Saving up enough for the day that the apple of their eyes goes to college is a goal that every parent prioritizes. However, saving is not enough. The key to having a corpus large enough to provide for the rising education cost is to invest mindfully with a view to build the corpus that might be required to put your children through the University of their choice.

There are many options that you can explore to choose the best avenue of building the corpus that your child will need in the future. A child plan basically has the components of investment and insurance. This is to make sure that while you are investing for your child's future, if some untoward incident like death occurs, it will not affect your child's financial stability with regards to education.

A child Plan can be any of the following options:

1. Child ULIP Plans:

A child ULIP Plan works like any other Unit Linked Insurance Plans where a lump sum is paid at maturity. These kinds of ULIPs invest in Equity and Debt securities. You as an investor can decide the ratio in which you want your equity and debt exposure. The tenure of a child ULIP is generally shorter so as to align the payout with your child's 18th birthday.

2. Child Insurance Plans

A child ULIP Plan works like any other Unit Linked Insurance Plans where a lump sum is paid at maturity. These kinds of ULIPs invest in Equity and Debt securities. You as an investor can decide the ratio in which you want your equity and debt exposure. The tenure of a child ULIP is generally shorter so as to align the payout with your child's 18th birthday.

The second is to offer protection to him in the unfortunate event of your death by making the sum available to him at the time of the event. There are two types of child insurance plans:

a. Endowment Plans: In this the child receives assured returns at the time of maturity.

b. Money Back Plans: In this plan there are regular payouts at intervals like 5, 10, 15 years etc, that the company gives to the child . This amount can be used to finance the tuition fees of the child or any other purpose. At the end of the policy term, there is also a lump sum given out which is the maturity value of the policy together with the profits accrued.

In both the types of insurance plans mentioned above, there is the component of insurance and investment built in. In an insurance plan there are few features that you must absolutely look for. They are

a. Premium waiver: Make sure that the plan you choose has a facility of premium waiver which means that during the tenure of premium payment, if the unfortunate event of death occurs then the insurance company will waive off the rest of the premiums and pay the accumulated maturity amount after the tenure of the insurance premium.

b. Partial withdrawal: Make sure that the plan you choose has a facility of premium waiver which means that during the tenure of premium payment, if the unfortunate event of death occurs then the insurance company will waive off the rest of the premiums and pay the accumulated maturity amount after the tenure of the insurance premium.

There is another option that you can explore and that is to invest into mutual funds for the long term horizon.

3. Mutual Fund SIP and SIP Top Up:

The systematic investment plan of investing into mutual funds is easy and convenient as you can start your investment as per your choice. If you have a long time horizon of 10 years or more, the returns from investment into mutual funds with an equity exposure can help you build a large corpus which you can use for your child's education. The beauty of this option is that you need not worry about missing out on premiums in case of an unfortunate event like job loss.

You can also choose SIP Top Ups that can increase your investment with every increment in earnings that you get. This will significantly increase the amount of returns you get after the tenure of your SIP.