Why Child Education Plans Are Important for Long-Term Planning?

Written by : Knowledge Centre Team

2025-12-13

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Planning is necessary when you are out to achieve a larger-than-life goal. Higher education, as essential as it may be for your child’s future, is now a larger-than-life goal. Even when rising at a meagre 2.5% a year, fees for the prestigious management degree from one of the best colleges will be around ₹1 crore 15 years from now.

That’s why child education plans have gone from being optional to essential. These plans are tailored to ensure that your child’s academic journey is never hindered by financial roadblocks. In this blog, we’ll explore why investing in a child's education plan is not just smart; it's necessary.

Key Takeaways

A child education plan helps you stay ahead of the rising inflation by enabling early and goal-focused savings.
Child education plans that allow equity exposure give your savings the potential to grow faster than education costs.
With features like 'Premium Waiver' or 'Goal Protection', child education plans ensure that the investment continues even if you're no longer around.
Regular investments toward a defined goal foster discipline, structure, and clarity in family finances.
Modern child plans offer systematic transfers and portfolio rebalancing to help you reduce risk as you near your goal.

Why are Child Education Plans a Necessity Today?

Planning for your child’s education is no longer a choice but a necessity in the current economic situation. With rising education costs, unpredictable career paths, and life’s uncertainties, it becomes crucial to have a structured financial plan to secure their future. Child education plans are designed specifically to address these challenges and ensure that your child’s dreams are never limited by financial constraints. Here are five compelling reasons why investing in a child's education plan should be on your priority list today.

1) Rising Cost of Education:

Inflation in education is a well-known fact. The world’s best institutions have seen tuition fees rise by up to 5% per annum in recent years, which is slightly lower than the increase seen in the early years of the decade.

Child education plans offer the option to invest in equity markets, which is one of the most effective ways to beat inflation over the long term. By investing in equity through a reliable child education plan, you can benefit from market growth while managing risks efficiently.

Such plans also provide features like systematic transfers and automatic portfolio rebalancing, helping you manage your investments confidently as market conditions change and ensuring your child’s education fund grows steadily over time.

2) Uncertainty of Future Work Environment:

Technological replacement of otherwise human roles is a worldwide trend today. The extent of these replacements, however, remains a mystery. One thing which is clear from the progress so far is that higher education only paves the way for additional learning needs.

For a stable career and consistent growth, future professionals will need to continually upgrade and learn new skills as professionals. The other line of careers that has spun up from increasing mechanisation is entrepreneurship.

Turning a small but high-demand concept into a profitable venture is the trade of the day. However, it can be financially taxing at least for the first few years of operations but nonetheless, rewarding.

You can plan for these uncertainties related to your child’s career with a good child insurance plan.

3) Safeguard Against Uncertainties in Life:

While the future profession is uncertain, life is no different. The biggest threat to the dreams of your child and family is your untimely demise. Fortunately, you can take care of their financial security with the help of insurance plans like term insurance.

However, when it comes to the goals of your child, you can safeguard them separately. Child education plans have the option to continue investing in the intended goal even after your death.

For example, if your goal was to accumulate ₹50 lakhs in the next 20 years, with a child plan, you can ensure that the money is available to the child even if you do not survive the term. The insurer continues to invest on your behalf as you would have done if you were alive until maturity.

Thus, using a child plan helps you ensure that your child receives the financial support to complete their educational goal.

4) Avoid Borrowing for Education:

Education loans may sound like a more logical solution for the higher-education goal due to their tax-saving benefits. Tax benefits or not, you still need to pay interest on the education loan. Also, given the uncertainty of employment and income after education, your child may start a career with a huge liability.

When you have lots of money in your pocket, it does not matter even if you borrow a small amount because it will be beneficial to you. However, math like that is what you are supposed to perform once you reach the target. With the expenses increasing, you might still have to borrow even when you have saved with the aim. Therefore, why not make sure that you can maintain your borrowings to a minimum?

5) Promote Entrepreneurship:

Raising capital is one of the greatest challenges for entrepreneurs today, and it is unlikely to change in the future. Inventors and innovative young thinkers usually end up forfeiting a large part of their ownership stake in the business for additional funds.

Imagine if you could fuel your child’s entrepreneurial ambitions in the beginning. Their path to financial freedom would be shorter by that much. Plus, all of this can add to the family’s prosperity.

Invest in Your Child’s Dreams Now

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How to Start Investing in a Child Plan?

You can start investing in a child plan from the comfort of your home or office. Follow the steps below to start investing in your child’s future:

Estimate your goal value: The amount you will need when your child starts higher education
How much can you invest now
Visit the plan page (child education plan by Canara HSBC Life Insurance)
Complete the application and check the premium
Select the mode of premium payment. You can opt for the monthly mode if you are salaried
Select the premium payment term and benefits
Make sure to opt for the ‘Goal Protection Option’. This option will ensure that the planned investment continues even if you are not there anymore.

The Role of Discipline in Child Plans

Child education plans instil financial discipline. They:

Ensure regular investments towards a goal
Provide clarity on long-term objectives
Teach children about planning and consistency

This discipline, when taught to children, prepares them for structured financial management in adulthood.

Final Thoughts

Investing in your child’s education is one of the most meaningful financial decisions you can make. With education costs rising every year and the future job market becoming increasingly unpredictable, planning ahead is not just wise, it is essential. Child education plans empower you to build a secure fund for your child’s dreams without burdening them with loans or limiting their career choices.

Canara HSBC Life Insurance offers child education plans that help you beat inflation through equity investments while safeguarding your goals with features like systematic transfers, portfolio rebalancing, and goal protection options. This ensures that your child’s education continues seamlessly, even in your absence.

By starting early and investing consistently, you can give your child the confidence, security, and freedom to pursue any career they desire. Let your financial planning today create a strong foundation for your success tomorrow.

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.

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