One of the best financial decisions parents can make is to invest in the future of their children. Since the cost of education is constantly on the rise, and it is important to give “wings” to kids’ ambitions from the very start, child investment plans are bound to play a crucial role. However, with multiple options available at present, finding the right child investment plan can be a rather challenging task. Therefore, this guide aims to provide parents with the key pointers to choosing the best child investment plans while making sure that the selected types will indeed cater to their family’s needs.
Understanding Child Investment Plans
Child investment plans are designed with the parents in mind to save money ‘systematically’ for their children when they grow up. It means your child’s future will be safeguarded no matter what happens, such as meeting a tragic death with the policy still operating in debt. Some of the reasons why a child investment plan is essential for you include:
- Goal-Oriented: The plans are structured in such a way that the savings grow over a period, and you get the lump sum when your child needs it the most.
- Flexible: You can select the tenure and the amount you want to invest through the plan as well as select from the variety of plans based on your goal.
- Protection: In case of the demise of the policyholder during the policy tenure, many child investment plans waive future contributions.
Key Features of the Best Investment Plan for Child
When looking for the best investment plan for child, you’ll notice that each plan comes with its own set of features. Here are a few factors to consider:
- Premium Waiver Benefit
This is a feature you’ll want in any child investment plan. In case of the unfortunate death of the policyholder, this benefit ensures that all future premiums are waived off, yet the plan continues. This guarantees that the child’s financial future remains intact.
- Tax Benefits
It’s always wise to take advantage of tax savings. Under Section 80C of the Income Tax Act, premiums paid towards child investment plans qualify for tax deductions, helping you save on taxes while securing your child’s future.
Types of Child Investment Plans
To help you make an informed choice, here’s a breakdown of some popular types of child investment plans:
- Traditional Child Plans
These are more conservative and secure, offering guaranteed payouts at predefined intervals. They are an ideal choice for risk-averse parents who prefer steady returns without exposure to the stock market.
- ULIP-Based Child Plans
ULIP plans to invest in a mix of equity and debt instruments, offering a chance for higher returns. This type of child investment plan is suitable for parents who are comfortable with market fluctuations and looking for potential wealth creation over the long term.
- Savings-Based Child Plans
These plans are designed purely for accumulating savings, which are disbursed when the policy matures. They offer simple but effective savings for your child’s future needs.
The Benefits of Investing Early in Child Investment Plans
There are several advantages associated with investing early in a child investment plan. These include the following:
- Longer Investment Period: The sooner you start investing, the longer the amount invested can grow, which means you are likely to get much more returns in the future.
- Lower Premiums: When you start early, the premiums are lower, so it is more affordable. Unlike when you start late, the benefits of the investments may not have any impact on your child.
- Compound Growth Benefits: When you invest early you have more benefits from the compound interest that helps you get more corpus for your child in the future.
Securing Your Child’s Future with the Right Investment Plan
Choosing the right child investment plan is crucial for supporting your child’s dreams and ambitions. You need to make sure that you invest your capital wisely to be guaranteed a sufficient level of comfort in the future. In addition, family-oriented investors are responsible for investing in such a way as to provide their children with a certain level of support. An effective plan allows allocating your financial assets optimally and gaining peace of mind.
If you are in search of trusted and flexible child investment plans, you may consider associate plans from insurance providers like Canara HSBC Life Insurance. They offer a wide range of child-based investment plans that can give surety of a secure future for your child.
Start today and build the foundation for a secure future with the best child investment plan!
