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Why do Parents Need to Plan For Their Children’s Education?

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Chocolates and gadgets are temporary gifts, but a Child Education Plan is a lifelong gift!! It is a plan that will set their future and they could do any course they wish to when it comes to Higher Education.

Without worrying about finances you will eventually open so many doors of opportunities for your child to explore!

What is a Child Education Plan and why does it hold such significance?

India’s literacy rate has increased from 12% (pre-independence) to 77.7% (currently). Increased literacy increases the per capita income of people (meaning their ability to earn higher income). Indians have seen that with increasing education, the lifestyle of people has changed for the better. All parents desire that their children have a better life than theirs.

Most parents think or even live with the idea that they will be working and when the time comes they will fulfill or fund their children’s education. But when the real goal comes in, sometimes they become successful, and sometimes they are not.

If their child passes or gets into a government-funded college on merit then we could say that parents can successfully fund it. But when their child despite being good, fails to get into a government-funded college, then funding them for either private college or foreign colleges becomes challenging.

Thus, the rise in the competition for getting into government-funded colleges has become a challenge itself. Secondly, many children might wish to pursue an expensive course to fulfill their dreams. This is where the need for having a child’s education arises.

Why do parents need to plan for their children’s education?

There are two reasons why parents need to plan for their children’s education well in advance. The cost of education at government colleges is significantly lower when compared to private colleges. So, if the student manages to get a seat in a government college, then funding the higher education becomes less of a concern.

1. High Competition

Indian students face a lot of competition. There are only 45000 medical seats for which about 12 lacs students appear for the NEET exams. A similar story is with top engineering colleges.

2. High Education Inflation

The education inflation is closer to 12% annually.  For example, the cost of an engineering course nowadays is around 25 lakhs. But since your child is of 1 year and you’ll be needing the amount when he turns 18. With inflation of 10%, the estimated cost you’ll be needing for your child will be around 1.26 crores. A monthly SIP of 20k would be needed to reach this amount.

3. The combined benefit of Education and Protection

Child education plan serves two purposes one, education and protection through ULIP plans that offer the dual benefit of insurance and investments. With this, you not only get an investment option, but you are also protecting your child from all eventualities in life.

While purchasing a child’s education plan, one should make sure to get insurance for their plan, to be on the safer side. So if god forbid the breadwinner dies, insurance will ensure that your child will get the premium amount once he/she is of that age.