Child Education Cost Planning Calculator

A child education plan offer tax benefits on both premiums paid and policy benefits received on maturity and throughout the policy term. Section 80C of the Income Tax Act allows tax deduction on the premium you pay for a child education plan up to a limit of Rs.1.5 lakh. The benefits obtained during the policy term and at the end of the policy period are tax-free under Section 10(10D).

Child education cost in real terms is the amount of money you will need in the future when your child starts his/her education. So, if you want to plan for an MBA from a top Indian institution for your child, you need to consider the current cost of the course there.

This current cost will be inflated for the period available for the goal at the prevailing inflation rate. So, a course which costs Rs. 10 lakhs today may cost about Rs. 21 lakhs in 15 years if the applicable inflation is 5% p.a.

Higher education for your child is one of the largest financial goals in your life. Also, you get less time to save and invest for the goal, i.e., 10-15 years. Thus, you can start investing about 10% of your income towards this goal if you have not fully planned the goal.

However, you should try to use an online child education calculator to expedite your planning effort and check if 10% of your income will be sufficient.

Although you can invest in several long-term investments, child plans from life insurance companies could be a better option. Public Provident Fund (PPF), equity-linked savings schemes (ELSS), etc. are long-term investments that will also give tax benefits.

But these saving schemes will need continuous investments from you to help your child achieve his/her education goals. However, a child plan goes a step further and apart from all other benefits, provides safety to your child’s goal in your absence.

Child plans from Canara HSBC Life Insurance ensure that all due premiums are invested in the life insurance policy in case of your early demise. Thus, your child’s goal remains safe with you and even without your presence.

First, you should try to understand the several expenses associated with the education you have planned for him/her. Usually, higher education expenses include the cost of accommodation, lifestyle expenses, and commutation costs along with the tuition fees.

Once you have arrived at a number for the total expected expense, you can use a free online child education calculator to estimate your monthly savings amount.

Learn how to build an education fund for your child.

Life insurers provide child education plans which are special investment options designed to help you meet your child’s important life goals. Child education plans not only offer an investment venue as per your risk appetite but also offer safety for your child’s goal.

Child education plans from Canara HSBC Life Insurance enable the insurer to continue investing the due premiums in the plan if you cannot be there to fulfil the goal. Your child will receive the money as per intended maturity.

Child education plans are life insurance plans with features to safeguard your child’s higher education goal. You have the option of investing in two types of child education plans – Unit linked child plans (ULIP child plans) and Guaranteed Savings Plan.

ULIP child plans give you the flexibility to invest aggressively and manage your portfolio. A guaranteed savings plan also called endowment or money back plan, will offer guaranteed maturity value. Both plans offer life cover and goal protection features.

The best investment plan for a child is one that allows the saved money to beat inflation, taxes, and possibly the risk of your early demise. Life insurance child plans are some of the most versatile saving plans you can use for your child. These plans offer multiple investment options based on different risk appetites and protection for the child’s goal.

College education for undergraduate levels can cost up to Rs. 20 lakhs today depending on the institution and the type of the course. Thus, if you plan to provide such education to your child 10 – 15 years later, you need to start saving now.

Use the child education plan calculator to estimate your monthly saving need for the goal and start investing in a plan of your choice.

Education and marriage are two different goals for your child. While education may cost a large sum of money over a few years, marriage is a one-time expense. You will need to start saving and investing for both the goals as early as possible, usually at childbirth.

Keeping both investments separate will be more practical as you approach one goal after the other. While marriage expenses can be budgeted, education may need additional funds or may even work without using the entire amount.

So, use the child education planner to plan for your child’s higher education goal, and marriage goal separately. Save and invest the respective amounts in two different plans for easier management in the future.

Child plans are better suited to achieve your child’s future goals, as they offer financial safety options for the goal along with the investment growth. Thus, you should prefer child plans if financial safety is a concern you need to address for the goal. Otherwise, you can use any other long-term investment options and ULIP plans to save for your child’s goal.