Education expenses for higher studies have been rising rapidly in line with the high inflation in the education sector.
Hence, it is important to start investing early on a regular basis to support your child’s future with a child insurance plan.
Here are 4 important steps to help you plan for your child’s higher education;
Identify your child’s interest
This is the most important and basic step as all additional steps depend on what your child wants to do after growing up.
Abhishek Misra, CEO and Principal Officer, Bonanza Insurance says, “Today people are opting for professions, unheard of earlier like social media influencers, drone pilots, artificial intelligence consultants etc. A child might dream of becoming a pilot or an artist.”
Irrespective of whatever profession one is interested in, experts say as a parent it is important to motivate a child about the goal on a regular basis so that the focus is not lost down the line.
Identify the institutions and education costs
Higher education costs for different types of education vary from institution to institution as well as country to country. For instance, Misra points out “education costs for MBBS degrees in west European countries like UK and Germany may cost a bomb, it is quite cheaper in east European countries like Georgia and Poland.”
Nevertheless, it is important to choose an institution of repute as a child’s entire career hinges on it.
Keep inflation in mind while calculating the costs
Currently, due to rising inflation in education, the costs that are applicable for higher education, Misra says “will increase by approximately 100 to 200 per cent or even more by the time a child grows up.”
For example, if the cost of a commercial pilot course costs approximately Rs 50 lakh in India today in a private institution, the cost of the same would be approximately 1 crore to 2 crore rupees after 15 -20 years.
Choose the right investment for achieving your goal
“Child’s higher education is a goal that cannot be compromised under any circumstance. Hence, it is important to choose an instrument that can offer assured returns when the actual time arises,” explains Misra.
There are plenty of investment options available in the market. However, not all offer assured returns. Some investments come with high risk with zero capital protection.
On the other hand, when you invest in a child insurance plan you can know the benefits beforehand, as they are clearly defined. When you invest in a child insurance plan of a sum assured of Rs 50 lakh, the actual payout would be 50 lakh rupees plus accrued bonuses.
“Careful planning and disciplined investing in the right investments can go a long way in helping your children achieve their dream career,” adds Misra.
As a child’s higher education is a long term goal, the time horizon is long and even a small investment on a regular basis can help you in creating a large fund to support your child’s dream.