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Child Education Plans vs Child Insurance

March 08, 2017 5280
As a parent, nothing is perhaps more important that ensuring a secure future for your child. Both child education plan and child insurance plans are means of securing your child's future but with a difference. As the name itself suggests, an education plan is primarily for the ongoing education of your child, from the time they enter school till the time they graduate out of college, ready to take on life. At predetermined maturity millstones funding is made available at definite periods to pay for your child's growing education needs. A Child insurance plan on the other hand will provide full term amounts or compensate the child on maturity and allow them to continue their studies in the event of unfortunate death of parent. While this is the key difference, there are some points of difference between the two as well.
 

For example, most child education plans are generally short term. They offer quarterly or annual payouts on maturity of the sum invested. This lets you plan your child's finances in the short term and get benefits at definite stages. If you start investing in an education plans when your child is in kindergarten, the primary education costs will be covered. Similarly, if you start investing when the child is in secondary school, maturity financial benefits will be available when your child goes to college. As opposed to this, child insurance plans are relatively more long-term investments that you as a parent can opt for directly from the time your child is born or even before that. The maturity tenure is generally pre-determined and it covers the risks involved with the unforeseen death of the parent.

The primary reason for child insurance plan is making sure that your child receives uninterrupted necessary education regardless of the presence or absence of a parent. While nothing can truly make up for the loss of a parents or guardian, your child's right to get the education that he or she deserves must be safeguarded. Of course, nothing can substitute your physical presence as parent but even if you as a policyholder die or lose your job due to permanent disability, your child can continue with studies, thanks to your child insurance plan.

Understanding Difference between Child Education Plan and Child Insurance Plan is about differentiating between education benefits and death benefits. A child education plan is only for covering the education cost of your child. It is a clear and precise plan that funds the costs related to studies in the various stages of a student journey. Ideally, one shouldn't expect more as they are not designed to take care of any other expenses.

There is little doubt regarding the fact that child education plan has a limited scope when it comes to related benefits. If you want to cover all your child's costs and make sure that in your absence your child can make a fresh start and have the life that you wish for them. Thus, the benefits that a child insurance plan are only limited by your imagination. If you invest wisely, a child insurance plan can even cover costs like your child's wedding, further studies, etc. The maturity benefit that your child receives can be used for any expenses.

While both child education and insurance plans provide definite benefits to the policyholder and the child but the difference lies in the tenure, the maturity period, as well as the benefits involved. Once you are sure of the benefits that you expect from your child plan, you can opt for either to secure your child's financial future.

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