Child Education Plans for NRIs

Child education plans for NRIs are financial products designed to help parents save and invest money to fund their child's education expenses in the future. These plans involve regular contributions or premium payments over a specified period. Upon maturity of the plan, a lump-sum amount is provided, which can be used to cover educational costs such as tuition fees, books, and other related expenses. Additionally, child education plans include life insurance coverage to ensure financial protection for the child in case of the policyholder's untimely demise.

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  • Insurer pays premium in case of loss of life of parent

  • Create wealth for child’s aspirations

  • Tax Free maturity amount+

  • 12+ plans available

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What Are Child Education Plans?

Child Education Plans for NRIs are designed to assist parents in securing their child's future financially in a structured manner. These plans entail regular premium payments over a specified period, resulting in a lump-sum payout at maturity. While building a fund for the child's education, the plan also provides life coverage.

In the event of the policyholder's untimely demise, the child plan offers triple benefits to the nominee. The family receives the life cover amount, the insurer covers the remaining premiums (waiver of premium), and the child receives monthly payouts for expenses. This ensures that even in the absence of the parent, the child's educational needs, such as tuition fees, books, and uniforms, are met. Additionally, NRI child education plans offer flexible payout options at key milestones in the child's life.

Best Child Plans in India

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 times the Single Premium
For Regular / Limited Pay – 7 * AP
Max Life Online Savings Plan- Child Plan 18-54 years 85 years Rs 12,000/- The minimum Sum Assured is Rs. 1,20,000
Bajaj Allianz Smart Wealth Goal- Child Wealth 18-60 years 85 years Rs 48,000/- 10 times 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 The Minimum Sum Assured is Rs. 1,20,000
BAJAJ Allianz Capital Guarantee Solution 18-55 years 65 years Rs. 20,000 The Minimum Sum Assured is 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 times the
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 times Annualized Premium
Edelweiss Tokio Wealth Secure Plus- Child 18-40 years 100 years Rs 24,000/- 7 x Annualized Premium
See More Plans

Why Buy a Child Education Plan?

For NRIs, child plans offer comprehensive protection with triple benefits in case of the policyholder's demise:

  • Life Cover: The nominee receives the life cover amount for immediate expenses.

  • Waiver of Premium: The insurer covers future premiums; the maturity amount is paid to the child.

  • Periodic Payouts: Monthly/yearly payments support regular expenses like school fees* for the child.

*Varies on the basis of different child education plans. 

What are the Key Features of a Child Education Plan?

Here are the key features of child plans for NRIs:

  • Lump-sum Benefit: Provides a lump-sum benefit to your children in case of your demise within the policy term, safeguarding their education fund.

  • Partial Withdrawals: Offers flexibility in withdrawals after 5 years, aiding in meeting educational milestones.

  • Waiver of Premium: Ensures continuity of the policy without premium disruptions upon the policyholder's untimely death.

  • Tax Benefits: NRIs are eligible for tax deductions under sections 80C and 10(10D) of the Income Tax Act, reducing overall tax liability and maximising returns.

  • Life Cover: Guarantees a predetermined sum to your child in case of unforeseen events, ensuring uninterrupted education for NRIs.

What are the Benefits of Investing in a Child Education Plan for NRIs?

Benefits of investing in a Child Plan for NRIs:

  • Future Security: Ensures your NRI child's educational needs are met, offering peace of mind about their future.

  • Disciplined Savings: Encourages systematic saving for your NRI child's education over time.

  • Financial Protection: Provides immediate payout to your NRI family in case of demise, with waived future premiums.

  • Flexibility: Offers flexible payout options, especially during crucial educational milestones like college admission.

  • Tax Benefits: Provides tax deductions on NRI investments, saving money while securing your child's education.

  • High Returns: Offers potential for higher returns compared to traditional savings, with insurance and investment benefits.

  • Tailored Solutions: Allows NRI parents to choose plans aligning with financial capabilities and their NRI child’s educational needs, with options for partial withdrawals.

  • Inflation Shield: Shields against rising educational costs due to inflation, enabling NRI children to pursue the best courses without financial constraints.

Tax Benefits on Child Education Plan for NRI

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

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Types of Child Education Plans for NRIs

  1. Child Unit Linked Life Insurance Plans (ULIPs)

    As an NRI parent, you aspire to offer your child top-notch education, be it at renowned domestic institutions or prestigious foreign universities. Depending solely on your savings may not cover the extensive expenses involved. Opting for market-linked child plans can help you build the required funds to support your child's educational aspirations.

  2. Capital Guarantee Solutions

    For NRIs seeking a secure investment for their child's future, consider capital guarantee solutions. These options assure protection of the initial invested capital, shielding it from market volatility and economic uncertainties. Your child's principal amount remains safeguarded regardless of financial market performance.

  3. Guaranteed Return Plan (Traditional Plan)

    Child Plans for NRI offer guaranteed returns and insurance coverage for your child's future, providing a secure way to save for education or other milestones. Unlike market-linked plans, they offer a fixed rate of return throughout the policy term, enabling precise planning for your child's future with certainty about the maturity amount.

What are the Triple Benefits of a Child Education Plan?

Triple Benefits in a Child Education Plan for NRI refers to a combination of three key advantages offered under the plan, designed to provide protection and financial security for your child's education. These three benefits are:

  • Life Cover for the parent

  • Waiver of Premiums on Parent's Death

  • Monthly Income for the Child’s Expenses

What is Life Coverage and its Importance in Child Plans?

Life cover in a child plan serves as a financial safety net for your child, especially for NRIs, in case of your untimely demise.

  • It offers a lump sum amount to the beneficiary, typically the child, assisting with financial needs like education and marriage.

  • Provides financial security for your child, ensuring they can pursue life goals even without your financial support.

  • Offers peace of mind for you, knowing your child is financially secure in your absence.

  • Affordable option with long-term benefits; choose a cover amount that fits your budget and your child's needs.

How Much Should You Invest in Child Education Plans as an NRI?

  • Determine the amount to invest in a child plan based on your financial situation, goals, and the cost of education.

  • Start investing early to benefit from compounding growth in the child education plan.

  • Aim to save around 20% of the estimated cost of education, but adjust based on income, financial obligations, and time until your child starts education.

  • Set a realistic budget aligned with your income and expenses.

  • Estimate future education costs considering inflation and potential scholarship opportunities.

  • Review investment options and contribution limits of the chosen child plan.

  • Use the Child Plan Calculator to understand your investment requirements better.

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How to Buy a Child Education Plan From Policybazaar?

By following the steps below, you can make an informed decision and choose the best child education plan for your needs:

  • Visit the 'Child Plans' section on Policybazaar's website.

  • Complete the form with details like Name and Mobile Number.

  • Click on 'View Plans' to proceed.

  • Provide necessary information including your city of residence, your age, your child's age, and your annual income.

  • View the list of available child education plans.

  • Customize your plan by selecting the investment amount, duration of investment, and withdrawal period.

  • Compare plans from various insurance companies to find the most suitable one for your financial goals.

  • Proceed to payment after selecting the best child plan.

Benefits of choosing child education plans from Policybazaar for NRIs include:

  • Enhanced payouts compared to offline plans.

  • Transparent pricing with no hidden charges.

  • Expert guidance from certified advisors.

  • All calls are 100% recorded, ensuring transparent and honest transactions.

How to Choose the Right Child Education Plan?

If you are unsure which child plans to buy, consider the following key points before making a purchase decision.

  1. Set Financial Goals:

    • Determine future education expenses for your child.

    • Account for inflation and other potential costs.

  2. Compare Plans:

    • Research and compare different child education plans.

    • Look for flexibility and customization options.

  3. Insurance Company Reputation:

    • Choose a plan from a reputable insurance company.

    • Check customer reviews and ratings.

  4. Look for Triple Benefits:

    • Life cover for the parent.

    • Premium waiver on the death of a parent.

    • Monthly income for the child.

  5. Coverage and Benefits:

    • Assess coverage and additional benefits.

    • Check for premium waivers during unforeseen events.

  6. Premium and Payment Flexibility:

    • Evaluate premium amount and payment frequency.

    • Choose plans with flexible payment options.

  7. Lock-in Period and Withdrawal Policy:

    • Understand the lock-in period and withdrawal policies.

  8. Investment Options:

    • Examine investment options aligned with risk tolerance.

  9. Tax Benefits:

    • Seek plans offering tax benefits under Section 80C and Section 10(10D) of the Income Tax Act.

  10. Policy Terms and Conditions:

    • Understand policy terms and conditions thoroughly.

    • Clarify doubts with the insurance provider.

  11. Review and Adjust Periodically:

    • Periodically review and adjust plans to align with changing financial goals and educational needs.

Also, remember that the earlier you start, the more benefits you get. Starting your investment early helps to build a larger corpus, which, in turn, gives greater freedom in making any financial decision.

What is the Child Education Plan Claim Process?

The claim process for child plans involves the following steps:

  • Informing the insurance company: Notify the insurer promptly about the incident by contacting their customer service or claims department, or reach out to Policybazaar’s claims settlement team.

  • Documentation Required:

    • Fill out a claim form accurately.

    • Provide a copy of the child insurance policy.

    • Submit medical records if the claim involves medical expenses.

    • Include a valid proof of identity (Aadhaar card, PAN card, or passport).

    • Provide incident-related documents like police reports or FIRs.

  • Submission of Documents: Gather all necessary documents and submit them to the insurer within the specified timeframe. Keep copies of all documents for personal records.

  • Verification and Assessment: The insurance company will review the submitted documents and may conduct investigations if necessary.

  • Claim Settlement: Once the claim is verified and approved, the insurance company will process the settlement. The settlement amount will depend on the terms and conditions of the child plan. The insurer will pay the policyholder or the nominee, as applicable.

What are the Advantages of Early Planning for Your Child's Education?

There are many advantages to early planning for your child's education as a NRI. Here are a few:

  • Increased Savings Over Time: Begin early to benefit from compound interest, allowing your money to grow steadily.

  • Reduced Financial Stress: Early planning helps manage rising education costs, avoiding sudden financial burdens.

  • Expanded Options: Early planning provides ample time to explore educational choices and access financial aid opportunities.

  • Financial Responsibility: Early savings instill valuable lessons in financial planning and responsibility for your child.

  • Enhanced Success Opportunities: Early planning ensures financial resources for your child's education, paving the way for their success.

Conclusion

Child Plans for NRIs offer parents a strategic method to save for their children's future education. By initiating early savings, you ensure that your child has sufficient funds, even amidst unforeseen circumstances. These plans not only accumulate savings but also provide the assurance of unhindered education for your child, ensuring their dreams have the necessary support to materialize.

FAQ's

  • Is a child's plan a legal document?

    It depends on the type of plan:
    • Child Protection Plan (CPP): This is a legally binding document outlining measures to protect a child at risk of harm. Professionals involved must follow it.

    • Education, Health and Care Plan (EHCP): This is a legally binding document detailing support for children with special educational needs or disabilities.

    • Care Plan: This is a non-legally binding document outlining care arrangements for children in need or looked-after children. It guides professionals but doesn't have legal force.

  • How serious is a child protection plan?

    A CPP is very serious. It indicates a child is at significant risk of harm and requires immediate action to protect them. Ignoring or breaching a CPP is a serious offense.
  • What should be in a child's care plan?

    A care plan should outline:
    • Child's needs and strengths.

    • Agreed goals and how to achieve them.

    • Roles and responsibilities of professionals involved.

    • How the plan will be reviewed and updated.

  • What is a child plan in the UK?

    Child plan can refer to different things:

    Government's The Children's Plan: This outlines strategic objectives for improving children's lives across various areas like health, education, and safeguarding.

    Charity child sponsorship: Organizations like Plan International UK offer child sponsorship programs to support children in developing countries.

  • Can I refuse a child in need plan UK?

    If you disagree with a child in need plan, you have the right to challenge it through specific procedures defined by your local authority. However, refusing the plan itself might not be possible, especially if concerns exist about the child's well-being.

*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
~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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