Importance of child investment plans
As parents, providing your kids with the greatest education given the growing expense of school is your number one priority.
By making early child investment plans, you make sure that your kids won’t have to abandon their aspirations due to a lack of funding.
Let’s find out the importance of child investment plans and how child plans solidify your child’s future.
What is a child investment plan?
Child investment plans are specialized life insurance policies that assist you in meeting your savings and life insurance needs while providing for the future security of your children.
Being a parent, correctly raising your kids, and giving them a solid education must be among your top priorities.
You may realize all of your goals for your child with the use of a child plan, including assisting them in pursuing their desire to attend a top institution.
Importance of child investment plans
Child Investment plans for children help you and your child prepare financially for growing education costs, unanticipated illnesses, and bad circumstances.
Planning for your child’s future must begin as soon as feasible. This lengthens the time frame over which your assets can increase and balances the associated risks.
The following are some benefits of investing in a child’s plan:
1. Funding for children’s education
As your child gets older, a significant portion of your resources will go into paying for your child’s education, thus preparing for higher education is essential for guaranteeing their future.
You may generate the money required so that your child can follow their ideal job by investing in their education.
With college costs increasing, every day matters when it comes to being financially prepared for your child’s education.
Get in touch with our experts at EduFund and you can save up to 2.5 Cr by starting today.
2. Flexibility to withdraw part of funds
By selecting a child investment plan that gives you the freedom to withdraw funds as per your kid’s requirements, you may easily access a portion of your funds while the remainder of your investments continues to grow.
3. Protection against uncertain times
Many kid insurance policies have advantages including premium waivers. This makes it such that, in the sad event that anything bad happens, future premium payments won’t be necessary.
The investment yields a lump sum payment upon maturity and grows without the requirement for premium payments. This guarantees that no matter what, your child’s dreams are protected.
Different investment plans for your child
Fixed deposits and other traditional products might not be enough to cover your child’s college costs. Other products like equities funds, balanced funds, and shares should be taken into account.
You can select one of the following investment strategies depending on your time frame:
- The best option is debt mutual funds if your child will need the money within five years. Such funds can provide liquidity while producing returns that are more than the rate of inflation.
- You can mix several financial products for long-term aims. You have the option of investing in gold, stocks, and debt. Although exposure to the stock market is hazardous, investing in equities gives investors the chance to generate larger profits over the long run.
- PPF is one of the greatest investment options for financing a child’s education. To establish a sizable corpus, you must begin this early and invest steadily.
- Numerous insurance providers provide a range of kid-focused solutions. When your child needs the money to pursue further education, you may choose to implement more mature policies.
Investment strategy for child investment plans
List concrete objectives from the outset, such as the child’s desired schooling and associated fees.
This will enable you to estimate how much you can afford after paying all of your usual bills and how much you need to save each month.
You must keep in mind, though, that loans can also be used to pay for education. Saving for your child’s education does not, therefore, require you to forgo other expenses like healthcare and retirement.
Reduce your stock exposure as the financial objective approaches to lower the chance of negative market moves.
When is the best time to buy a child’s education plan?
Generally speaking, it is best to get a kid’s education plan as soon as possible. This is so that you can leverage the benefits of compounding if your investment has more time to develop.
What various child education programs are there in India?
Currently, India offers 3 main kinds of child education plans:
- Equity-Linked Child Plans
- Endowment Child Plan
- Guaranteed Return Child Plans
Which investment is good for a child’s future?
When your child is still small and you have at least 15 to 20 years till retirement, it is excellent to begin investing in equities mutual funds.
This enables you to withstand shocks like stock market collapses and volatility.
Investment plans for children help you and your child prepare financially for growing education costs, unanticipated illnesses, and bad circumstances.
Planning for your child’s future must begin as soon as feasible. This spreads out the risks involved and gives your assets more time to flourish.