Education is the foundation for a child’s bright future. It prepares them to face the challenges in life. Growing up, kids tend to learn and adapt themselves to the new rules of this fast-paced world. In this process, only a few things remain constant and education is one of them.
Most often, even before a parent has welcomed their child into the world, they have thought about the cost of their child’s education and how to fund it. A strong financial plan is crucial to achieving this goal. Early investment is important since it prepares you for an unforeseen event. Here are a few tips that should help you devise a better plan for your child’s education.
- Invest in ULIPs: A unit linked insurance plan (ULIP) is a great investment if you’re planning for a long-term goal like your child’s education. You can choose a policy with a single premium and free asset allocation. The ULIP returns you receive should be enough to fund your child’s ambitions and aspirations.
- Understand how much time you have: This can be calculated by counting the number of years left for your child to graduate. Typically speaking, if you have enough time, then you can compare and invest in a policy that meets all your requirements.
- Approximate the cost of education: You should consider a few factors that affect your expenses before you put a figure on it. Firstly, whether your child wants to study abroad or in a college near home? Then comes selecting a good college from the ones available in India or abroad and the course of study. Once you have an answer to these questions, prepare a chart of the costs. You can get an idea of it online.
- Calculate your existing assets and liabilities: Once your plan is ready, it’s a good idea to check where you stand currently. List down all your assets and liabilities and make a note of your current investments and how the returns from them will add to your future income. Keep your child’s education plan separate from your savings for retirement.
- Get insurance and prepare for the unexpected: A sudden death or medical emergency can ruin your child’s education plan. Ensure that you have a life cover and health insurance that could help cover your child’s tuition fees if something were to happen to you.
Not just high returns, tax benefit is also another reason why you should consider investing in ULIPs. Education is imperative to secure your child’s future and only a sensible approach towards it can fulfil their desires and ambitions.