Step 1 — Put a number on the goal
List the course, today's total cost including living expenses, and the year your child will start. Inflate that cost at 8 to 10 percent a year to reach the amount you will actually need.
Step 2 — Work backwards to a monthly amount
- Count existing savings already earmarked for education
- Split the balance between growth assets and guaranteed instruments
- Increase the contribution each year in line with your income
Step 3 — Protect the goal
A savings plan works only if contributions continue. Child plans with a premium waiver benefit keep running even if the earning parent is no longer there, and payouts can be timed to admission years rather than a single maturity date.
- Payouts scheduled across the admission years
- Premium waiver so the plan self-completes
- Adequate term cover on the parent as the foundation
Common mistakes
- Planning with today's fees instead of future fees
- Relying on a single lump sum maturity that arrives a year late
- No life cover on the parent funding the goal
- Breaking the education corpus for short-term needs
Frequently asked questions
When should I start saving for my child's education?
The year the child is born is ideal. A longer horizon lets smaller contributions do the heavy lifting and reduces the risk of a shortfall in the admission year.
What is a premium waiver benefit?
If the parent who pays the premium passes away, the insurer pays the remaining premiums and the plan continues, so the child's payouts still arrive on schedule.
How much will a degree cost in 15 years?
Take today's fee and inflate it at 8 to 10 percent a year. A course costing Rs 15 lakh today can cross Rs 45 lakh in 15 years — the education calculator does this for you.