How to Structure Child Plan Payouts for Key Education Milestones?

2025-07-16

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Every parent has a dream to provide the best education to their child, but what if financial hurdles derail these aspirations? Without proper planning, the rising education costs become a major hurdle in life. A well-structured child education plan ensures right funds available at the right time. In this blog, we‘ll discuss how to structure payouts effectively to match different education milestones.

Key Takeaways

Use a child education plan calculator to estimate costs for different milestones.
Structure payouts based on education needs – smaller for school, larger for college.
Choose a Unit-Linked Insurance Plan (ULIP) for flexibility in withdrawals.
Opt for premium waiver benefits to secure your child’s future.
Regularly review and adjust the plan to match inflation and changing education goals.

Understanding Education Milestones

A child's education journey consists of different milestones. From primary schooling to higher education, each phase requires a planned investment strategy. Understanding these milestones helps in structuring payouts effectively and ensures a smooth educational experience for children.

Education Milestones	Age Years	Common Expenses
Primary Education	3-10	School fees, uniforms, stationery, activities
Secondary Education	11-16	Tuition fees, books, coaching, school trips.
Higher Education	17-18	Coaching, entrance exams, application fees.
Graduation	18-22	College fees, hostel expenses, study materials
Post Education	22+	Higher education abroad, special courses

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Steps to Structure Payouts for Different Milestones

Assess Future Education Costs

To assess the future education costs, parents need to consider the following factors:

Calculate the current cost- Determining the current education cost based on current market value. For example, if parents want to send their child to the US to study, they should calculate the current cost of going abroad. They can also get help from education counsellors who help assess the true cost of studying abroad.

Determine the number of years- Parents should assess how many years they have to save for their child’s education. The more years they have, the greater the opportunity to save a larger amount.

Consider the rate of inflation - Estimation of education costs based on the current scenario is not feasible. It is vital to consider the inflation rate because it helps to determine the correct estimations.

Use child education Plan calculator- This tool helps parents to determine how much money to invest in their child's future education.

Choose a Suitable Child Education Plan

Selecting the right child education plan is crucial for ensuring a child’s education needs. The child education plan by Canara HSBC Life Insurance offers a combination of investment options and life insurance. This plan acts as a collateral for higher education. During the maturity period, the child plan pays a lump-sum amount that can be used by parents for higher education and marriages.

Child Education Calculator

A smart online tool that helps you easily navigate the costs of your child's future education, ensuring their dreams come true.

1 About my Child

2 My Child’s Dream and Needs

3 Additional Details

4 Our Recommendation

My child's name is {name} {name} age is {age} years (Current age)

{name} would like to do

Engineering

Medical

Law

MBA

Fashion Designing

Hotel Management

Architecture

Others

Current cost of doing {career} is {cost}

My current savings for {name} are {savings}

I need the money when {name} attains age {money}

My name is {name}

my mobile number is {mobile}

You start investing when {name} age is: {initialAge} years

Maturity amount received by {name}

{name} becomes an {career} Professional

For {name} Education as: {career}

You should start saving

{maturityAmount}

For remaining {remainingYears} years

To create a sum of {totalamount}

View Now

*Disclaimer-

The above calculation and illustration of figures are indicative only and not on actual basis.

Did You Know?

You can claim tax benefits even for nursery, crunches, and play school fees.

Source: Clear Tax

Align Payouts With Major Expenses

To prevent last-minute borrowing situations, parents should align their payouts with major expenses.

Smaller payouts are utilised for early educational expenses, such as school fees, coaching, and extracurricular activities, without disrupting overall financial stability.
Larger payouts are reserved for higher education needs, such as university tuition, study materials, and living expenses. This ensures major costs are covered without requiring additional loans.

Opt for Partial Withdrawals In ULIPs

Investing in ULIPs plans helps in managing education expenses without affecting long-term savings. Partial withdrawals can be beneficial in meeting ongoing costs such as school fees, coaching entrance exams, or other education-related expenses.

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Conclusion

A structured child education plan helps parents secure their child’s academic future without financial stress. Aligning payouts with key education milestones ensures timely access to funds for school fees, coaching, and higher education. Using tools like the child education plan calculator and investment options such as Unit-Linked Insurance Plans (ULIPs) helps provide steady financial support.

Glossary

'Child Education Plan: A financial plan that helps parents save and invest in their child's future education expenses.
Unit Linked Insurance Plan: A life insurance plan that offers both investment and insurance benefits with market-linked returns.
Child Education Plan Calculator: An online tool to estimate the required savings for a child's education at different milestones.
Partial Withdrawal: Ability to withdraw a portion of invested funds from an insurance or investment plan without affecting policy.

FAQs

A child education plan is a savings and investment product that provides financial support to child's education at key milestones.

You can use a child education plan calculator to estimate the required savings for your child's education.

A Unit-Linked Insurance Plan (ULIP) is the best investment option for child education because it gives you access to partial withdrawals.

Yes, some plans, like ULIP, allow partial withdrawals that cover immediate education expenses.

If the policyholder passes away, the future premium will be waived, giving financial support to the child.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.