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Life Insurance - Children Education Loan vs Education Insurance: Which is right for your child's future?

02 Sep 2024

Introduction: Providing quality education for children is a priority for parents in today's competitive world. However, the high costs of education can be a financial burden. Investment planners offer solutions like education loans and education insurance to help secure a child's future. But which option is better for your child? ?  

Pros of Education Loan: ? 

-Flexible Repayment Options: Offer moratorium period and flexible EMIs for easier finance management. ?  

-Tax Benefits: Avail tax benefits on interest paid under Section 80E of Income Tax Act. ? 

-No Collateral Required: Accessible for parents from diverse financial backgrounds without needing collateral.  

Cons of Education Loan: ? 

-Interest Rates: Higher compared to other loans. ? 

-Debt Burden: Can lead to significant debt burden affecting career and financial stability. ? 

Education Insurance :

Education Insurance is an investment plan helping parents save for their child's education, ensuring financial security and meeting education goals even during unforeseen circumstances. 

Pros:  

  1. Financial security for parents.? 
  1. Some plans offer guaranteed returns.? 
  1. Child insurance benefits include medical and other expenses coverage.? 

Cons:  

  1. Limited flexibility in withdrawals and investments. (but if you plan it properly you can overcome it) 
  1. Regular premium payments are required.? 

Education insurance is essential as it offers financial security to parents in case of death/disability, financial protection to children's education, and serves as a long-term investment for their future. So choose wisely and rest assured for lifetime 

Source: LIC India BACK