Personality development is not just important for adults, it’s as critical for children, maybe more so. A sense of character at a young age harbours a similar streak in adulthood. Conversely undesirable personality traits in childhood are extremely difficult to reverse after the formative period.
How to choose the best child education plan?
There are a large number of child insurance plans in the market, so parents do not have it easy when it comes to selecting the best child education plan.
Selecting an ideal child education plan is critical for the long term development of the child’s future. Given the competition for degrees and the spiraling cost of education, there is pressure on both parents and children when it comes to higher education – pressure on children to perform and on parents to provide adequate finances for the degree.
- Invest in plans that offer premium waiver benefit
Most child plans offer premium waiver benefit – either as an option or as an essential feature of the primary plan. The premium waiver is particularly important as in case of the death of the parent, the insurer waives off future premiums while continuing to fund the life insurance policy till maturity. This makes sure that the maturity benefit that was set for a certain age remains intact as planned, in addition to the death benefit paid.
- If you have the risk appetite then go for equity-linked plans
Ifyou have appetite for equities and a considerable investment time frame (at least ten years), you can consider opting for unit-linked child plans. It is established that over longer time frames equities give the best returns and parents must make the most of the opportunity. Ideally, the child plan must offer a balanced mix of growth and debt funds along with risk cover. Also, choose a child insurance plan that has the system transfer option to make sure your gains in the investment are protected.
If you do not have the risk appetite, go for simple endowment plans
If you have a lower appetite for market uncertainties and have an investment time frame of less than ten years, then equity-linked plans are not for you. Go for endowment plans instead. Although you won’t accumulate as much vis-a-visa child ULIP plan, but you will be adequately covered against market uncertainties.