit Linked Life Insurance products are different from the traditional insurance products and are subject to the risk factors. The premium paid in Unit Linked Life Insurance policies are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. HDFC Life Insurance Company Limited is only the name of the Insurance Company, The name of the company, name of the contract does not in any way indicate the quality of the contract, its future prospects or returns. Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document of the insurer. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns.