Your child may want to become a chef, an athlete, a filmmaker, an engineer, a doctor, or may want to pursue a career of his or her choice. As a parent, you would want to provide the best education to your child. With the rising cost of education in India, you would need a substantial amount to be able to provide the desired education to your child.

Below are a few examples to understand this better:

Let us say that your child has started education now.

In order to pursue an Engineering degree from a premier institute in India, your child would require ₹ 4 lakh per year as on today¹. For the four-year degree course, that would amount to ₹ 16 lakh.

Assuming a 6% rate of inflation in the cost of education over the next 15 years, the same would cost approximately ₹ 10 lakh per year, which would amount to ₹ 40 lakh for the four-year degree course.

Similarly, the approximate cost of pursuing a medical degree in a premier institute in India, today is approximately ₹ 10 lakh per year². This would mean the total cost of pursuing the degree over five years would amount to ₹ 50 lakh.

Assuming the same 6% rate of inflation in the cost of education, the same would cost a total of ₹ 1.2 crore after 15 years.

Please note that the above calculation does not include primary and secondary education costs and other expenses.

Factors to consider while estimating the cost for your child’s education

• Tuition fee:

  This is the most basic of fees required for any education. This will vary depending on the type of course, university and more. For example, primary and secondary school fees can range approximately between ₹ 30,000/- to over ₹ 10 lakh per year³. Tuition fees for MBA can range approximately between ₹ 20,000/- to ₹ 25 lakh per year⁴

• Accommodation:

  Students who get admitted to colleges far away from home typically require accommodation close to their place of study. This brings in an additional cost

• Other expenses:

  Beyond the usual tuition fee and accommodation, there are many other costs that you will have to incur during your child’s education. These costs include expenses towards books, utilities, cost of materials, food, transportation, and more

Reason for the rise in cost

Inflation is one of the key factors for the rising education cost in India. Along with this, better infrastructure, increasing use of technology and choice of various courses are factors that lead to an increase.

How does a child plan help you in this situation?

With the rising cost of education, it is important to plan ahead to be able to fulfil your child’s education needs. A child plan can help you stay financially prepared to be able to meet the education needs of your child.

Child plans offer life cover^{^} as well as helps you save money towards your child’s goals. You can choose to pay the premiums towards the plan monthly, half-yearly, yearly or all at once as per your convenience. At the end of the policy term, it provides a lump sum amount that can be used to fulfil your child’s financial needs.

In case of an unfortunate event during the policy term, your child will receive a lump sum amount. Additionally, the company will pay all future premiums on your behalf so that your policy remains active and your child receives its benefits. This ensures that your child’s future is secured, no matter what.

Child plans come with features such as:

• Life cover^{^}:

  In case of an unfortunate event during the policy term, a child plan provides a lump sum amount that can help fulfil your child’s dreams

• Waiver of premium benefit:

  In case of an unfortunate event during the policy term, the company waives off all future premiums payments. This keeps the policy active till the policy term and provides the maturity benefits to your child

• Partial withdrawals:

  You can withdraw a portion of the amount you have invested during the policy term in the form of partial withdrawals. This option helps you take care of your child’s educational milestones and other expenses

• Tax^* benefits:

  A child plan offers tax benefits for the premiums paid towards the plan under Section 80C of The Income Tax Act, 1961. The payouts received from the plan are also tax-free^* as per Section 10(10D)^*

Conclusion

Your child’s goals may change with age. As a parent, it is best to stay prepared financially, always. A child plan offers dual benefit of protection as well as growth of your money to ensure a secured future for your child.

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