A child’s education is the primary concern of every parent. However, with the recent economic downturn, financing a child’s education has never been harder. With the high cost of living and probably several kids to care for, many children are often forced to stay home. Doesn’t sound too good? Well, there are various ways to finance your child’s education, but a child policy will go a long way.
How can you choose the best child’s education plan?
The first step to choosing your child’s education plan is evaluating your financial capability. Examine your resources and how long you have to provide for your child. Also, consider when you’ll be expected to make a considerable expense for your child. This can be, for instance, your child’s college studies.
Choose a child policy that will mature at this time, and that will be your term period. Calculate your expenses and how much you’re willing to spare. Go through the different plans available, and choose a premium that fits your budget.
What are the basic plans to consider?
You can go for an endowment policy or an investment-linked policy.
- Endowment policy
An endowment policy involves a savings component and protection coverage. It can be participating or non-participating.
Participating policy– With this plan, your insurance benefits are guaranteed. But the policy doesn’t participate in a life insurance fund.
Participating policy– With this child policy, only a portion of the insurance benefits are guaranteed. However, the total benefits are not warranted, for this depends on the firm’s fund performance.
- Investment-linked policy
An investment-linked policy is flexible and allows you to increase your premium contribution once your income improves. With this child policy, you can choose the types of funds where your money will be invested.
Are there other financing plans other than insurance?
There are various ways of saving up for your child’s education. Knowing your options will help you make an informed decision and plan accordingly. Check out other saving options to consider;
- Savings account
A savings account enables your child to save substantial amounts of money over time. An account can ensure a better future for your child and also encourage a saving culture. From a tender age, a savings account helps your child learn the importance of saving.
- Mutual funds
Investing in a mutual fund will help you accumulate amounts of money that you can use to finance your child’s educational expenses. Combine these with bouquet schemes like equity funds for enhanced growth opportunities. This way, you minimize your risk and boost your likelihood of reaping from your investment.
- Short-term fixed deposits
Divide your child’s educational plan into two categories. These are short term and long-term goals. For the short-term goals, consider bank savings and opt for short-term fixed deposits. The money will come in handy for things like co-curricular courses and other educational training.
A quick wrap up
The best way to plan for your child’s education is to start early. This way, you’ll have ample time to save and pick the right education plan. If you’re seeking the best way to finance your child’s education, talk to a professional from an insurance company in your state. They will guide you on the option available and how to choose the best child policy for your kid’s education.