Child Education Plan in India for NRI

Child Education Plan in India is a strategic financial solution for Non-Resident Indians (NRIs). This unique plan aims to secure the educational future of your child by merging the benefits of both the insurance and investment plans. This plan ensures that NRI parents can systematically build a corpus for their child's education while safeguarding against unforeseen situations.

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What is a Child Education Plan in India for NRI?

Non Resident Indians (NRIs) in Singapore can invest in their child's future wisely with the best investment option Child Education ULIP Plan in India. This investment plan ensures both financial security and investment growth for your child's education. 

A child education plan is a unique combination of insurance and investment, that provides life cover and an opportunity to grow your savings. 

As an NRI, you can contribute to this plan over a period through:

  • Monthly

  • Half-yearly

  • Yearly

  • Single-pay premiums

At the end of the policy term, you receive a lump-sum amount as a maturity benefit, forming a robust corpus for your child's educational needs.

In the unfortunate event of the policyholder's demise, the child plan extends triple benefits:

  • Life cover amount is disbursed to the family

  • Remaining premiums are covered by the insurer

  • Additionally, the child receives flexible payouts at crucial milestones of their life to cover expenses

This ensures the financial stability of your family and your child’s future even in your absence. This amount can be utilized for educational expenses like tuition fees, books, uniforms, and more.

This financial tool empowers NRIs to strategically plan for their child's education, combining long-term savings with essential life insurance benefits. 

You can choose from various child education investment plans, and let the returns grow based on market performance. 

Best Child Education Plans in India for NRI in 2024

Plans Entry Age Maximum Maturity Age Minimum Investment Amount (annually) Minimum Sum assured
TATA AIA Fortune Pro- WOP 18-59 years 75 years Rs 12,000/- -
TATA AIA Fortune Pro 18-59 years 40 years  Rs 12,000/-
  • For Single Pay – 1.25 x Single Premium
  • For Regular / Limited Pay – 7 * AP
Max Life Online Savings Plan- Child Plan 18-54 years 85 years Rs 12,000/- Rs. 1,20,000
Bajaj Allianz Smart Wealth Goal- Child Wealth 18-60 years 85 years Rs 48,000/- 10 x Annualized Premium
ICICI IPru Smart Kid Plan 18-65 years 64 years Rs 25,000/-
  • Minimum Sum Assured (Single Pay) -1.25 x Single Premium
  • Minimum Sum Assured (Regular Pay)- 7 x Annual Premium
TATA AIA
Capital Guarantee Solution
18-50 years 75 years Rs. 51,000/-
  • Minimum Sum Assured (Single Pay) -1.25 x Single Premium
  • Minimum Sum Assured (Regular Pay)- Higher of (10*AP OR (0.5*Policy Term*AP)
Max Life Capital Guarantee Solution 18-50 years 85 years Rs. 37,200 Rs. 1,20,000
BAJAJ Allianz Capital Guarantee Solution 18-55 years 65 years Rs. 20,000 Rs. 30,000
Aditya Birla Capital Guarantee Solution 0-58 years 85 years Rs. 38,400
  • Minimum Sum Assured (Single Pay)- Rs.100,000
    Minimum Sum Assured (5 Pay)- Rs.20,000
  • Minimum Sum Assured (6-12 Pay)- Rs.30,000
HDFC Life Capital Guarantee Solution 18-50 years 85 years Rs. 12,000 1.25 x Single Premium
PNB MetLife Capital Guarantee Solution 18-60 years 80 years Rs. 51,000
  • Minimum Sum Assured (Single Pay)- Rs. 100,000
    Minimum Sum Assured (5 Pay): 12,000
  • Minimum Sum Assured (Regular Pay & 10 Pay): 12,000
Kotak Life Capital Guarantee Solution 18-50 years 99 years Rs. 21,000 10 x Annualized Premium
Edelweiss Tokio Wealth Secure Plus- Child 18-40 years 100 years Rs 24,000/- 7 x Annualized Premium

Why an NRI Should Buy a Child Education Plan? 

In case of the policyholder’s untimely death, child plans provide triple benefits for complete protection.

  • Tax Benefits: NRI can enjoy tax benefits under Section 80C and Section 10(10D) of the Income Tax Act by investing in a Child Education Plan.

  • Wealth Creation: Child investment plans offer the potential for wealth creation over the long term. This helps in funding your child's education expenses.

  • Market-Linked Returns: NRI investors benefit from market-linked returns, allowing them to capitalize on market growth for higher potential gains.

  • Insurance Coverage: Child education insurance plans provide life insurance coverage. This ensures financial protection for the child's education fund in the event of the investor's demise.

  • Flexible Investment Options: NRI investors can choose from a variety of investment options based on risk appetite and financial goals. This provides flexibility in wealth management.

  • Inflation Protection: Child Education Plans come with features that help protect against inflation, ensuring that the money invested today retains its value and covers the rising costs of education in the future.

  • Peace of Mind: By securing a Child Education Plan, NRIs in Singapore can have peace of mind knowing that their child's education expenses are well-planned and financially taken care of.

  • Systematic Planning: Child Education Plans in India facilitate systematic planning, helping NRIs build a disciplined approach towards accumulating funds for their child's education.

  • Currency Diversification: Investing in the best child education plan in India allows NRIs to diversify their investment portfolio, mitigating risks associated with currency fluctuations.

  • Financial Discipline: Regular premium payments bring financial discipline, ensuring a consistent investment approach towards securing a child's education.

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Benefits of Child Education Plan in India for NRI

  1. Maturity Benefit

    • Flexible payout options upon policy maturity: lump sum or periodic payments.

    • Choose from annual, semi-annual, quarterly, or monthly disbursements.

    • Payment flexibility extends over 1 to 5 years post-maturity.

  2. Tax Benefit

    • Avail tax benefits under Section 80(C).

    • No taxation on returns under Section 10 (10D)^.

  3. Death Benefit

    • Life covers payout for immediate needs in case of a parent's demise.

  4. Waiver of Premium Benefit

    • Insurer covers future premiums upon the death of the policyholder.

  5. Loyalty Benefit

    • Purchase a policy with an extended period for additional benefits.

    • Company contributions: 0.5% loyalty bonuses from the end of the sixth policy year.

    • 3.25% wealth boosters from the end of the tenth policy year.

Key Features of a Child Education Plan in India for NRI

The key features of investing in a child investment plan in India for NRI are mentioned in the following table:

Key Features Child Education Plan for NRI in India
1. Investment & Insurance Combines investment and life insurance in a single plan.
2. Market-Linked Returns Offers returns based on market performance, providing potential for higher growth.
3. Flexible Premiums Allow NRIs to choose premium amounts based on financial capacity.
4. Lock-in Period Typically has a lock-in period, ensuring a disciplined approach to long-term savings.
5. Goal-Specific Tailored for funding a child's education, aligning with specific financial goals.
6. Tax Benefits Eligible for tax benefits under Section 80C and 10(10D) of the Income Tax Act.
7. Fund Options Offers a range of fund options to suit risk appetite and investment preferences.
8. Partial Withdrawals Permits partial withdrawals in case of financial emergencies or specific needs.
9. Currency Options Some plans allow investments in foreign currency, catering to the NRI audience.
10. Nomination Facility Provides the option to nominate beneficiaries for seamless claim settlement.
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Invest ₹8K/Month YOU GET ₹80 Lakhs* For Your Child View Plans
Invest ₹5K/Month YOU GET ₹50 Lakhs* For Your Child View Plans
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Tax Benefits on Child Education Plan

Sections of the Income Tax Act, 1961 Tax Benefits under Child Education Plan 
Section 80C
  • Premiums paid for your policy are eligible for tax benefits.
  • The premium paid under the child plan, up to an amount of Rs. 1.5 lakhs, is tax deductible.  
Section 10(10D)
  • Get Tax-free maturity from your child plan with an annual premium of up to  Rs.2.5 lakhs.
  • Maturity benefits received at the end of the term or in case of your death are tax-free.

Types of Child Education Plans

  1. Child Unit Linked Life Insurance Plans (ULIPs):

    • Education Funding: ULIPs help create funds for your child's education, whether they aspire to study at prestigious national institutions or renowned foreign universities.

    • Market-Linked Growth: With market-linked features, these plans allow your investment to grow in line with market performance, potentially providing higher returns.

  2. Capital Guarantee Solutions:

    • Secure Investment: Ideal for risk-averse parents, these solutions guarantee the protection of your initial invested capital, ensuring it remains intact despite market fluctuations or economic uncertainties.

    • Stability: Regardless of how the financial markets perform, the principal amount invested for your child's future remains safeguarded, offering stability in your investment.

  3. Guaranteed Return Plan (Traditional Plan):

    • Certainty in Returns: Traditional plans provide guaranteed returns on investment, offering a predetermined rate of return throughout the policy term.

    • Secure Accumulation: These plans offer a secure way to accumulate funds for your child's education or other important milestones, allowing you to plan with certainty about the exact amount you will receive at maturity.

    • Insurance Coverage: In addition to guaranteed returns, traditional plans also provide insurance coverage for your child's future, adding an extra layer of financial security.

How Does a Child Education Plan Work?

Let us understand this with the help of an example: 

Mr Sharma, a 40-year-old professional, invests in a child plan for his daughter’s higher education. He can choose to pay the premium in a lump sum, annually, half-yearly, or monthly. Now, consider the following figures for calculation:

  • Investment Amount (Monthly)=Rs. 10,000

  • Investment Duration=10 years

  • Current Age of the Child=10 years

  • Withdrawal After 20 years

  • Rate of Return=19.93%*

In case of outliving the policy term: The maturity amount that Mr. Sharma will receive is Rs. 1.72 Cr*. 

The amount can be used for the child’s higher education, considering that the inflation rate is approximately 6%.

  • Death Benefit = Life Cover for Daughter** 

  • (In case of Mr. Sharma’s death in the 7th policy year

  • Additional Benefits for Child: Waiver of Premiums, Monthly Payout (Subject to plan terms)Additional Benefits for Child: Waiver of Premiums, Monthly Payout (Subject to plan terms)

  • Use of Maturity Amount for Higher Education with 6% Inflation ConsiderationUse of Maturity Amount for Higher Education with 6% Inflation Consideration.

*The rate of return is subject to market performance.
**Depending on the plan the nominee will either receive full life cover or partial. 

What is Life Cover and its Importance in Child Education Plan in India for NRIs?

  1. Financial Safeguard for Your Child:

    • In the event of your untimely demise, life cover in a child plan acts as a safety net for your child, providing a lump sum amount.

    • This financial cushion is specifically designed to meet your child's needs, including education, marriage, and various other expenses.

  2. Financial Security for Your Child:

    • The life cover ensures that your child remains financially secure even if you are no longer there to support them.

    • This support can be crucial in helping them achieve their life goals and aspirations.

  3. Peace of Mind for You:

    • Knowing that your child has a financial safety net in place can bring you peace of mind.

    • This assurance allows you to focus on other aspects of your life, such as your career and family, without worrying about your child's financial well-being.

  4. Affordability and Long-Term Benefits:

    • Life cover in a child plan is not only a crucial investment but also relatively affordable.

    • You have the flexibility to choose a life cover amount that aligns with your budget while ensuring your child's future needs are met.

How Much Should an NRI Invest in a Child Education Plan in India?

An NRI should consider the following factors while deciding to invest in a child education insurance plan in India:

  • Assess Your Child's Education Goals: Determine the specific educational aspirations and goals for your child, considering potential fields of study and institutions.

  • Understand the Cost of Education in India: Research the current and projected costs of education in India, factoring in tuition fees, living expenses, and other related costs.

  • Evaluate Your Financial Capacity: Assess your current financial situation and future earning potential to gauge how much you can comfortably invest in your child's education.

  • Consider Inflation and Currency Exchange Rates: Account for inflation rates in educational expenses and be mindful of currency exchange fluctuations when planning your investment.

  • Explore Education Plans with Flexible Options: Look for child education plans that offer flexibility in terms of contribution amounts and withdrawal options, aligning with your financial preferences.

  • Diversify Investments for Better Returns: Consider diversifying your investment portfolio to potentially achieve better returns, balancing risk and reward.

  • Review Tax Implications: Understand the tax implications both in India and Singapore related to your investment in a child education plan.

  • Regularly Monitor and Adjust Your Investment: Stay informed about changes in educational costs and regularly review and adjust your investment plan accordingly.

  • Prioritize Long-Term Planning: Emphasize a long-term perspective in your investment strategy, allowing your funds to grow steadily over time to meet your child's future education needs.

Steps to Buy a Child Education Plan From Policybazaar

  • Visit Policybazaar Website: Go to the 'Child Plans' section on Policybazaar website to explore the available options.

  • Complete the Form: Fill in essential details like your Name and Mobile Number to initiate the process.

  • Click 'View Plans': Click on 'View Plans' to proceed to the next stage of selecting the best child education plan.

  • Provide Necessary Information: Enter specific details such as:

    • Your city of residence

    • Your age and your child's age

    • Your annual income

  • Browse the List of Plans: A comprehensive list of child education plans will be displayed based on the information provided.

  • Customize Your Plan: Tailor your plan by specifying:

    • The investment amount

    • The number of years you intend to stay invested

    • The number of years before you plan to make withdrawals

  • Compare Plans: Easily compare child education plans from different insurance companies to identify the one that aligns with your financial requirements.

  • Choose Your Ideal Plan: After comparing, select the child education plan that best suits your needs.

  • Proceed to Payment: Once you've chosen your plan, proceed to the payment stage to secure the selected child education plan.

  • Enjoy Policybazaar Benefits: Experience the advantages of Policybazaar, including

    • Extra payout compared to offline plans

    • No hidden charges

    • Full transparency with clear explanations of charges and returns

    • Expert advice from certified advisors

    • 100% recorded calls for honest selling, ensuring utmost transparency and integrity.

How to Choose the Right Child Education Plan in India for an NRI?

If you are not sure which child plans to buy, consider the following key points before making a purchase decision:

  1. Understanding Your Goals:

    • Define your educational goals for your child in India.

    • Consider factors like the type of education (school, college, professional courses) and the duration of your child's education.

  2. Research and Compare Plans:

    • Explore various child education plans offered by different financial institutions in India.

    • Compare features, benefits, and flexibility of these plans to find the one that aligns with your requirements.

  3. Consider Currency Exchange Rates:

    • Be mindful of currency exchange rates between Singapore Dollar (SGD) and Indian Rupee (INR).

    • Opt for a plan that offers stability against currency fluctuations, ensuring the value of your investment is preserved.

  4. Evaluate Returns and Risks:

    • Assess the potential returns on investment offered by each education plan.

    • Understand the associated risks and choose a plan that balances returns with a level of risk you are comfortable with.

  5. Check Lock-in Period and Flexibility:

    • Examine the lock-in period of the plan and ensure it aligns with your child's education timeline.

    • Look for plans that provide flexibility in terms of partial withdrawals or adjustments in case of unforeseen circumstances.

  6. Understand Tax Implications:

    • Familiarize yourself with the tax implications of the chosen child education plan in both Singapore and India.

    • Optimize your tax benefits by selecting a plan that aligns with your financial strategy.

  7. Read Customer Reviews and Testimonials:

    • Research customer reviews and testimonials to gauge the satisfaction and experiences of other NRIs with similar plans.

    • This can provide valuable insights into the performance and reliability of the chosen child education plan.

  8. Stay Informed and Updated:

    • Keep yourself informed about changes in the financial landscape and policies related to NRI investments in India.

    • Regularly review your child education plan to ensure it continues to meet your evolving needs.

How to Claim Your Child Education Plan?

By following the steps mentioned below, NRIs in Singapore can navigate the process of claiming their child education plan efficiently, ensuring a timely and successful outcome:

  1. Gather Necessary Documents:

    • Collect essential documents such as the child's admission letter, fee structure, and any other supporting papers required for the claim.

  2. Contact the Insurance Provider:

    • Reach out to the insurance company or financial institution that manages your child education plan.

    • Obtain information on the specific process and documentation needed for initiating the claim.

  3. Fill Out Claim Forms:

    • Complete the necessary claim forms provided by the insurance provider.

    • Ensure accuracy and provide all required details to expedite the claim processing.

  4. Submit Documents Electronically or via Mail:

    • Depending on the insurer's procedures, submit the completed forms and supporting documents electronically or through postal mail.

    • Use secure channels to safeguard sensitive information.

  5. Track Claim Status:

    • Regularly check the status of your claim through the insurance provider's online portal or customer service.

    • Stay informed about the progress and any additional requirements.

  6. Verify Currency Exchange Rates:

    • If applicable, verify the currency exchange rates if the claim amount is in a different currency, such as Singapore Dollars (SGD).

    • Be aware of any potential fluctuations that may affect the final claim amount.

  7. Contact Customer Support for Assistance:

    • If you encounter any challenges or have queries during the claim process, contact the customer support helpline of the insurance provider.

    • Seek clarification and assistance to ensure a smooth and hassle-free claim experience.

  8. Stay Proactive and Patient:

    • Be proactive in providing any additional information requested by the insurer promptly.

    • Exercise patience during the claim processing period, understanding that certain procedures may take time.

Advantages of Early Planning for Your Child's Education for NRI

By embracing early planning, NRIs in Singapore can harness the following advantages to secure a bright and stress-free educational future for their children:

  • Financial Security: Early planning ensures you have sufficient funds when they embark on their academic journey.

  • Compound Growth Benefits: Taking action early allows your investments to benefit from compounding. It maximizes the growth potential of your savings over time.

  • Stress-Free Future Planning: Planning ahead reduces financial stress, giving you peace of mind knowing that you have a well-thought-out strategy for your child's educational expenses.

  • Customized Education Fund: Planning in advance enables you to tailor an education fund that meets the specific needs and aspirations you have for your child's academic journey.

  • Access to Educational Loans: Early planning enhances your eligibility for educational loans, ensuring you have additional financial support if needed.

  • Tax Benefits Optimization: Strategic planning allows you to optimize tax benefits associated with educational investments, potentially reducing your tax liabilities.

  • Peace of Mind for Contingencies: Early preparation provides a buffer for unforeseen circumstances. This ensures you can navigate unexpected financial challenges without compromising your child's education.

  • Facilitates Goal Setting: Early planning allows you to set clear and achievable goals, creating a roadmap for your child's education and aiding in better financial decision-making.

In Conclusion!

The Child Education Plan in India for NRIs emerges as a strategic and flexible financial tool that seamlessly combines insurance and investment to secure a child's educational future. With its tax benefits, market-linked returns, and the ability to adapt to changing circumstances, this plan stands as a prudent choice for NRIs seeking to ensure their children's academic pursuits while optimizing their financial portfolio.

FAQ's

  • Which plan is best for child education in India?

    The best investment plans for child education in India are as follows:
    • Bajaj Allianz Smart Wealth Goal - Child Wealth

    • ICICI Pru Smart Kid Plan

    • Tata AIA Capital Guarantee Solution

    • Max Life Capital Guarantee Solution

    • HDFC Life Child Care Plus

  • What is the best investment option for NRI?

    Following are some of the best investment options for NRI in India in 2024:
    • Child education plans

    • Unit Linked Insurance Plans 

    • Capital Guarantee Plans

    • Annuity Plans

  • Which LIC policy is best for children?

    The list of best LIC policies for child are as follows:
    • LIC Jeevan Tarun

    • LIC New Children's Money Back Plan

    • LIC Child Future Plus

*All savings are provided by the insurer as per the IRDAI approved insurance plan.
*Tax benefit is subject to changes in tax laws. Standard T&C Apply
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
#The lumpsum benefit is calculated if policyholder invested ₹10000 monthly for 10 years in the fund with a policy term of 20 years. This Point To Point past performance data of last 10 years has been used to illustrate a scenario for the customers benefit. It is assumed that the past 10 years returns would have also been delivered in last 20 years. This is not guaranteed and not in anyway indicative of what the customer may actually get 20 years from now. The investment is subject to market risk and the risk is borne by the policyholder.
+Returns Since Inception of LIC Growth Fund
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.

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