Investing wisely can help you give wings to your children’s dreams

As a parent we want the best for our children. We want them to have a stable future and financial freedom that comes from a strong foundation in education. Our goal is to provide them the best education opportunities and help them reach their dreams. As a parent, you need to plan right and invest wisely to ensure that you can reach these goals smoothly. 

Why is it important to invest and plan for a child’s educational expenses?

Education is one of the most important gifts your child can receive, here are reasons why it is only wise to plan early on:

  • Increasing costs of quality education:

India has a large youth population attending school and colleges, and hence the competition to get into the best of institutions is stiff. The significance of education has improved but securing a seat is not an easy task. On average, the cost of higher secondary education in government schools is Rs 30,600 and private schools is Rs 3,96,000.

While government colleges are a good option as their fees are comparatively lower to private colleges, the seats are limited and seats in private institutions are expensive. The cost of graduation and post-graduation in government colleges is about Rs 5-6 lakh while in private colleges, it can be anywhere around Rs 8-10 lakh. Even six-month certifications offered by private institutions, which enable students to upskill, cost anywhere between Rs. 50,000 to Rs.2,00,000. It is safe to assume that the fees will increase three times the present costs after 20 years, with increasing inflation factored in. Apart from the fees, you have to take into consideration children’s accommodation, travel, books, food, etc. which can easily affect your savings.

  • The vicious debt circle: 

Taking an education loan seems like an easy option but will only add to your debts and liabilities, and will eventually increase the financial burden for the child. It adds to the pressure of looking for high paying jobs to pay off these loans and leaving the child little room to experiment with their careers. Also, education loans come with high rates of interest which may not allow your child to start investing and saving from the beginning of their careers. 

  • Investing goes a long way: 

Investing in the right instruments can go a long way. The premium paid today can guarantee a corpus tomorrow when the child is in actual need of money without the family bearing a huge financial burden. A good investment in a sound plan will ensure a consistent payout either at one go or in phases, meeting the child’s requirement at important milestones. For instance, if you start paying a premium of Rs 50,000 every year when the child is just 1 year old, by the time they turn 18, they will have a corpus of at least Rs 9 lakh at their disposal. 

  • A safety net for the child’s future: 

We live in uncertain times, and it’s best to be prepared for a scenario in which you may not be around to fulfill your child’s dreams. Investing in the right plan will act as a safety net for your child’s education plan. They can continue to pursue their education and meet their goals of launching their own business or even planning a big wedding for them, without worrying about the financial implications. 

  • Tax Benefits: 

With the right plan, you can also avail tax benefits on premiums paid for your child’s education plan under section 80C, 80CCC(1), 80D, 10 and 10D as applicable.

Smart Parent can make smart choices with HDFC life YoungStar UDAAN that can help secure your child’s future:

  • Determine your child’s goals: Choose a plan that guarantees payouts at your child’s key milestones, considers their needs like schooling, college, higher education, marriage or helps them with their own business set-up. You need to match these requirements with the right financial support in your child’s life. 
  • Maturity Payouts: HDFC Life YoungStar UDAAN comes with 3 options for maturity payouts that you can choose as per your requirement –

Death Benefits: The policy holder can be assured of death benefits in event of unfortunate circumstances with Sum Assured on death or 105% of all premiums paid + guaranteed additions and bonuses as applicable. Moreover, under the Classic Waiver Death Benefit of HDFC Life YoungStar UDAAN, future premiums are waived off and paid while the plan continues to participate in profits. 

  • Survival Benefits: The last instalment will be paid along with Maturity benefits. Policy holders have an option to receive the Survival Benefits in monthly instalments, except the final pay out. The monthly Survival Benefit are calculated at 8.5% of the annual money back pay out that is payable over a period of 12 months.  
  • Income Tax Benefits: Avail tax benefits on premiums paid under section 80C and claims received as per section 10(10D) of the Income Tax Act.

It isn’t enough to ensure that your child’s present is enjoyable with all material comforts. Choose a sound partner like HDFC Life YoungStar Udaan to plan, invest and align your child’s education and future needs resourcefully and lead a worry-free life! 

Sources

https://www.careratings.com/uploads/newsfiles/Household%20Social%20 Consumption%20on%20Education%20in%20India.pdf

https://economictimes.indiatimes.com/wealth/plan/are-you-planning-your-childs-dream-career-in-the-right-direction/articleshow/91103569.cms

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