Blog Details
.jpg)
As a parent, providing quality education to your child is one of the most valuable investments you can make. With the rising cost of education in India and abroad, a well-structured child education plan ensures that your child’s future is financially secure, no matter what life brings.
This blog will guide you through the importance of a child education plan in India, compare the best child plans, and help you understand how to choose the right one using online tools like a child education plan calculator.
A child education plan is a financial product that combines savings and insurance to secure your child’s academic future. These plans are specifically designed to provide funds at critical stages of your child’s education, such as college admission, professional courses, or studying abroad.
It serves two purposes:
Helps accumulate funds over time to meet future education expenses.
Offers life insurance cover to protect the child in case of the policyholder’s untimely death.
Let’s consider the key reasons why investing in a child education plan in India is essential today:
Education inflation in India ranges between 10% and 12% annually. The cost of engineering, medical, MBA, or foreign education has tripled in the past decade.
A child education plan ensures that your child’s education is not affected even in your absence, thanks to the waiver of premium and insurance coverage.
You get tax deductions under Section 80C and maturity proceeds are tax-free under Section 10(10D) of the Income Tax Act.
Early investment in child plans benefits from long-term compounding and wealth accumulation, ensuring you meet future educational needs on time.
There are various types of child education plans in India, each catering to different risk appetites and investment goals.
ULIPs invest in equity and debt funds and are ideal for parents looking for higher returns with market exposure. They offer the flexibility to switch between funds and monitor performance.
These are traditional plans offering guaranteed returns and bonuses over time. They suit risk-averse investors.
These plans provide periodic payouts at important education milestones (like age 18, 20, and 22) to support college and higher education expenses.
Here are the primary benefits of investing in a child education plan:
Maturity Benefit: A lump sum payout at the end of the policy term for college fees or higher studies.
Waiver of Premium: If the policyholder dies during the policy term, future premiums are waived, and the child still receives the policy benefits.
Partial Withdrawals: Some plans allow partial withdrawals during emergencies or educational milestones.
Loyalty Additions and Bonuses: ULIP-based and traditional plans offer loyalty additions and annual bonuses to boost returns.
Customizable Payout Options: Based on your child’s age, you can plan for staggered or lump sum payouts.
Let’s explore some of the best child education plans in India that are highly rated for their performance, flexibility, and coverage.
Type: Traditional, Participating
Key Features:
Guaranteed payouts at age 18, 20, and 22
Maturity benefit at age 25
Bonus additions
Ideal For: Conservative investors who prefer guaranteed returns
Type: Traditional Endowment Plan
Key Features:
Choice between money-back and endowment options
Waiver of future premiums upon death of the policyholder
Multiple plan options based on your child’s education timeline
Type: ULIP
Key Features:
Market-linked returns
Multiple fund options
Wealth boosters and premium waiver
Ideal For: Investors with a long-term horizon and moderate-to-high risk tolerance
Type: Individual, Non-linked, Participating
Key Features:
Life cover and education benefits from age 18 to 21
In-built accidental total permanent disability benefit
Tax savings under 80C and 10(10D)
Type: ULIP
Key Features:
Flexibility to choose premium amount, tenure, and fund options
Loyalty additions after the 10th policy year
Suitable for long-term education planning
When choosing the best child education plan, consider the following factors:
Investing when your child is young gives you the advantage of compounding and reduces the burden of high premiums later.
Use a child education plan calculator to forecast how much you’ll need for school, college, and higher education.
If you’re comfortable with market fluctuations, ULIPs are a good option. If not, go for traditional plans with guaranteed returns.
Pick a plan that allows customized payouts aligned with your child’s academic milestones.
Always opt for plans that offer a waiver of premium in case of the policyholder’s death to ensure uninterrupted policy benefits.
A child education plan calculator is a tool that helps estimate the required investment amount based on your child's age, expected inflation, and the future cost of education.
Enter your child’s current age
Select the expected age at which your child will need funds
Enter the expected education cost
Get an estimate of the monthly or annual premium you need to invest
This tool is easily accessible on most insurance company websites and helps in effective planning.
Today, purchasing a child education plan online is more convenient and efficient than ever. Here's why online plans are preferred:
Easy comparison of features and benefits
Quick premium quotes
Access to tools like calculators and policy illustrations
Paperless application and instant policy issuance
Better transparency and reduced policy costs
Always compare multiple plans before finalizing the best one for your needs.
The LIC child education plan is one of the most popular and trusted in the country, with a wide network and a high claim settlement ratio.
Stable and guaranteed returns
Government-backed credibility
Bonus additions
Loan facility available on policy
Parents looking for a low-risk, long-term savings option often prefer LIC due to its reputation and reliability.
Avoid these pitfalls while choosing a child education plan in India:
Starting Late: Delaying investment leads to higher premiums and lower corpus.
Ignoring Inflation: Not adjusting for inflation will leave you underprepared.
Opting for Low Returns Only: Not including market-linked investments can lower overall wealth creation.
Skipping Premium Waiver: Missing this feature could disrupt the plan in case of an emergency.
Not Reviewing Plan Performance: Regular reviews help in rebalancing and adjusting to life changes.
Ravi, a 32-year-old IT professional, invested in a ULIP-based child education plan online when his son was 2 years old. He used a child education plan calculator and chose a monthly premium of ₹7,000. In 15 years, his projected fund value is ₹28 lakhs, enough to cover his son's engineering education.
By starting early and choosing the right mix of investment and protection, Ravi ensured his child’s future without compromising his current lifestyle.
Choose long-term policy durations to reduce premium burden and increase maturity corpus
Top-up when you receive bonuses or salary increments
Monitor ULIP fund performance annually
Set clear education milestones and align payouts accordingly
Rebalance your portfolio as per market performance and risk changes
Choosing the right child education plan is a critical step in securing your child's future. Whether you choose a LIC child education plan, a ULIP, or any other policy, ensure it aligns with your long-term educational goals.
Compare various child education plans online, use a child education plan calculator, and consult a financial advisor if needed. Remember, it's not just about saving money, but about building a secure future and giving your child
Ideally, when the child is below 5 years old. This allows sufficient time to build a solid corpus.
Yes, most insurers provide online platforms to compare and purchase child education plans with ease.
Most maturity amounts under child plans are tax-free under Section 10(10D), provided they meet certain conditions.
ULIPs offer market-linked returns and flexibility, while traditional plans provide guaranteed benefits. Your choice depends on your risk appetite.
.jpg)
