4 Reasons to Buy Savings Plan for your Child’s Future

Four Reasons to Buy Child Saving Plans

Planning for smart investment of money is important to secure your children's future and help them fulfil their dreams. Here are some of the reasons why every parent must consider investing in their children's future.

1. Financial support to your child's dynamic goals- Educating a child could probably cost you to drain your life savings if your financial plans are not well organized. Including the fact that your child's goals may change from time to time creates more financial pressure on the parents. It's better to manage your savings beforehand.
   

   Child savings plans are the best way to invest in a child's future as these plans are designed to tackle uncertainty and provide financial support to the education/career choices that your child desires. Further, these plans allow you to accumulate a certain amount with additional benefits over a period that can be utilized for your child's growing educational needs.

   Child saving plans offer investment in instalments, and a lump sum amount is granted when the plan matures upon your child reaching a prescribed age which is to be mentioned in the child investment plan.

2. Partial withdrawal facility- Most child plans have the facility of partial withdrawals that helps to meet the short to medium-term financial requirements. Especially when your child is on the verge of reaching certain key milestones like completion of high school, admission into a college, or competitive entrance exams.
   

   Investing in a child savings plan can reduce your financial burden while satisfying your child's educational needs. In addition, such facilities have periodic payouts in the form of a fixed proportion of sum assured.

Here are 3 critical pillars for a secure future of your child.

3. Life insurance cover to handle uncertainty- A child plan acts as an investment for children's future which helps to ward off the uncertainty by continuing with the coverage until the policy's maturity.
   

   It acts as a support system to fulfil the child's needs as planned in the event of a parent's demise. Besides, the premiums for the remaining policy period also get waived off in the absence of the parents.

4. Avail Tax Benefits- While saving for children's future you get eligible for tax benefits. The insured parent can claim tax exemption on premiums paid in child investment plans for up to ₹1.5 Lakhs annually as per section 80C of the Indian Income Tax Act, 1961. Also, under section 10(10D) of the Income Tax, the maturity amount is non-taxable.

Life Insurance Plans for your Children

You might get confused about investment for your children's future requirements. Select a suitable investment plan, depending on the kind of corpus you want to build and the number of instalments you can commit regularly.

Fixed deposits provide ready finances after your child becomes an adult. Fixed deposits are designed for long term needs by focusing the savings on educational purposes only. Even an educational plan can act as the best investment plan for a child's future if you desire to save specifically towards their education.

1. Term insurance plan- A term insurance plan can act as a safe insurance policy to secure children's future even in the absence of parents. In term insurance plans, during the unfortunate demise of the parent, the child receives a lump sum amount to support their future expenses like education costs and more.
2. Savings Plans- The best investment plan for a child's future is an insurance policy that offers life insurance along with a savings plan. Canara HSBC Life Insurance offers various insurance saving plans with secured benefits such as:
3. ULIP- A unit linked individual life insurance savings plan can be customized as per your goals and changing requirements. It is a flexible plan that gives you complete control over your savings. Investing in ULIPs would allow you to secure your child's financial future as it also provides you with a life insurance cover in case of your unfortunate demise. Check out the Promise4Growth Plus for investment in ULIP to secure your child's future. The P4G Plus offers benefits like loyalty additions, return of mortality charges, wealth boosters, etc.
   

   Start early and regular savings since time and consistency are important to secure your child's future. Always try to deposit small amounts whenever possible. While choosing to save money, look for added benefits in a life insurance plan at no extra cost. Decided amount to save must be comfortable within your budget. Choosing a child savings plan can most certainly support your child's ambitions and dreams by taking care of their educational expenses. It also allows you to plan sufficiently on wealth accumulation for your retirement simultaneously securing your children's future.