Wealth Guide: Early planning is key for building your child’s secure future

Good education is the best gift you can give your child as a parent. It will ensure a bright future for your child as well as open the doors for good career opportunities.

However, rising inflation in education can throw a spanner in your plans. Hence, it is important to plan and invest early.

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Abhishek Misra, CEO & Principal officer, Bonanza Insurance Broker Pvt Ltd highlights top reasons why one should start planning and investing for your child’s future now:

 To build a huge corpus

 The cost of professional education has been rising significantly over the last few decades. While medical education in private medical colleges can cost anywhere between Rs 25 lakhs to Rs 1 crore today, the fees for MBA courses can vary in the range of Rs 5 lakhs to Rs 25 lakhs or even higher.

Similarly, the yearly fees for engineering courses may set you back by Rs 1 lakhs to Rs 3 lakhs or more depending on the institution chosen. Over the next 15-20 years these costs are likely to increase further by 50-100% or more.

By investing a small amount on a regular basis, you can easily build a huge corpus as the time horizon for investment is long.

 Can avoid the unnecessary burden of loans or selling assets

If you have the corpus to fund your child’s higher education, you can avoid the unnecessary burden of loans at high interest rates. Many parents even resort to mortgaging or selling off their properties to fund their child’s dream education.

While there are many options available to raise funds, one should not forget that there are additional costs associated too in the form of interest or distress sale of properties in some cases. All these can be easily avoided by planning early and investing on a regular basis.

Child’s higher education is an unavoidable goal

As a parent, one should never postpone or compromise on a good education for your child due to lack of adequate funds as it will severely affect the child’s career.

At the same time unfortunate situations like demise of the parent may result in financial disruptions hampering the child’s education plans. Such situations can be avoided by investing in a child insurance plan.

It will make sure that the child’s education is not affected even if something happens to the parent. The inbuilt Premium Waiver Benefit (PWB) in a child insurance plan ensures that policy benefits remain in force, in case of untimely demise of the parent. At the same time the premium liability stops.

Bottom line

It is said that “Knowledge is the only treasure which lasts forever”. By planning early and investing on a regular basis, you can easily create a huge corpus to fund your child’s dream education.

However, it is important to choose your investments wisely. You can choose a mix of different instruments but should also invest in a child insurance plan as it is the only investment which can take care of your child’s future under adverse circumstances.

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)