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In this policy, the investment risks in the investment portfolio is borne by the policyholder
The way the Indian and global economy is evolving, it’s increasingly crucial to have a well-strategized academic path to be a relevant choice for employers. And to ensure that your child has one in place, it’s important to have a corpus ready to fund his/her educational needs. An online savings plan can be sensible choice as it provides you with a hassle-free scope of investment to secure your child’s education fund. But it’s essential to know how to use the child insurance plan in the best way to maximize its benefits.
A child insurance plan is designed to take care of and fund your child’s educational needs. A combination of an insurance and investment plan, these savings plans pay a lump sum payout upon maturity. However, if you die within the policy term, the sum assured is paid to the child, so that he/she can carry on along the desired academic path, without any financial burden.
Different types of online savings schemes are available in the market, which can be a good bet to build a corpus for your child’s education. They are:
These plans allow you to save in a monthly or quarterly schedule and invest in mutual funds. Investing a small amount every month doesn’t pinch your pocket and helps grow your money over time. Choose a plan that aligns with your child’s age and educational needs.
A Unit Linked Insurance Plan combines the benefits of life insurance and an investment opportunity, which can help you achieve financial security for your child’s future. Part of the premium in ULIP’s forms the life cover, which is paid to your child in the event of an unforeseen death benefit. The rest is invested in a portfolio of equities and debt securities to fetch optimum returns.
Debt funds offer a guaranteed return by investing your money in fixed-income instruments like bonds. This protects and retains your capital despite market fluctuations to create the desired corpus.
This is a short-term savings scheme that allows you to make monthly deposits for a pre-defined period and earn compound interest. It’s a good and secure way to save and build a corpus for your child’s education.
It is a long-term savings scheme that can be opened for anyone above 18 years of age and has a maturity period of 15 years. Here the money grows at a high compound interest rate of 7% and the withdrawal is allowed after a lock-in period of 5 years.
Not just your child, investing in a child education plan can be beneficial for you too. You can enjoy tax benefits from these online savings instruments. Premiums paid up to Rs 1.5 lakh per annum are tax-free under section 80C of the Income Tax Act, 19611 while tax exemptions for the death and maturity benefits are available under section 10(10D)1. Partial withdrawals too are tax-free.
Choosing online savings options for your child's insurance plan has its share of benefits. All you need is to activate automatic deductions and sit back and relax. Disciplined savings, tax benefits and a corpus ready for your child’s future. Doesn’t that sound good?
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ARN - ED/12/23/6686
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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.