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Thread: Help regarding Child Education Plan?

  1. #1
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    Default Help regarding Child Education Plan?

    I was planning to invest in a child education plan but i am not clear as to how should i go about it.
    Which is a better option in India. ALso what are the various process involved in getting a child plan.

    Please explain as i need to take it for my child who is almost 6 years.

    thanks



  2. #2
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    Quote Originally Posted by sunnysing78 View Post
    I was planning to invest in a child education plan but i am not clear as to how should i go about it.
    Which is a better option in India. ALso what are the various process involved in getting a child plan.

    Please explain as i need to take it for my child who is almost 6 years.

    thanks
    You should also get this type of education plan from your insurance agent also but for that you must have to first choose your insurance company. Why should you not try to get this type of information from the Internet by just typing children education plan in any search engine and you should get many of the sites related to this type of insurance plan.

  3. #3
    Senior Member Level 2 Norwayguy's Avatar
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    Quote Originally Posted by sunnysing78 View Post
    I was planning to invest in a child education plan but i am not clear as to how should i go about it.
    Which is a better option in India. ALso what are the various process involved in getting a child plan.

    Please explain as i need to take it for my child who is almost 6 years.

    thanks
    Unfortunatly I am unfamiliar with plans for India, but for those people wondering what they might want to do here in the USA. You would have a bunch of options for saving money for your childs education:

    Coverdell Educational Savings account - used to be called Educational IRA allows an individual to save $2000 per year into a tax deffered account which can be funded with many vehicles the most popular being mutual funds. How does it work the money in the account grows tax deffered until withdrawn and then if withdrawn for qualified education expenses would come out tax free. This accound can be used to college costs but also for private elementary and high schools

    529 Plans - These are programs run by most states there are too types of plans pre-paid tution plans that require you to pick the college you will attend and are able to purchase tution at a discount early...This option is not the most common. The other option is similar to the Coverdall ESA in that money grow tax deffered in these accounts they are primarily funded with mutual fund clones and as long as the money is withdrawn for qualified post secondary education the money comes of tax free. So this account can only be used for college costs.

    ** Please not the Coverdall ESA and 529 programs tax gains with current income taxes plus a 10% penalty tax if the withdrawals are not used for Qualified Educational costs.

    UTMA/UGMA Accounts - Which account you can use is dependent on your state. These accounts are not specific for educational cost but are a transfer of assets from one person say and adult to a child the child gets control of the account at 18 or 21 dependent on which account. The benefit of these accounts is the tax treatment the majority of the gains are taxed at the childs rate. They can be funded with pretty much any type of vehicle.

    Parental Investment Accounts - Investment accounts in the parents name. Can be funded with any type of vehicle. No special tax benefits and these accounts can be used for any purpose educational or not.

    *** These accounts also are treated in different manners when it comes to FAFSA the Federal financial aid process. Also I am a strong proponent of Life Insurance on the parents before any educational investing is started in case something happens to a parent the program would be self completing.
    Peter G Langelier
    plangelier@langelierinsurance.com www.langelierinsurance.com
    Licensed Resident Agent Maine Life/Health & Variable Contracts

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    For parents, one of the most important decisions is their child education. Planning a child’s education could be a challenge. As, you have mention that your child is small right now, so you can start your child education planning now. Because, if you start planning now then at the time your child reach young age you should have enough money for your child education. For more information you can refer articles and videos available at Big Decisions.

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