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5 Tips for Building Your Childs Overseas Education Corpus

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Tips for Building Your Child's Education Corpus Abroad
January 05, 2024

Table of Content

 

In this policy, the investment risks in the investment portfolio is borne by the policyholder    

For quite a few decades now, overseas studies have been a favourite choice for many. The pandemic years were a dampener, but normalcy returns, the beeline for foreign universities is back with a new lease of excitement. However, several Indian parents are still sceptical about sending their children overseas for higher education, because of the hefty costs involved. This obstacle can be overcome if you have the right plan in place and build your child’s overseas education corpus wisely. Getting a child insurance plan is one of the effective ways of putting these worries to rest. 

  • Overseas education at a glance: top 3 countries

Many countries these days offer good and relevant courses. However, when it comes to student’s preferences, the USA, the United Kingdom and Australia still conquer the top 3 spots on the list. Here’s a glance at the education costs in these countries. 

USA:

In Indian currency, living in the USA requires Rs 7 lakh a year on average, while for the post-graduation courses, the average academic cost is Rs 25 lakh for 2 years. Thus, one needs a corpus Rs 40 lakh to fund a course in the US. 

UK:

One needs approximately Rs 9 lakh for living expenses and Rs 15-30 lakh for the course of your choice in the UK. 

Australia:

Approximately, Rs 12 lakh are needed as living expenses, while the course fee for a post-graduation course can be in the range of Rs 25 lakhs or more. 

  • Why building a corpus is needed for the overseas education of your child

Studying abroad has always been a costly affair. Getting admitted to the top foreign universities, and continuing with the course requires a large fund as the costs in foreign currency convert to big chunks of money. Surely this can be a massive burden on the parent if he/she tries to accumulate the funds when the child nears the age to get admitted to an overseas university. This is where building a corpus over time in the right strategy can help. Keeping in mind the target year of admission and the inflated course fees in future, start saving and growing your money through a child insurance plan at least 10 years earlier. A corpus will be ready to fund your child’s dreams at the ripe time, without making you struggle financially. 

  • The five tips

A corpus for your child’s overseas education can’t be built overnight. It takes years of saving and investment to accumulate the money as well as a proper and effective strategy to arrange for the same. Here are five tips to go about the child insurance plan. 

Start early:

Like any other investment, starting early has its perks here. The earlier you start, the lower will be premiums. Similarly, with the power of compounding in place and the nature of market returns, your investment will also get ample time to grow and match your child’s needs. 

Investment options:

When it comes to picking a child insurance plan, there are choices aplenty in the market. Be wise, analyse your needs and target and choose the one that best fits your case. A Unit Linked Insurance Plan (ULIP plan) in this case can help you build a corpus over the years through systematic investments. Depending on your affordability and convenience, select the ULIP plan that lets you invest in a diverse portfolio with different financial instruments. 

Risk management:

A long-term investment can come across quite a few rounds of turbulences in the market. It’s necessary to have a lesser share of risky investments when the market is down to avoid losses while a higher amount of equities in your portfolio during the up phases to fetch bigger returns. It’s therefore crucial to keep making fund switches in your portfolio for better risk management. Some Child ULIP plans offer automated risk management to insulate you from such fluctuations. 

Automatic savings and investment:

Saving when you have a lump sum at hand doesn’t help much in building a corpus. Instead, planning a monthly or yearly amount and automating the process through a child plan can make you save in a disciplined way. A good ULIP Calculator can help you find the best ULIP plan that will suit your requirements. By the time your child grows up, the corpus is ready too!

Monitoring the progress of returns:

It’s not just about investing in different funds through a child insurance plan. It’s equally important to keep monitoring how your funds are performing. Keep a regular eye on the returns and restructure your portfolio, shifting the money from low-performing ones to those with better results as required.

Now that you know the tricks of the trade, building the desired fund through child insurance won’t be rocket science anymore. Right?

Related Articles

Source:

https://www.shiksha.com/studyabroad/country-comparison-us-vs-australia-guidepage-1089

https://leapscholar.com/blog/cost-of-studying-in-uk-for-indian-students/

ARN - ED/12/23/6642

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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The Unit Linked Insurance products do not offer any liquidity during the first five years of the contract. The policyholders will not be able to surrender or withdraw the monies invested in Unit Linked Insurance Products completely or partially till the end of fifth year   

For more details on risk factors, associated terms and conditions and exclusions please read sales brochure carefully before concluding a sale. Unit Linked Life Insurance products are different from the traditional insurance products and are subject to the risk factors. The premium paid in Unit Linked Life Insurance policies are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. HDFC Life Insurance Company Limited is only the name of the Insurance Company, The name of the company, name of the contract does not in any way indicate the quality of the contract, its future prospects or returns. Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document of the insurer. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns.

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