Educational Insurance Policies and Benefits in India
There are various types of insurance policies available in India, some of which are mandatory while others are optional. Here are some of the types of insurance in India:
- Life insurance: Life insurance policies provide financial protection to the policyholder’s family in case of their unfortunate demise. Life insurance, term insurance, and endowment policies are different types of life insurance policies currently being offered in India.
- Health insurance: Health insurance policies provide coverage for medical expenses incurred either due to illnesses or accidents. They can be individual policies, family floater policies, or group policies.
- Motor insurance: Motor insurance is mandatory in India as per the Motor Vehicles Act. It provides coverage against damages or losses caused to a vehicle due to accidents, theft, fire, or natural calamities. Third-party liability insurance and comprehensive insurance are two types on insurance policies currently being endorsed in India.
- Personal accident insurance: Personal accident insurance provides coverage for accidental death, permanent disability, or temporary disability due to an accident.
- Travel insurance: Travel insurance policies provide coverage against unforeseen events such as medical emergencies, trip cancellation, loss of baggage, etc. They can be individual policies or group policies.
- Crop insurance: Crop insurance policies provide coverage for losses incurred by farmers due to natural calamities, pests, diseases, or other factors affecting crop yields.
- Home insurance: Home insurance policies provide coverage for damages or losses to a house and its contents due to fire, natural calamities, theft, or other risks.
- Business insurance: Business insurance policies provide coverage for various risks faced by businesses, such as property damage, liability, business interruption, etc.
Types of Education Insurances Policies India
In India, several types of education-based insurance policies are available to help parents financially plan for their children’s future education. Here are some of the popular education insurance policies in India:
- Unit-linked insurance plan (ULIP): A ULIP is a market-linked insurance policy that offers the potential for high returns on investment. It allows policyholders to invest in equity or debt funds, and the policy returns are based on the performance of these funds.
- Child Education Plan: This is a type of life insurance policy that helps parents save for their child’s education. The policy provides a lump sum amount at the end of the policy term, which can be used for the child’s education expenses.
- Scholarship plans: Some insurance companies offer scholarship plans that provide financial support to children for their education. These plans offer regular payouts at specific intervals during the policy term.
- Savings plan: A savings plan is a traditional insurance policy that provides a guaranteed return on investment. It helps parents save for their child’s education expenses over a period of time.
- An Endowment Plan is a type of life insurance policy that provides both life insurance coverage and savings. The policyholder receives a lump sum amount at the end of the policy term, which can be used for the child’s education expenses.
It is important to compare different education insurance policies and understand their features, benefits, and costs before choosing one that best suits your financial goals and needs.
Benefits of Buying an Education Insurance Policy in India
Education insurance policies provide several benefits, including:
- Financial security: Education insurance policies provide financial security to parents by helping them save for their children’s future education expenses. In case of an unfortunate event, such as the policyholder’s demise, the policy benefits can be used to fund the child’s education.
- Guaranteed returns: Some education insurance policies offer guaranteed returns on investment. This provides a risk-free investment option to save for their children’s education.
- Flexibility: Education insurance policies offer flexibility in terms of premium payment and policy term. Policyholders can choose the premium payment frequency and policy term as per their convenience.
- Tax benefits: Education insurance policies are covered under Section 80C of the Indian Income Tax Act currently being used in India. The premium paid towards the policy is eligible for tax deduction up to a certain limit.
- Scholarship opportunities: Some education insurance policies offer scholarship opportunities to policyholders’ children. These scholarships can help cover a portion of the child’s education expenses.
- Encourages long-term savings: Education insurance policies encourage long-term savings for the child’s education. This helps parents plan for their child’s education well in advance and ensures that they have sufficient funds when the time comes.
- Inflation protection: Education insurance policies offer inflation protection by providing benefits that are adjusted for inflation. This ensures that the policy benefits are sufficient to cover the child’s education expenses, even if there is a rise in the cost of education over time.
Overall, education insurance policies provide a reliable and convenient way for parents to save for their children’s education and secure their future.
Cost of Education Insurance Policy in India
The cost of education insurance policy depends on several factors such as the type of policy, sum assured, policy term, age of the policyholder, and the child’s age. Here are some estimated costs of different education insurance policies in India based on the information available in the public domain:
- Child Education Plan: The premium for a child education plan can range from Rs. 10,000 to Rs. 50,000 per year, depending on the sum assured, policy term, and the child’s age.
- Unit-linked insurance plan (ULIP): The premium for a ULIP policy can range from Rs. 20,000 to Rs. 1 lakh per year, depending on the sum assured, policy term, and the investment fund chosen.
- Endowment plan: The premium for an endowment plan can range from Rs. 5,000 to Rs. 50,000 per year, depending on the sum assured, policy term, and the child’s age.
- Savings plan: The premium for a savings plan can range from Rs. 5,000 to Rs. 50,000 per year, depending on the sum assured, policy term, and the child’s age.
Caution When buying Education Policy
It is important to compare different education insurance policies and their costs before choosing one that suits your financial goals and needs. It is also advisable to consider the policy features, benefits, and the insurer’s reputation while making a decision.
There is no specific data available on the number of people who have benefited from education student policies in India. However, education insurance policies have become increasingly popular in recent years, as more and more parents realize the importance of financial planning for their children’s education.
Furthermore, education insurance policies have encouraged long-term savings and have helped reduce the financial burden of education expenses on families. While the exact number of beneficiaries may not be available, education insurance policies have undoubtedly played a crucial role in helping many families plan for their children’s education and achieve their financial goals.
Choosing one for your Child: The Education Insurance Policy
Choosing the best education insurance policy in India depends on individual financial goals, budget, and other requirements. Here are some of the popular education insurance policies in India that you can consider:
- LIC New Children’s Money Back Plan: This policy offers guaranteed returns and regular payouts to parents, helping them save for their child’s education.
- HDFC Life YoungStar Udaan: This policy provides a lump sum payout on the child’s 18th, 19th, and 20th birthday to help fund their education.
- SBI Life Smart Champ Insurance Plan: This policy offers regular payouts and a lump sum payment at maturity to fund the child’s education.
- ICICI Pru SmartKid Solution: This policy provides guaranteed returns and payouts to fund the child’s education at different stages of life.
- Max Life Shiksha Plus Super: This policy provides comprehensive coverage, tax benefits, and flexible premium payment options to parents for their child’s education.
It is recommended to compare the features, benefits, and premium rates of different education insurance policies before selecting the one that suits your financial goals and needs. Additionally, it is advisable to check the insurer’s reputation, claim settlement ratio, and customer reviews before making a decision.
