This document discusses strategies for planning and funding a child's education. It recommends starting a recurring deposit account early and consistently saving to build funds for higher education costs. It also recommends investing in a child education policy, which is a life insurance product that saves and provides funds for college. The document outlines the features and types of child education policies, including endowment policies and ULIPs, and factors to consider when selecting the best policy like affordability, returns, and benefits. It provides tips for analyzing policies and choosing one that suits the child's goals.

1. CHILDREN’S EDUCATION PLANNING
Presented by:-
Sumit Behura
Nihar Ranjan Panigrahi

2. INTRODUCTION
• Every parent’s wants to give best potential for their
children and ensure the best future for them.
• There was a time when parent’s didn’t have to plan much
for their children’s education. But “time and tide wait for
none”, the children progress in education in the school will
be very fast and day will come very soon when they are
ready to take professional courses. At this time requires
money for payment of college fee, hostel fee, deposit for lab
and library, cost of book and equipment.
• Start saving early and to be consistent in saving are the two
factors in achieving the children’s bright future.
• The choice of financial product for planning the children’s
future depends on the risk and safety of the investment and
time available. One should have a good balance of risk and
safety when it comes to planning for a child’s future.

3. Strategies for children’s education plan
There are many strategies for managing
education costs for those who want to plan in
advance.
1. Cost of education:-
There are direct cost like tuition fees and other
studies related expenses and indirect cost like
hostel fees, mess fees transportation fees, etc
and these expenses have to be factored to take
care of inflation also.

4. 2. Planning:-
There are many ways to fund the children’s education one
should invest according to goals and time frame into
managed funds, shares, insurances policies, term deposit
accounts, etc.
3. Monitor:-
The execution of the plan is to be closely monitored to
ensure that the desired amount is available at the right
time.
4. Options:-
There are various programs available to help parents to
fund their child’s education.
5. Insurance policies:-
While taking insurance policies for the children , covering
their life and also for critical illness, one should take into
account the cost of their higher education also.

6. BANK DEPOSITS
• When the child is born, the immediate attention of the parents
should be to prepare for the child’s future.
• The safest investment option is to open a recurring deposit account
with a bank for a long term(maximum period is ten year) and start
remitting the monthly instalment regularly.
• This will build up the funds require for meting higher education
expenses. if any lump sum amount is received by way of bonus,
seasonal business profit, gift from relatives during the child's birth
day, etc. this amount is to be invested in a cumulative term deposit
with the bank.
• The advantages of RD account will help in availing financial assistant
by way of educational loan from the bank for pursuing higher study.
Another advantages of RD account is that no tax deduction takes
place while paying interest.

7. CHILD EDUCATION POLICY
• According to a study, on an average, parents incur around 5.2 to
5.5% of there income on education expenses of the children. Also
the household save another 10 to 12% approximately of their
income for children.
• The child education policy provides the fund needed by the child in
pursue higher education and what ever happens to the parents in
the future, the child will still have the means to pursue education
without break and achieve his/her goals in life
• It is a life insurance product that is designed as a saving tool to
provide money when child reaches the age for entry into college.
the fund can b utilised to pay for child’s higher education
expenditure. under this policy the child’s life is insure. Child
education plan is a very useful plan to secure the child’s future.

8. FEATURS OF CHILD EDUCATION POLICY
• If the child is below 3 years, investment can be made for the next 5
years and this investment plan will take care of his primary
education.
• If the child is in secondary school, a small investment every month
for the first 6 years can be made in a plan of 10 years tenure.
• This plan work like an endowment plan under this plan maturity of
the policy , fixed amount is returned to the parent, if the parent
dies the child gets sum assured to continue the studies
uninterrupted if the parent survives, the sum assured is handed
over to the parent on maturity of the policy.
• If one wants a large lump sum when the child turns 15 planning
should be done to buy a 15 year policy when the child is born.

9. TYPES OF CHILD EDUCATION POLICY
There are two types of child plan that is endowment and ULIP
Endowment policy:-
• It is a combination of savings components with protection
coverage.
• These policy may be participate or non-participate.
• Non-participating policies do not participate in their life
insurance fund’s profit but all insurance benefits are fully
guaranteed.
• Participating policies have a portion of insurance benefits
guaranteed. the total amount of benefits at maturity is not
guaranteed because it depends on the insurance
company’s insurance performance.

10. ULIP:-
• A unit –linked policy is a combination of the
element of investment and protection based on
the requirement of the policy owner.
• It offers flexibility as one can increase monthly
premium contribution as his income level
improves.
• A unit-linked policy policy will allow the policy
holder to choose the type of funds the money
will be invested in. like any other investment ,
there are risk involved and there is no guarantee
on the returns, which may be higher or lower
than the amount projected.

11. ULIPs under child plan
• Decision regarding how much to invest in ULIPs is taken by
customer.
• ULIPs do not guarantee a return all the some assured is
guaranteed provided one has paid the premium regularly.
This is because in ULIPs investment is done in equity and
debt market.
• ULIPs are flexible and there flexibility is evident into two
features:-1. they allow individuals to switch across
indivisual,2. ULIPs allow a lager number of withdrals. In a
ULIP one can make many more withdrals during the trainer
of plan. Some ULIPs permit multiple withdral every year.
• In ULIP expenses as usually lower than endowment plans.

12. Factors to be considered for the best child plan
• Affordable premium
• A policy having flexibility so that the saving
can be gradually increased.
• Ensure that the payer benefit rider is opted
for.
• Adequate some required for the child’s higher
education cost.
• Rider benefits like health insurance, accident
cover.

13. • Competitive pricing and returns.
• Assured amount for the child in case of
parents’ death.
• Claim settlement history of the company from
whom the policy is taken.
• How much money one wants to set aside for
the child’s education.
• Less administrative cost.

14. TIPS WHILE ANALYSING A CHILD EDUCATION PPLAN
• ensure that payer benefit rider is opted for
Look for a policy that give up premium payment in the event the
parent untimely death, critical illness or permanent disability. By
opting for the payer benefit rider, the child's education fund will
be taken care of should anything happen to the parent.
• Monitors the fund
after the policy is taken it needs to monitored to ensure that the
insured on the correct path to reach the goals. Actual returns
declare by the insurance company may differ from initial
projection due to changes in financial market.
• Check whether the policy qualify for tan incentive
One of the advantages of using life insurance as a saving tool for
a child education is the tax benefit.

15. • Make sure that the premium is affordables
One needs to be practical in estimating how much he can
afford, based on his current income and expenses. If one
starts on an amount bigger than he can afford, he may
end of in terminating the policy and incur financial loss.
• Do not add unnessecery coverage
Many children’s education policy also offers the ability to
add insurance coverage like:- hospital and medical
insurance or critical illness coverage. One should be
careful about adding too much insurance coverage as the
cost will affect the amount of saving.

16. Steps to choose the best child plan
• Data collection about the policy
• Compare offers from major insurance
companies.
• Choose the insurance plan that best suits
child’s dreams.

17. TAX BENEFIT ON EDUCATIONAL LOAN
• The educational loan must have been taken from a financial
institution or any approved charitable institution for the
purpose of pursuing higher education so that it will be
eligible for tax benefit.
• One will get the tax benefit on an education loan only if the
loan is in his name and is taken for the purpose of higher
education of self or spouse or for children.
• The tax benefit can be availed only on the interest paid not
on the principal.
• One cannot claim tax deduction if he has taken loan from
his employer or family, or friends. he can get tax benefits
only if the loan is from a financial institution, bank or
approved charitable institution.