Child Plan

Child plan is a mix of investment and insurance that usually aids in financial planning for kids’ future needs and requirements at the right age. You can protect and secure the future of your child with child insurance plans encompassing child insurance plan. Under a child policy, life cover is available as a lump sum payment at the conclusion of the policy term. This is not it; such plans also offer coverage your child with flexible pay-outs at the crucial milestones of the child’s education.

Like most parents, you would also have various concerns when it comes to the future of your child. And, of course, a lot of questions too. Questions like...

• Can I afford my kids’ education?
• Do I have enough money in my bank account?
• What if something bad happens to me, or them?
• But many of you don’t consider the most important question – Should I buy a child plan for my kid?
• Unlike some questions, this one’s easy to answer.
• ‘Yes, you should’

A college degree, regardless of the surging cost of education, remains a major and the most important achievement in the modern economy. You’re more likely to get a job and earn an adequate salary the more educated you are.

Yet many parents aren’t preparing for it. The outrageous cost of higher education, with a lack of parental savings and the economic advantage of going to college or university, has led to historic levels of education loans.

Here Child Education Plan Comes to Rescue:

Child Plan is insurance cum investment plan that kills two birds with one stone, i.e. financially securing your kids’ future and financing the decisive moments in your kids’ life like higher education and marriage.

So, like a double-edged sword, the best child education plan is designed to safeguard the child’s future in case of your unfortunate and untimely demise and at the same time, builds a financial corpus over a time to be utilized to finance prime moments in your kid’s life.

What is a Child Education Plan?

A child education plan offers a secure future and comprehensive benefits of life insurance along with maturity benefit. A child education plan helps to meet expenses of child’s education and future needs. The plan can also be used as collateral for an education loan.

The surging cost of education is one of the biggest troubles for Indian parents.

Here are some facts supporting this statement:

In an online survey conducted by ET Wealth, over 60% of Indian parents listed this as their biggest worry. This was shadowed by not saving enough, lack of knowledge, and starting too late.

However, here they didn’t consider the actual biggest worry - the risk of their own unfortunate demise. Well, you should have. As per statistics of the National Crime Records Bureau, every 90 seconds an Indian citizen dies in an accident.

Compare Best Child Insurance Plans in India

A wise mom once said, "Your child will keep building castles in the air; you better start buying bricks for those castles today." Loving your child is what comes naturally, but as a responsible parent, you have certain obligations towards your child. Getting a child education plan is one such obligation; in fact, the most important one. If you are reading this, you've already proved that you are a concerned parent finding ways to secure your child's future. Let us help you in understanding what exactly a child plan is and the need to go for the best one.

Best Child Plan - Eligibility Criteria:

Key features of Child Insurance Plans:

A child insurance plan comes loaded with a wide range of useful features to ensure a rewarding return and protection. Quite expectedly, a child education policy is a must for every parent.

Quite often, a child insurance plan is designed to offer safety to the kids in the case of financial crunch during vital decisions of life. Child plans are available in both non-linked and linked types.

Here’s a little overview of just some of the many helpful and useful features of the best Child Education Plan: A child plan comes loaded with a wide range of useful features to ensure a rewarding return and protection. Quite expectedly, a child education policy is a must for every parent.

Quite often, a child education plan is designed to offer safety to the kids in the case of financial crunch during vital decisions of life. Child plans are available in both non-linked and linked types.

Here’s a little overview of just some of the many helpful and useful features of the best Child Education Plan:

• Sum Assured

  The sum assured in a child education plan is the amount of money that is paid out in event of the unfortunate or untimely demise of the policyholder. Most of the time, the sum assured must be more than 10 times the current gross earning of the policyholder.

• Premium Amount

  It is subject to the sum assured and the amount of maturity benefit you opt for. You may opt to pay the premium amount frequently on regular intervals or for a certain period of time. Most of the life insurance providers offer options such as annually, semi-annually, quarterly, and monthly mode of payment. The amount of premium varies depending on the sum assured you choose in case of the traditional child plans.

• Policy Term

  When you realize that your child should get on his/her feet is the best time for the policy to mature. Choose the policy term to meet the exact period. For example, if one of your children's age is 10 years, then choose the policy term of 8 years.

• Waiver of Premium Benefit

  Waiver of Premium (WoP) is an inherent rider of a child education plan. This feature is applicable if the policyholder dies in a stipulated period of time. In such a case, the sum assured will be paid out to the nominated beneficiary, while the due premium for the remaining policy term is paid by the insurance company.

  At the maturity of the policy, the nominee is entitled to receive the maturity amount as mentioned in the policy document. In case this feature is not a part of the plan, it is recommended to include it without failure.

• Partial Withdrawal

  It is often seen that parents instead of holding back themselves for the policy to mature, like to withdraw the sum assured in multiple fragments whenever they need it. This is often selected to fulfil the financial needs of the child at certain key moments. Many child plans also come with an option of partial liquidity.

• Premium Payment Mode Sum Assured

  The sum assured must not be less than at least 10 times your current income, says the thumb rule.

  • Regular premium- Under this mode of premium payment, you need to pay the premium on a regular basis, viz. annually, semi-annually, or quarterly.
  • Single premium - Under this mode of premium payment, the premium is paid only once.

• Maturity Amount

  You should choose the maturity amount keeping an eye on your child’s future. You can consult a financial advisor and remember the inflation rate along with interest rates and all other factors, plan the maturity amount that you would need at policy maturity. You can receive the maturity amount as a lump-sum pay-out or over a period of 5 years.

  Also, child education plan such as single premium plan may not offer appropriate maturity features and benefits, so go through the fine prints of the policy document before applying.

• Funds’ Choice

  A child education plan such as a ULIP plan enables you to choose the type of fund to make an investment (money market, hybrid, debt, and equity). You’re given an option of Dynamic Fund Allocation and Systematic Transfer Plan also.

• Additional Riders

  Certain riders are available, which give you more than just a simple life insurance policy. These riders are available in three sub-categories:

  • Accidental Death and Disability Benefit – The Accidental Death and Disability Rider Benefit pay the extra sum assured in the event of your unfortunate mishap causing death or disability.
  • Premium Waiver Benefit – This rider may be already added to the best child education plan, so check your policy document in this regard.
  • Critical Illness Rider Benefit – Critical Illness rider benefit offers coverage for a pre-determined set of critical diseases.

• Immediate Financial Protection

  In case of death of a parent. Child plans pay a lump sum amount in case of death of earning member who was paying the premiums for child plan. This money is completely tax-free and is usually sufficient to pay off any immediate debts so that child education is not impacted.

• Tax Benefits

  All child plans fall under the highest bracket of tax exemption i.e. E-E-E category. This is the highest grade of tax benefit accorded by the Indian Tax Laws to schemes like PPF.

• High Returns that beat inflation

  All market-linked child plans offer returns above 10-12%. Most government schemes like SukanyaSamridhi Schemes offer much lower returns that do not beat inflation. What more, locking your self in SukanyaSamridhiYojana leaves your money to risk of fluctuating interest rates every quarter. For instance, in times of recent Coronavirus crisis, the government slashed interest rates of SukanyaSamridhi Scheme from 8.4% to 7.6% in a single quarter. The interest rates for all these schemes are already falling and are only going to fall further as India moves steadily on the path of becoming a developed economy. The current interest rates apply to all the policyholders of SukanyaSamridhi Account including those who invested in the policy before the rate cut was announced.

Advantages of a Child Plan

A child plan offers a wide range of exciting and unique benefits to the policyholder. With amazing advantages, a child education plan is a must-have in your kitty. This will help you make sizeable savings for your child without having to run from pillar to post.

Here’s a rundown to the advantages of the best Child Education Plan:

• Corpus for Child's Education

  Even with minimum premium payment, child plans are able to provide as much as 10 times the amount paid in the child plan. This lump sum amount in child education plans can be foremost utilized towards education expenditure.

  A child education plan is often enough to pay for college education, and even higher education in a foreign country. The money available from a child education plan depends on the terms and conditions of the plan and on the amount one has invested in it by way of premiums.

• A Kitty for Medical Treatment of the Child

  Child plans also allow the option of withdrawing money during the tenure of the child investment plans. This can be used for medical treatment of the child when he or she falls ill. Such partial withdrawals come in handy when the child is hospitalized due to an ailment, minor accident or a more serious medical condition. The best child plan helps to reduce the financial burden caused by medical expenditure and such payouts act as an add-on for one's health insurance plan.

• Supports the Child in the Absence of Parent(s)

  Death does not come with an invitation and no amount of preparation can leave on ready for such an event. The consequences are more so for the innocent child. The death of the parent(s) causes severe trauma to a child and can leave his or her future hanging by a thread. The insurance company offers a premium waiver if the parent (i.e., the insured) passes away during the policy term of a child education plan.

  The premium waiver benefit often comes inbuilt with the best child education plan. If not, one should definitely opt for this rider. The child receives a lump sum amount promised at the time of purchasing the best child plan and does not have to pay balance premium.

  This rider enables the policy to continue without any breaks and passes the financial burden of remaining premium to the insurer.

• Income Protection for the Child

  A child education plan also protects the income of those children who start earning at a young age. It includes child actors, musicians, artists and performers among others. It provides the advantage of capital appreciation over the long-term for the child.

• Acts as Collateral for Loans for Higher Education

  Higher education is expensive, whether one plans to send the child to a private college or university in India or abroad. In fact, international education is significantly more expensive. A Child plan comes in handy if one intends to secure a loan for higher education as these are allowed to be used as collaterals. They can also be used as collateral for other child-related borrowings.

  A child plan is a great education policy and the best investment plan for the child. The child education plan also instils discipline and helps form the habit of saving to secure the child's future.

Benefits of Child Education Plan

A child education plan offers dual advantage of comprehensive life insurance cover and maturity benefits. A child plans secure child’s future when you are not around. The plan can also be used as collateral for an education loan.

• Tax Benefit

  You can avail tax benefits under a child plan on death or maturity claim profits under section 10 (10D). Moreover, the premium paid for a child education plan is eligible for tax deduction under section 80C of the Income Tax Act, 1961.

• Maturity Benefit

  At the time of maturity of the child plan, the sum assured is paid out to the guardian or parent. In the event of the early demise of the insured, the kid is allowed to get all the benefits of the child plan.

• Loan Benefit

  You can also avail secured loans against a child education plan.

Types of Child Plans

Mostly all the insurance providers offer child insurance policies as a vital insurance product in the portfolio. These child plans may vary on different parameters basis the individual priorities and needs and come handy with customised and tailor-made features.

Different types of Child Plans in India are:

• Single Premium Child Plan

  The policyholder pays a lump sum amount in the form of a single premium for the entire policy term and stays worry free from remembering the due dates of premium payment. You’ll not have to come across any hassles of making arrangement of finances for the premium payment. Some insurance providers additionally offer appealing discounts or reduce the premium on child plans.

• Regular Premium Child Plan

  Unlike single premium child education plan, regular premium child policy offers you flexibility on payment of premium. You can pay the premium monthly, quarterly, half-yearly, or yearly.

• Child ULIP

  Child ULIP plan gives you a three-prolonged benefit, along with higher insurance coverage, contribution in the equity market, and disciplined investments. Three benefits mean that the nominated beneficiary, i.e. the child receives the sum assured on the demise of the insured parent or guardian. The future premiums are waived off and the maturity amount is paid when the policy matures, making sure that the future dream of your children is fulfilled.

• Traditional Child Endowment Plan

  The premium is invested in debt instruments while the decision is at the kept with the insurance company. The bonus payable at maturity decides the returns.

How is it Different from a Term Plan?

Best Child Plans in India 2019:

So far, we’ve discussed a lot about child plans. So, if you’ve made up your mind of buying one, let’s discuss the best child plans in India:

• Bajaj Life Future Gain

  Bajaj Life Future Gain is a Unit-linked Endowment Plan by Bajaj Allianz Life Insurance Company, which offers maximum premium allocation to ensure that your hard-earned money is fully utilised towards your set goal.

  Key Features:

  Some of the key features of Bajaj Life Future Gain ULIPs are:

  • Maximum premium allocation
  • Option to make payment of top-up premium
  • Option to change premium payment frequency
  • Choice of 7 funds
  • Partial withdrawal option is available
  • Settlement option
  • Option to add riders to enhance your coverage
  • Option to reduce the SA

  Eligibility Criteria:

  Parameter	Minimum	Maximum
  Age of Entry	1 year	60 years
  Maturity Age	18 years	70 years
  Policy Term	10 years	The term policy will be: Premium Paying Term (PPT) 5 or 6 Other PPTs Policy Term 10,15 to 20 years 10,15 to 30 years
  Premium Payment Term (PPT)	5 years	30 years
  Premium Payment Frequency	Monthly, Quarterly, Semi-annually, Annually

• HDFC Life Click2Wealth

  HDFC Life Insurance Company offers HDFC Life Click2Wealth – a Unit-linked Life Insurance Plan. This ULIP plan offers market linked returns with minimal charges and provides financial protection for your child.

  Key features:

  Listed below are some of the key features of HDFC Life Click2Wealth:

  • Premium waiver benefit
  • Unlimited free fund switching with choice of 8 fund options
  • Minimal charges
  • Return of Mortality Charges
  • Systematic Transfer plan strategy

  Eligibility Criteria:

  Parameter	Minimum	Maximum
  Age of Entry	0 years	65 years
  Maturity Age	18 years	99 years
  Policy Term	10 years	40 years
  Premium Payment Term (PPT)	Limited: 5,7, & 10 years Regular: 10-40 years
  Premium Payment Frequency	NA

• Max Life Online Savings

  Max Life Online Savings plan is a non-participating, unit-linked insurance plan, which provides market linked returns along with life insurance protection. You can choose your fund option and death benefit basis your need and requirement.

  Key features:

  Following are the key features of Max Life Online Savings plan:

  • Unlimited free switches
  • Zero Policy Administration Charges and Premium Allocation
  • Choice of fund options or investment strategy
  • Dynamic fund allocation
  • Choose your annual premium

  Eligibility Criteria:

  Parameter	Minimum	Maximum
  Age of Entry	18 years	Variant 1: 60 years Variant 2: 54 years
  Maturity Age	NA	Variant 1: 85 years (for >= 10 pay variants) and 70 years (for >= 5 pay variants) Variant 2: 64 years
  Policy Term	Variant 1: 5 years (for Maturity age <=70 years) 10 years (for Maturity age between 71 years and 85 years) Variant 2: 5 years	Variant 1: 52 years (for Maturity age <=70 years) 67 years (for Maturity age between 71 years and 85 years) Variant 2: 30 years
  Premium Payment Term (PPT)	Variant 1: 5 years (for Maturity age <=70 years) 10 years (for Maturity age between 71 years and 85 years) Variant 2: 5 years		Variant 1: up to chosen Policy term (for Maturity age <=70 years) Up to chosen policy term (for Maturity age between 71 years and 85 years) Variant 2: Up to chosen policy term
  Premium Payment Frequency	Monthly, quarterly, semi-annually, annually

• ICICI Pru SmartKid

  ICICI Pru SmartKid plan is a unit-linked insurance plan by ICICI Pru Smart Life. This plan helps you save money and build a financial corpus for your child’s future.

  Key Features:

  Some of the chief features of ICICI Pru SmartKid Plan are:

  • Premium Waiver Option
  • The convenience of purchasing online
  • Choice of 4 fund options
  • Free switching options
  • Choice of investment strategy

  Eligibility Criteria:

  Parameter	Minimum		Maximum
  	Regular Pay	Single Pay	Regular Pay	Single Pay
  Age of Entry	20 years	20 years	54 years	54 years
  Maturity Age	30 years	30 years	64 years	64 years
  Policy Term	10 years	10 years	25 years	NA
  Premium Payment Term (PPT)	Same as the Policy term		Single Pay
  Premium Payment Frequency	Regular Pay: Monthly, semi-annually, and annually		Single Pay: Single

• Edelweiss Tokio Wealth Plus

  Edelweiss Tokio Wealth Plus is a non-participating, unit-linked life insurance plan, which offers life cover along with investment strategies.

  Key Features:

  Some of the main features of Edelweiss Tokio Wealth Plus plan are:

  • Rising Star Benefit
  • Extra Allocation
  • Premium Booster
  • Liquidity – Partial Withdrawal option
  • Additional Allocations

  Eligibility Criteria:

  Parameter	Minimum	Maximum
  Age of Entry	1 year	55 years
  Maturity Age	18 years	70 years
  Policy Term	10 years	20 years
  Premium Payment Term (PPT)	5 years	Policy term minus 1
  Premium Payment Frequency	Monthly, quarterly, semi-annually, annually

How Does the Waiver of Premium Benefit Work?

In case you are not aware then a waiver of premium (WoP) is one intrinsic characteristic of a child education plan. Besides, if you look forward to including waiver of premium to the child plan then one need not pay anything additional.

During the tenure of the policy, if the parent passes away then under such a circumstance, waiver of premium is likely to be applicable. Moreover, under such a condition, the prospective premiu m is paid by the insurance provider and the child will receive the maturity amount as discussed during the inception of the policy.

Do you really need a Child Education Plan?

Yes, you do!

Here's why - at the present rate of inflation, the ever-soaring costs of education worry us all.

Did you know 65% of the parents spend more than half of their annual income on the education of their child and extra-curricular activities?

According to a survey on “Parents wary of rising education cost of their children” of young parents for the education of their kids revealed that the average spending on a Single child at primary or secondary education on the expenses excluding the tuition fees has risen from Rs. 65,000 in 2011 to Rs. 1 Lakh (approx) in 2019.

Child Education Plan critics debate that these plans come at a higher cost as compared to a term insurance plan. They say that rather than allocating a large amount of money as premium to child insurance, a parent must but a term plan with the same sum assured for him and invest the remaining amount in mutual funds. After the policy matures, he will have a huge and bigger financial corpus.

However, they miss out on a very important and crucial detail.

What happens when a parent faces an unfortunate and untimely death five years after buying the plan?

The term insurance plan will give a lump-sum amount of money for the immediate requirements and need of the policyholder’s family and the mutual fund investment will also stop. However, the best child education plan will not only pay a lump sum amount but also continue making an investment on behalf of the insured.

Insurance companies believe that the premium waiver benefit in child education plan is the key as it does not let the demise of the insured derail the investment plan for his kid.

How Much Should You Invest In a Child Plan?

To answer this question, it is important to understand the importance of good education in India. India is rapidly moving towards a society where the gap between rich and poor is widening. A good education can be a foot in the door for your child to start earning a good livelihood and more importantly not become a liability on your earnings when you need your earnings for your retirement.

How Does it Work?

A child education plan can work as an Endowment Policy, a ULIP, or money-back. The money-back plan is so far the most sought after the plan. This scheme makes sure that your kid will get survival benefit at regular interval of time. These plans are highly useful for individuals who need lump sum money at regular intervals and help in life stage planning. The disadvantage of using the money back only is that sometimes the returns from this investment may not match the rate of inflation, especially when you plan to it for the education of your child. Cost of education is rising at around 12 percent in comparison to this, money-back plans would give you approx. 4-8 per cent, leaving you underfunded at the time of the goal.

Moreover, money back plans have steep premiums. Then again, ULIP plans are non-traditional plans and the returns depend on the market condition. In case of the demise of the parent, the sum assured would be received by the child as a lump sum. This will include the waiver of all the future premiums and the fund value upon its maturity.

Do not forget that ULIP plans to deliver a wide variety of funds ranging from aggressive too conservative. ULIP schemes give you an option of switching funds from equity to debt and vice versa without paying tax on it.

The third operational child plan instrument could be the Endowment Policy. This policy is where you will receive the lump sum amount on maturity along with bonuses. This is beneficial as it gives space for preparation of your child’s expenses like higher education, etc. However, this is different from ULIPs, since it allows for a least guaranteed payment.

Let us Take Examples and Understand the Working of all Kinds of Child Education Plan:

Imagine, Mr. Sharma has a kid of 5 years and he needs money when his kid would turn 20 for higher education. He, thus, purchases a child policy for 15 years.

Scenario 1:

Mr. Sharma needs a financial corpus of Rs. 10 Lakh. So, he purchases a traditional endowment plan with a Sum Assured of Rs. 10 Lakh for 15 years and pays premium every year. If during the policy term (i.e. 15 years), Mr. Sharma dies in the 8^th year, the policy would not end. The insurance provider would pay a death benefit (generally the SA of Rs. 10 Lakh) immediately and waive off the future premiums. This policy would then continue for the remaining 7 years. After completing 15 years of the policy term, the policy would mature and pay maturity benefit of Rs. 10 Lakh. Hence, the child policy pays the financial corpus, which Mr. Sharma would require after the completion of 15 years for the higher education of his child. M. Sharma’s dream gets fulfilled even when he’s not around.

Scenario 2:

Mr. Sharma buys a money-back policy that promises to pay around 20 per cent of the Sum Assured after the completion of every 5 years. After completing the first 5 years of this child education plan, Mr. Sharma gets Rs. 2 Lakh (where SA is Rs. 10 Lakh). Henceforth, in the 10^th year also, he receives another Rs. 2 Lakh. In the 12^th year, Mr. Sharma faces an unfortunate death. This policy pays the total SA of Rs. 10 Lakh regardless of the money-back benefits already paid. The insurer will waive off the premiums for the next 3 years and the plan continues. Upon the maturity of the best child policy chosen by him, the guaranteed maturity benefit, i.e. 60 percent of the SA is again paid.

Scenario 3:

Mr. Sharma purchases a ULIP plan and pays a premium of Rs. 1 Lakh every year for 15 years. In case of his demise during the policy term of the child education plan, the insurance company will give the death benefit. Moreover, the insurer will waive off the premiums and the child education plan would continue. On maturity of the plan, the insurer will pay the fund value that would aid Mr. Sharma’s family to send his child abroad for higher education.

Documents Required for Child Policy

Here’s a list of documents that will be required while buying a child policy:

• Proof of Age

  Birth Certificate, 10^th /12^th Mark sheet, and Passport.

• Proof of Identity

  Aadhaar card, Passport, PAN Card, Voter ID

• Proof of Income

  Proof of income showing the income of the buyer of the insurance.

• Proof of Address

  Telephone bill, Electricity bill, Ration card, Passport, Driving License

• Proposal Form

  Duly filled proposal form.

Child Insurance Plan Claim Process

You must buy a child insurance plan for your child from an insurance provider that has a higher claim settlement ratio. This will makes sure of the quick and smooth claim process and settlement in the times of crisis. Here’s the common claim process for almost every insurance provider:

• In case of any situation for which you need to file a claim, notify the insurance provider about the incidence ASAP. You can do this online by sending an email or by calling on your insurer’s toll-free number or simply by paying a visit to the nearest branch office.
• Submission of the duly filled claim form is also necessary along with giving all the minute and necessary details such as the cause and the date of the incident, nominee’s name, etc.
• Once you register a claim with the insurer, provide the necessary and supporting documents along with reports.
• The insurance provider will appoint a surveyor to verify the case and the supporting documents.
• If approved, and with no further inquiry, the insurance company transfers the claim benefit with 30 days of the furnishing documents.

Documents Required for Child Insurance Claim Process

You would require the following documents while filing a claim for child plan:

Duly filled claim form, the policy document, medical certificate, death certificate, diagnostic reports, prescriptions, post-mortem report (in case of unnatural demise), FIR copy (in case of unnatural demise), NEFT details, and KYC of the nominee and the policyholder.

Exclusions of Child Insurance Plan

The insurance provider does not offer coverage in the event of demise occurred under certain circumstances. They are known as exclusions. Child insurance plans do not include the following:

• Drug or alcohol abuse

  In case the policyholder dies due to drug overdose or alcohol abuse, the nominee does not receive any benefit.

• Self-harm or Suicide

  The nominated beneficiary does not receive any claim amount in case the death due to suicide within one year of buying the child policy.

• Adventurous or Risky Sports

  In case the insured happens to take part in any adventurous or risky sports like skydiving, rock-climbing, racing, etc. that leads to death, the insurance provider does not entertain claims.

• Criminal Activities

  Any criminal or illegal act or act of war leading to the demise is also not covered under a child plan.

Understanding the Cost Structure of Education in India

Assuming that the rate of inflation is the equivalent 10% going ahead.

Now having said so, in today’s time somebody who desires to pursue engineering in any of the premier colleges in the country it would cost about Rs. 10, 00, 00. And, then in the coming years say 15 years it would be somewhere between 40 to 50 Lakh.

Likewise, if a private medical college charges Rs.25, 00, 00 then you can easily calculate that in the next fifteen years you need to have a corpus of about a crore.

India is one of the most opulent developing countries across the globe. Gone are the days when India was only limited to be known for its rich culture and traditions. Today, it has also earned a name when it comes to the educational sector.

Today, in India, we have a plethora of options available in terms of schools, colleges and universities and opting for the ones that suit your requirements. However, it is prudent to understand the factors, which affect the cost of education in India.

Read below!

Accommodation: Today most of the Indian universities/ colleges provide accommodation facilities within the campus both for the Indian and non-Indian citizens. In case, you are or intend yourself to enrol into a college, which does not have an accommodation facility there is nothing to be worried about. One can conveniently look for personal accommodation.

Depending upon the suitability, one can opt for a rented flat or a private hostel with sharing room facility. Opting for private accommodation has its advantages. One can easily find a room between Rs. 10, 000 and calculated annually would be around Rs. 1, 20,000.

Additional Expenses (Every Week) Includes:

• Outside Eating: Rs. 1500 to Rs. 4500
• Public Transportation: Rs. 50 to Rs. 100
• Private Transportation: Rs. 500 to Rs. 1000
• Miscellaneous: Rs. 200 to Rs. 500
• Leisure Activities: Rs. 500 to Rs. 1000

Undoubtedly, parenting a child is not an easy task. As the child grows, similarly the amount being spent on them also increases.

Primary Education: Generally, if a student is studying in the government school somewhere aged between 6 to 14 years the cost of education is almost negligible sometimes almost free. On the contrary, when it comes to private schooling the school mostly charges let's just say towards a lower end Rs. 1200 to Rs. 2, 000 every month.

Secondary Higher Education: The secondary higher education essentially covers children who are aged between 12 to 18 years. So, if a student is in a government school for 6 years at a stretch it would cost him approx Rs. 30, 600 and in private schools, the parents would end up paying approximately Rs. 3, 96,000.

In case, if the child is put up in a boarding school, the parents would end up paying Rs. 18, 00, 000 for the coming 6 years. As per a survey conducted by Assocham, 169% has been the ascent in inflation in regards to both primary and secondary education from 2005 to 2011.

• The Expense of Graduation and Post Graduation Education in India

  1. Government College/ University: Rs. 5,00,000 to Rs. 6,00,000

  2. Private College/ University: Rs. 8,00,000 to Rs. 10,00,000

  3. International College/ University: Rs. 1,00,00,000

• The Expense of Medical Studies in India

  1. Government College/ University: Rs. 5,00,000 to Rs. 10,00,000

  2. Private College/ University: Rs. 18,00,000 to Rs. 20,00,000

  3. International College/ University: Rs. 1,00,00,000

• The Expense of Commerce and Arts/Humanities in India

  1. Government College/ University: Rs. 2,000 to Rs. 15,000

  2. Private College/ University: Rs. 2, 50, 000 to Rs. 5,00, 000

  3. International College/ University: Rs. 50,00,000

• The Expense of Engineering in India

  The course of engineering is considered to be one of the most sought career options undertaken by a majority of students in India. Besides, it is also one of the reputed and well-paid jobs. The US Silicon Valley comprises of the Indian based- engineers.

  For a four-year engineering course, a student ends up paying Rs. 1, 25,000 to Rs. 5, 00,000. And when it comes to India’s finest engineering colleges such as IIT, NIT, BIT’s Pilani, etc. the parents need to pay approximately Rs. 10,00,00- to Rs. 15,00,000 respectively.

For Post Graduation-

Just like the expense of engineering, you may consider the expense similarly.

One of the most cherished dreams for any medical aspirant is becoming a doctor. Becoming a doctor is something, which takes in a lot of hard work and sincerity and something to take extreme pride. In India, the medical seats are limited and the competition is high.

In terms of fees-structure and other expenses, the government colleges/ university have a reasonable structure with fewer than Rs. 10, 00,000. However, in private colleges/ universities, the fees could easily go up to Rs. 50, 00,000 for the equivalent.

And, if someone is interested in undertaking a postgraduate degree in the same field, then one should be mentally and financially stable to spend approximately Rs. 30, 00,000 in a private institute.

As discussed earlier, raising a child is no meek man task and to raise a child in the best possible manner financial planning is of utmost importance. In case, as a parent you still wonder in regards to the importance of planning then we will help you.

The below table consists of the basic and essential educational expenses that are involved when it comes to raising one or two children:

How to Get the Best Child Education Plan

There are many child plans offered by insurance providers; however, certain things should be considered while choosing the best child plan to ensure the best future for your kid. Below-mentioned tips help in making a wise decision to best meet the child's needs.

• Start Early

  It is advised that you start investing as early as possible for the future of your child as it helps to build a larger corpus which in turn, gives greater freedom in taking any financial decision.

  Most child plans offer maturity benefit and start giving payouts at key milestones in life after the child turns 18 years old. The overall benefit of the best child education plan is higher if one starts investing early.

  This tip cannot be stressed enough as most people do not realise that each additional year of investment means a bigger corpus. In fact, starting the child education plan when the child says 5 years old or when he or she is 10 years old, may eventually translate into having to take a loan to pay off the tuition or college fees in the latter case.

  Starting early helps as the investment returns between starting a couple of years later for the same plan and the same amount can mean a difference of a few Lakh.

• Factor in Economic Variables

  It is important to understand that savings and investment for your child will be taken advantage of only in the forthcoming years. Multiple economic variables need to be factored in while deciding an appropriate sum assured.

  Inflation, an increase in the cost of education and healthcare expenses, among other economic factors, if accounted for properly will provide adequate funds for the child in the future. The best child education plan can help you fight this.

• Special Attention to Terms and Conditions

  You should scrutinise the fine print and understand the terms and conditions of the child education plans' policy document properly. The best child plan has unique features and it is important to interpret them correctly. This will prevent confusion at the time of maturity and/or in the payout.

  It will also help in selecting the best education plan as per individual requirements, one that is best for the child's needs. It makes sense to use our site to compare the various plans in detail and pick the child education plan that best suits the requirements.

• Choose the Premium Waiver Benefit

  In the event of your unfortunate death during the policy tenure, insurance companies often offer to waive the premium. This is known as premium waiver benefit or self-funding of premium. It helps in continuing the policy without straining the family including the child for premium payments.

  The child receives the full benefit at maturity, promised at the beginning while purchasing the policy. This feature is normally built into child plans; if not, then you should definitely go for this rider.

• Opt for Partial Withdrawals Clause

  Emergencies can happen at any time and the child may require financial aid to tide over emergency cash requirement situations. The provision of partial withdrawals allows withdrawal of partial sums of money from the best child education plan to meet unforeseen expenses.

  This prevents any emergencies from causing any sort of financial instability in the family or in the child's education or dreams. Partial withdrawals help in not disturbing financial planning and not resorting to regular income to pay off the requirements.

• Choice of Funds

  Child plans usually invest funds collected from policyholders in capital markets to earn a higher return. However, they offer the insured or policyholder, the choice to choose the type of fund to invest their money depending on individual investment appetite and risk-taking ability.

  Those who are risk averse may want their funds to be allocated in debt, which offers more stability against market volatility. People who want to earn a higher return on investment may be fine with their investment being put into equity.

  Investment Options like Systematic Transfer Plan and Dynamic Fund Allocation help in safeguarding investments against market instability. These child plans allow for higher return investments in the initial years by putting the money in equity-oriented firms and for stable growth in the later years by switching to the more secure debt funds.

  Most insurance companies ensure that the allocation is automatic and the parents do not have to worry about safeguarding the important capital to meet the upcoming future expenses of their loved one.

  These tips are only some pointers, which will help in choosing the best child plan. It pays to start early in securing the child's future. Also, reading up on child plans on our site and on the insurance companies' websites will ensure you know your ABCs before you pick the right plan.

• A Word of Caution

  It is important to choose a trusted appointee for the best child plan selected by you. Your appointee must be someone you share a strong relationship with and someone you can count on, as your child must be taken care of when you are absent. In case of an unfortunate event, the claim amount is received by the appointee till the child gets matured and capable of handling the lump-sum payout of sum assured. In case the appointee fails to take care of the child and turns out to be excessively careless, there are chances that the amount of money being exhausted before the child reaches the age when he/she needs it the most. So, it is best to be double sure before you choose an appointee for the policy.

• Illustration

  You bought the best Child Plan for your 6-year-old kid with 10 years of policy term while expecting to receive the maturity benefit of Rs 20, 00,000. You opted for a life cover of Rs 25, 00,000. Unfortunately, you died after 4 years the policy began. The insurer is liable to pay the appointee a sum of Rs 25, 00,000 and also to bear the premium to be paid for the rest of the policy term left, i.e. 6 years. The child will also get the maturity benefit of Rs 20, 00,000 once he reaches the age of 16 years.

Child Plan vs Sukanya Samridhi Yojana vs PPF

Cost of Delay

So, if you have a child who is 5 years old. Let us see the cost of delay if you start saving the money today as compared to the next year.

Following values are calculated at an expected rate of return of 9%.

Let Us Help You

At PolicyBazaar, we take pride in helping parents like you to ensure a bright future for your children. Every child is unique and so are his insurance needs. Who knows, your children might turn out to be future Einstein or Tendulkar. Make sure you financially equip your child to tap the opportunity when it knocks.

There are many variants of Child Plans as per your budget and needs; thus, it is always advisable to compare insurance quotes from various insurers. An online comparison makes it easy for you to match quotes with your specific needs and go for the best child education plan.

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