Want To Save For Your Child's Education? Here Are The Key Ways To Do So

Child education plans are comparable to traditional life insurance policies. The key distinction is that these programs are particularly designed to suit your child's future financial requirements. The premiums for these plans are invested in a variety of investment assets chosen by you. If the policyholder dies, the death benefit or sum guaranteed is paid to the child named as the nominee of the life insurance policy, just like in a traditional life insurance policy. You can also choose between a maturity benefit and a maturity time. Even if you are not present, money from the death benefit or the maturity benefit helps to secure your child's future.

Ways for Saving for Your Child's Education

A well-planned future supported by financial stability will allow your children to receive the best education possible; thus, it is recommended that you start saving and investing your money at a young age so that when a large sum of money is required, you have your savings to fall back on. Here are some suggestions for saving for your child's education:

1. Purchase A Child Plan

When it comes to securing your loved ones' future, life insurance plans are the best items to invest in. Investing in Life Insurance Policies that cover your children's school expenses is an excellent investment if your child wants to attend a school that charges up to 5 times your annual salary. Such preparations are known as Child Arrangements. It is advised that you obtain a policy worth ten times your yearly wage, and if it does not cover your educational expenses, you should consider changing plans or adding a rider.

2. Invest In Assets Such As Real Estate

Real estate assets seldom degrade; rather, their value increases substantially over time. When your children reach a particular age and require a significant sum of money to study overseas, you may be able to sell the land or property for 30 to 40 times the cost price you paid for it if you invest in assets such as real estate early in your career. If there are no legal difficulties, nothing may be more beneficial than real estate.

3. Fund Your Public Provident Fund Account

The Public Provident Fund, or PPF, is the only investment in which most working professionals put their money. It is a low-risk option that allows for tax-free withdrawals. Although the returns are lower, they are more predictable, making it a more secure and stable investment. However, there is an annual restriction to the amount of money that may be invested through this way - Rs. 1,50,000. PPFs are also less suitable for investors willing to take on additional risks by investing in business funds.

4. Invest In Mutual Funds

Financial planning to build a corpus fund for a specific purpose has grown in popularity over the last decade or so. Investing in education is also an important component. Creating a retirement income is rather popular, and a small number of investors are also parents who want to save for their children's education. SIPs, which allow you to contribute on a monthly basis, may provide higher returns than one-time/lump sum investment mutual funds, especially over significantly longer time periods.

Conclusion

Saving for your child's education is one of the finest decisions you can make as a parent. This will not only secure your child's future but will also help you fulfill your responsibility as a responsible parent. Examine the above-mentioned techniques of saving and start investing right now.

You may also like to read - Tips To Keep Your Child's Future Financially Secured

Steps To Choose The Right Child Life Insurance Plan

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.