The top most priority of any parent is to provide their children very good education. Ten years back primary school used to chare Rs. 1,000-5,000 per year as fees. Today, providing a good education, establishing a professional career or even a modest wedding is extremely expensive. Now, if you want to send your kids to a good school in metro or other cities you have to pay nothing less than Rs. 40,000 every year as tuition fees. Even the higher education has become so expensive that you can manage quality education for 1 or 2 kids. All these engineering or medical or business or law colleges charge nothing less Rs. 4,00,000 per annum. Thus, you can see fees have gone up through the roof in the last few years. Imagine what will happen 10-15 years down the line when your kids starts going to colleges. The fees will be at least double of the current rates.

Unfortunately, in India most of us have not realized the importance and benefits of proper and timely educational planning. This is all because of lack of awareness, huge debts, low income, improper financial planning and lack of need based investment solutions. The right thing to prepare yourself for it is to start saving and investing in a good children insurance plan.

Thus, the reasons for educational planning

• To provide better and dreamed education to your child in the right time.
• To secure your child’s future even in case of any uncertainties like death, disability, loss of job etc.
• To accumulate required amount of money for your child’s education over a period of time through systematic and flexible investment plans.

These days, insurance policies play a key role in the financial planning activity revolving around the children. Insurance companies offer children’s plans which help parents fulfill their most important financial responsibility towards their children even in their absence – and that is financing their higher education. Children's insurance plans have several variants, the important ones being:

Policies that provide a certain percentage of the sum assured during the closing years of the policy, or a lump sum at its maturity, or the entire lump sum at the early demise of the person whose life is assured (the parent). Reversionary and terminal bonuses are paid at maturity.

Children’s endowment insurance plans under which, the life of the child is insured, and the sum assured is paid out at maturity (for example when the child attains the age of 18, 21 or 24 under different plans). Generally, these plans aim to support the financial requirements for higher education or marriage.

Unit-linked insurance plans allow the policyholder (parent) to choose their premium payment and investment options. The premium is invested in different financial instruments by the insurance company, and the accumulated sum is paid at the time of maturity. In the event of premature death of the policyholder, the assured sum is paid to the child and the insurance company will pay the premiums and continue the investments on the policyholder’s behalf until maturity.

Children’s plans are offered by both public and private insurance companies. Although the policies of different companies vary in the details, most of them have some common features like:
a. Aiming at securing the educational/marriage needs of the child.
b. Term period of 10-25 years.
c. The minimum sum required is around Rs. 50,000.
d. Most have no maximum sum limit.
e. This investment is tax exempted under Section 80C and Section 10 (10D) of the Income Tax Act, 1961.