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How to use an online savings plan to secure your child's education fund?

dateKnowledge Centre Team dateFebruary 16, 2021 views149 Views
How to use an online savings plan to secure your child's education fund?

Everyone wishes to give good education and a decent life to their children. However, the mounting education costs have made the importance of financial planning clear. An official survey shows how the cost of education has risen from ₹335 per month for secondary school to ₹576 for higher secondary per student in the last few years.

The best saving plan for kids offered by Canara HSBC Oriental Bank of Commerce Life Insurance eases the stress of planning your child's future by providing a lump-sum payout on the investment.

Therefore, it is smart to invest in the best saving scheme and secure your child's future. Investment in a child insurance plan, as soon as possible in life, can help you gather significant sums to cover the soaring education expenses today. It is vital to choose the best savings policies for your child only after thorough understanding and research.

Choose the best savings plans to build your child's educational fund

  • Take a high sum assured policy

    While choosing an online savings plan for your child's education, you must opt for an insurance policy, in which the amount assured is ten times your current gross income. Moreover, you must select a plan where the returns are enough to beat inflation. Canara HSBC Oriental Bank of Commerce Life Insurance offers a guaranteed sum, along with additional final bonuses upon the policy's maturity.

  • Look for additional benefits

    Most savings plans come with additional charges over the premium amount, which unnecessarily increases the cost. However, Invest 4G by Canara HSBC Oriental Bank of Commerce Life Insurance has low administrative charges that make it an all-rounder. The savings policies give benefits like wealth boosters and loyalty additions, which reduces the final cost of the policy.

  • Select a plan that offers premium waiver benefits

    It is necessary to ask an insurance company if their child insurance policy has a waiver feature or not. Most companies waive off the leftover premium in case if the parent dies within a specific time limit. In such cases, the sum assured is paid to the beneficiary. If you opt for a policy like that, you can obtain an ample amount for your child's education if any tragedy happens.

  • Take advantage of the partial withdrawal feature

    Different child insurance policies offer distinct features. Therefore, when selecting the best saving scheme for your child's education, opt for an insurance policy that allows partial withdrawal of funds. In this type of plan, parents are allowed to partially withdraw the fund value from savings plans to meet emergency needs. With the Canara HSBC Oriental Bank of Commerce Life Insurance's Guaranteed Money Saving Plan, you can opt for life insurance with savings plans. And, you can pay the premiums only for a limited time too.

  • Research about the policy term and premium amount

    Selecting an insurance policy that matches your requirement is necessary. Therefore, you can select the duration of a policy based on the education timelines of your children. For example, if your kid is 10-11years old and you want to secure a sum for their college education, you can opt for a policy term that is 5 or 7 years to ensure you have enough funds at your disposal.

  • Opt for additional riders

    Most insurance companies allow you to modify your child insurance policy by opting for add-on riders like critical illness rider benefits, accidental death and disability benefit, waiver of premium, etc. You can select a suitable one to improve your online savings policy.

Now, to secure your child's education expenses accurately, having a sound investment strategy is extremely valuable. You can plan to diversify your investment across various financial instruments. Doing so will ensure that, even if you don't get the returns you expect from some of your investments, others will give you the ROI you anticipate. In this way, you can reduce risk by investing in a safer option when you plan your long term investment strategies.

So what is a better solution for you?

You can invest in a child insurance policy and remain stress-free for years to come

Types of online savings plans for your children

Here are some of the best saving policy plans for your children's educational dreams.

  • Equity-linked insurance plans

    First of all, Unit Linked Insurance Plans (ULIPs) uses a part of your premiums to provide an insurance cover, and the remaining goes in market-linked securities like equities. These plans are the best plan for your child's education if you have a period of ten years. Invest 4G is the best among the Canara HSBC Oriental Bank of Commerce Life Insurance's ULIP options. The best thing is, you can customize as per your goals and requirements. The minimum entry age is 0 & the maturity time is 18 years. Plus, the maximum entry age is 65, and maturity is 85 years for this policy.

  • Traditional child endowment plans

    In case you are interested in a shorter insurance period than ten years and have a low-risk appetite, then the best to opt for an endowment insurance policy. These policies allow you to build up your savings over time and then acquire a lump sum at the policy's maturity. However, these plans don't offer high financial returns, unlike ULIP, but you will still have sufficient insurance for your child's future.

    Today, a strong educational background is critical to your child's secure future. With proper education, they can find new opportunities and become successful. However, tuition fees & education costs are only going to rise. While the average per capita income in India is Rs 10,500 per month, an average amount of Rs 63,280 per year is required for an engineering student. The amount is humongous.

    This is the reason why preparing for these expenses now can help you manage the costs of securing a bright future. Besides, opting for a child insurance plan can also provide much-needed benefits. You can consider Canara HSBC Oriental Bank of Commerce Life Insurance's savings plans for a child and financially stabilize your child's educational fund. Take a look at the benefits you will get from the best saving policy.

Advantages of child savings plan

  • A handsome amount for future education

    Best online savings plans like Invest 4G help you secure money for your child's education. The lump-sum amount of the policy that you get covers the future education expenses without any financial burden. On maturity & if the premiums are paid on time, you will receive the Fund Value based on the prevailing NAVs. You can choose to take the Fund Value on maturity in periodic installments (based on Settlement Options) as well.

  • An emergency fund for your child

    The best child plan will allow you to withdraw funds from time-to-time. In need, you can use this money to cover any unexpected or emergency expenses of your child like an accident, medical treatment, disability, etc.

  • Financial aid in your absence

    Child online savings plan that waives the premium amount left in case of your death before the policy maturity is the best. Now, this ensures that your child has adequate financial help and does not suffer any financial distress when you are gone.

  • Tax benefits

    According to the Income Tax Act of 1961, the person under Section 80C and Section 10 (10D) gets the tax benefits. However, the benefits may change as the Income Tax Act is amended from time to time.

Now that you know the advantages, what more can you do as a parent?

Choose child insurance plans that work

Life insurance schemes can help meet your child's educational needs, which may be impossible to cover in the absence of insurance. It is estimated that an engineering course that costs around Rs 6 lakh now will cost around Rs 15 lakh after a few years. Therefore, take a look at the policies you can invest in.

  • Invest in Smart Future Plans, which provides a long-term investment opportunity. With Sum Assured on death or disability, this policy guarantees that your plan for your family remains unaffected, even after any unfortunate event.
  • You can also opt for the Future Smart Plan, which provides a long-term investment opportunity as well.

Start by insuring yourself now!

No matter how you are trying to make your financial strategies work, insuring yourself against life's uncertainties is vital. Canara HSBC Oriental Bank of Commerce Life Insurance policies acts as the second roof for your dependents.

To conclude, if you start investing in reliable insurance plans when your child is still a toddler, you won't be worried if you are expecting a hefty expense when your kid is old enough to go to college. Taking small steps now can help you to help your children achieve their dreams in life.

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Frequently Asked Questions

What is saving plan?

A savings plan is likely to be different for everyone depending on the financial goal, risk profile, returns, and investment horizon. If you are young and want to save for your retirement, ULIPs like Invest 4G or Titanium Plus plan would be the best option. You are likely to create a large corpus by your retirement through market-linked returns if you invest in this savings plan. If capital protection is your aim, then traditional insurance plans such as Guaranteed Money Saving Plan should be suitable for you.

Who should invest in a Savings Plan?

If you are looking for a guaranteed income plan, then saving plans should be on your list of investments that you are planning to make. Savings plan require you to invest a pre-decided amount on a regular basis. People with a regular stream of income who require a lump-sum amount after a period should opt for a savings plan. Working professionals, self-employed people and businessmen should consider a savings plan to meet their long-term financial obligations. Saving plans are also ideal for people who are risk-averse and want to accumulate funds through relatively safer mediums. These saving plans inculcate financial discipline in policyholders which make them crucial for every portfolio.

How much money should you put in savings each month?

The amount that should be invested in a savings plan each month depends on the income, existing financial obligations and the long-term financial goal. If you have a steady income, you should save at least 20% of your monthly income. It is not necessary to invest your entire money into a savings scheme as investments should be diversified. Ideally, you should aim to have a financial buffer of over 10 times of your annual income. Choose an income plan based on your financial circumstances to stay afloat.

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What is the difference between saving and investing?

Saving is the money that you keep aside for emergencies or for buying any big-ticket item. Investing means growing or multiplying the wealth that you have by buying savings plan, or any other assets. Buying a savings plan will help you in achieving your investment goals such as retirement, your child’s higher education or marriage, or for buying a new house.

Which savings plan is best for retirement?

The Invest 4G plan with its multiple investment options and various portfolio management strategies for capital protection is an ideal saving plan for retirement. Also, Guaranteed Income4Life is also another savings plan that you can consider for building your retirement corpus as it acts as a guaranteed income plan that will provide you maturity benefits to manage your post-retirement expenses.

Which savings plan is best for long-term goals?

Smart Goals Plan is a savings plan with its unique features such as modification of the sum assured partial withdrawal and fund switch can help you plan for your long-term financial goals. Canara HSBC Oriental Bank of Commerce Life Insurance offers a wide variety of saving plans that you can invest in as per your risk appetite and investment goal.

Which savings plan is suitable for girl child?

The Future Smart unit-linked plan from Canara HSBC Oriental Bank of Commerce Life Insurance is the ideal savings plan for the girl child. Monthly Income Advantage Plans are also a good option if you are planning to invest in a savings plan for your girl child.

Where should I invest my money?

You should spread your investments across financial instruments. However, having the best savings cum guaranteed income plan in your portfolio is extremely important. Savings plan ensures financial stability and also helps in fulfilling short, medium and long-term monetary goals.

What is a monthly income advantage plan?

A monthly income advantage plan ensures that you lead a stress-free life with your loved ones as it provides a life cover along with giving you guaranteed monthly income. In short, it is a life insurance and income plan that will financially secure commitments made to your loved ones. Canara HSBC Oriental Bank of Commerce Life Insurance Guaranteed Income Advantage Plan is a monthly income advantage plan that provides life cover for the entire term while you pay premium only for a limited period.

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What is a good age to start saving money?

When you plan to invest in a financial product, it always pays well to start early. The earlier you start saving and investing, the better. When you start investing early, the capital gets adequate time multiply. Even a small amount invested for a long time can give substantial returns due to compounding in a savings plan. Invest in an income plan as early as possible to build a significant corpus that will later help you in life. Ensure that you buy the best saving plan in India that can be aligned with your investment goals.

Should you use a savings plan for retirement planning?

Yes. Retirement planning is one of the most important financial decisions of our lives. The best saving plan offers a host of features that may help you build your retirement corpus. Some of the saving plans like Guaranteed Income4Life offer guaranteed returns at policy maturity. Such returns can act as a regular income stream even after your retirement to help you stay financially stable.

Are saving plans beneficial for managing unexpected expenses?

Yes. Best saving plans in India offer partial withdrawal system that can be utilized during your rainy days. Being financially prepared to tackle such odds will help you manage any unforeseen expenses in a smooth manner. Buy a monthly income advantage plan that will generate a steady source of income for you to take care of both long-term and short-term financial goals.

How to save tax by using savings plan?

Saving plans are known for helping us achieve our financial goals. Best saving plans allow you to grow your wealth while providing life cover. Saving and investment plans are also beneficial for tax planning. Premiums of savings cum protection plans come with tax benefit under Section 80C of the Income Tax Act. Moreover, proceeds received upon the death of the policyholder or upon the maturity of the policy are tax free under Section 10 10(D).

What is the right age to start saving money?

When you plan to invest in an income plan, it always pays well to start early. The earlier you start investing in a savings plan, the better. When you start investing early, the appreciation in capital is significant. Even a small amount invested in the best saving scheme for a long time can give substantial returns due to compounding. Buy the best savings plan as soon as you start earning to achieve all your milestones on time.

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How a savings plan can help in building your child’s education fund?

Saving plans help in building wealth over time against the investments that you make. Buy the best savings plan to build an education fund for your child. The best saving plan for kids offered by Canara HSBC Oriental Bank of Commerce Life Insurance eases the stress of planning your child's future by providing a lump-sum payout on the investment. Consider investing in a monthly income advantage plan to assist you in fulfilling your financial goals.

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How Savings Plans by Canara HSBC Oriental Bank of Commerce Life Insurance can help you?

Every person has a unique reason to save and invest. With ULIP savings schemes, the company caters to people seeking wealth creation through capital appreciation. Contrarily, the traditional plans can help you save for important life goals without worrying about the fluctuation in fund value. All major savings plan offers partial withdrawal facility that can help you take care of unplanned contingencies. With savings plans from Canara HSBC Oriental Bank of Commerce Life Insurance, you get adequate flexibility while investing and receiving the savings benefits, which makes them a good investment choice for investors looking for income plans.

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