Studying in a foreign university is every student’s dream. Given an opportunity, they would certainly like to pursue higher education in their dream university abroad. And considering how borders are not barriers anymore, an ever-increasing number of parents look for the best possible education for their children regardless of whether they need to send their youngsters to another country.
Fortunately, globalization has provided a level playing field for students all over the globe to engage themselves with top-quality education and learning. Hence, on the off chance that your child is excited about graduating from a prestigious institute such as Oxford, Harvard or Princeton, this is what you need to do to help turn your child’s dream into a reality.
Planning Is Crucial
As a parent, it’s your responsibility to provide a means to help your child achieve his/her dreams and goals. That’s easier said than done unless you have a sound financial plan in place to take care of the expenses involved in providing the best education to your child.
For this purpose, you must start planning for your kid’s education as early as possible. As a parent, you might have to cut down on non-essential expenses and review your spending history. Along with this, you must put aside some funds at regular intervals for your child’s higher education.
You Need To Maximise Your Savings
If you have prepared yourself for your child’s future from the beginning, then be rest assured that your financial position will be strong enough when the time comes. In case you have started saving for your kid’s education abroad from his/her early age, then it is undoubtedly a smart plan, but you also need to maximize your savings. Truth be told, savings alone are not enough as far as education expenses are concerned these days.
Therefore, along with savings, ensure that you also chalk out a systematic investment planning process. Moreover, the importance of investment planning needs to be understood from the early years when your child starts schooling. The key reason for this is that with increasing inflation, the value of money keeps on decreasing and therefore, a systematic investment plan is what you need.
For this purpose, you can consider investing in a ULIP-based child education plan to help secure a bright future for your kid. This simple yet comprehensive investment plan offers a perfect combination of insurance protection as well as investment. Meaning, it not only provides a lump sum corpus for your child’s educational needs at maturity but also offers the insured parent coverage against life’s eventualities.
Put simply; this investment plan offers triple benefits
- It pays a lump sum amount upon the demise of the insured parent
- The plan continues even after the demise of the parent
- Upon maturity of the plan, a lump sum amount is paid for your child’s education
Moreover, reputable insurers like Max Life Insurance offer child plans with the flexibility to choose funds basis your risk profile and switch funds unlimited times. Such tax-saving investment plans also offer tax benefits under Section 80C (for premiums paid) and Section 10 (10D) (tax-free maturity benefits).
Other benefits of these child education plans are:
- Zero policy administration and premium allocation charge
- Availability of partial withdrawal option
Set Time-Based Goals
Next, you need to jot down your child’s education milestones along with the time period within which your child is likely to meet those milestones. Although the possible significant expense that needs planning will be higher education, you also need to consider ancillary expenses like costs of coaching, tuition, extra-curricular activities, and so forth.
These expenses would be needed much before your child’s graduation or post-graduation, and therefore, you must ensure that your child education plan is able to take care of these costs as well.
For this purpose, ULIP-based child plans are beneficial as they allow you to make partial withdrawals after completion of the lock-in period (5 years). Meaning, you can set probable time frames when your child might need funds and plan your withdrawals accordingly.
Plan For Contingencies
Financial security in the form of term insurance is a crucial determinant if you are looking to fulfill your child’s dream of studying abroad. You cannot let life’s uncertainties get the better of this goal, given the fact that you have to make disciplined investments for accumulating the desired corpus for your child to pursue education abroad.
To avoid any untoward event like your untimely demise or a severe accident cut short your investment journey, you must purchase a term insurance plan with adequate coverage.
Term insurance plans are extremely cost-effective and offer high coverage while ensuring your family’s financial security in your absence.
Over to You!
Investment planning for foreign education of your child can entail an overwhelming array of details. However, with a realistic approach, systematic planning, and disciplined investing, you can create a corpus to fulfill your child’s dreams of studying abroad without any hindrance.
Byron Simpson is a qualified business/finance writer expert in investment, debt, credit cards, Passive income, financial updates. He advises in his blog finance cent.