Why to Use Child Plan Calculator?

The cost of a two-year MBA course in the Indian Institute of Management, Ahmedabad, has risen 400 percent since 2007 and if the same trend continues, it will reach a stupendous Rs. 95 lakhs, according to a report in the Economic Times. Can you imagine how much you would need to save if you wish to send your child to such reputed institutes? An approximate estimate for the amount of funds required by you to meet your child’s advanced education can be estimated using tools like a child plan calculator.

Need for Child Insurance Plans

Rising education costs and high aspirations of parents warrant the need to build a substantial kitty to fund the massive costs of education, co-curricular activities and other requirements. Add to this the cost of their marriages and the total amount required for your children’s welfare shoots up further. What to do in such a scenario? Invest in a variety of options like a child plan and make some investments that offer good growth.

The exact amount of funds that you will need and can invest now can be decided with the help of insurance tools like child plan calculator and retirement planning calculator (if you are looking for an investment for building a post retirement fund). Using these tools is very easy as all you need to provide is the current age of your child, the age at which you need the funds, your current savings, the type of education which you want your child to pursue, the expected tuition fee and the inflation rate. By using this information, the tool provides you with the amount of funds that you need to save. Now, you have a final target and can calculate the amount of monthly savings that you need to target.

Child insurance plans can be regular premium plans or single premium plans. In case of the former, annual premium payments need to be made until the child turns 18 and after that, the insurer pays back the amount in installments or in one go, depending on the terms of the policy. Such policies generally cover the life of the parent and in case the parent dies before maturity, the premiums are waived off but the sum assured is paid on maturity.

While some child plans are money back plans, others are unit linked policies, which invest in the market to create wealth for the policy holder. Most insurance companies offer varied options with different risk profiles to cater to the requirements of all types of investors.

Apart from offering life cover, several child plans come with options to add various types of riders, so that you can combine the goal of saving for your children with other aims like taking accident insurance or critical illness insurance.