What are the Benefits of Education Insurance?
In this article, we will explain the benefits of education insurance.
Every parent wants to ensure their child gets the education he/she desires. However, with education costs rising every year, it can become difficult for parents to pay for it. But with the help of an education insurance plan, parents can achieve this goal.
What is an Education Insurance Plan?
An education insurance plan is a product that allows parents to invest money until their child reaches a specific age. The funds accumulated can be used to pay for the child’s education.
While it allows parents to invest to earn returns, it also provides life cover. In case the parent passes away during the term, then the child can receive the life cover amount. This amount can help him/her pay for future education.
Benefits of Education Insurance
To Help Your Kids Achieve Their Dreams
As the cost of education will rise every year, parents need to start investing to accumulate funds to finance it. Child education insurance can help parents build a corpus. Thus, a child can achieve the education he/she desires.
It is recommended for parents to start investing when their child is born. This will give them many years to build the funds they’ll require for education.
To Offer Financial Protection
One of the most important child insurance benefits is financial protection. In the unfortunate event of a parent’s death, the child might not be able to pay for the education expenses. However, an education insurance plan provides the child with financial security. The child can receive a sum assured amount. This amount can be used to cover education expenses.
Avoid Loss of Capital
As you invest in a child plan, your money can get invested in the stock market. However, your returns can vary as markets tend to move a lot. Child plans follow a fund allocation strategy to avoid loss of capital. Also, you can opt for a systematic transfer plan to make your investments based on your expected returns and the amount you’ll need to meet different goals.
You can also avail tax benefits by purchasing a child education insurance plan. The premium you pay can be claimed as a tax deduction up to Rs. 1.5 Lakh under Section 80C. Furthermore, under Section 10(10D), you can claim tax benefits on the maturity amount.
Parents can opt for add-ons to enhance the financial security provided by the plan. For instance, the policyholder can get a waiver of premium add-on. This add-on can waive off future premiums in case the parent passes away during the tenure. Some of the important add-ons are accident insurance, critical illness benefit, etc.
Education Insurance to Provide Financial Security
Education insurance is important to ensure a child has financial security to achieve his/her education goals. Such plans can make it easy for parents to accumulate funds to finance their kid’s education.