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The write up contains details of NRI children's education policies. Features and benefits of children's education policies are described in the write up.

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Children's Education Policies for Non Resident Indians

Children’s education plan:-
Securing the position of a parent means a person is blessed with joy of having a child and at the same time responsibility of building a life for the child with good education. These factors will have definite influence over an NRI parent. NRIs work abroad and tend to be more concerned about their children’s education. There are many companies in India that provide children’s education policies for NRI.
 
Types and features of children’s education plans:-
Types of policies: There are basically two types of policies an NRI will look at when he goes for children’s education policies. One type of policy insures a definite sum of amount with bonuses at defined intervals. The other type of policy involves investment of a part of the premium paid by the policy holder into stock market and funds. These policies pay back sum assured as well as loyalties paid back at defined intervals.
 
Term of policy: The term of children’s education policy is subject to maximum age of child at maturity (21 to 25) and also maximum age of policy proposer at maturity (65 to 70). Children’s education policies available in Indian market have a term of 8 – 25 years. On the other hand there are policies that specifies the policy term as ‘the proposer is covered until the age of the child is 21 or 25’.

Age, Premium payment and sum assured: Since the policies are purchased for children the age of the proposer and the child is considered for entry and exit of policy. 18 to 50 and 0 to 17 are age constraints at entry for parent and child respectively. Premium is payable monthly, quarterly, half yearly and annually and amount of premium depends on the sum assured, policy term and premium payment interval. There are children’s education policies that offer a minimum of Rs.50,000 as sum assured.
 
Loyalties: Loyalties earned from investment in funds is paid off in regular intervals during the term of the policy. Every insurance provider will have a defined formula to calculate the loyalty that is paid off during the policy term. For ex: SBI smart scholar plan has a formula for loyalty i.e. loyalty= 1% multiplied with the average of the value of a fund taken over preceding 24 months of policy period.
 
Benefits of children’s education policy:-
  • Planning for financial expenses of child’s education will help channel a part of the parent’s income and also provides a sense of security about the child’s future.
  • Accidental death cover and health benefit rider along with children’s education plan makes the proposer feel much relaxed form uncertainties of life.
  • Tax benefits can be availed by a NRI on the basis of section 80C and 10 (10(D)) of the Income tax act. 
NRI children’s education plan providers:-
  • SBI
  • Aviva
  • LIC 
Building a child’s educational career with sufficient financial backup is the primary concern of every NRI parent today. Children’s education policies will help NRIs in constructing a sound framework that will support the expenses incurred by them towards their children’s education.