Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

Kotak e-Term

Protect Your family’s financial future with Kotak e-Term. Know more

Kotak Assured Savings Plan

A plan that offer guaranteed returns and financial protection for your family. Know more

Kotak Guaranteed Savings Plan

A plan that offers long term savings and insurance in one premium. Know more

Kotak e-Invest

Insurance and investment in one plan with Kotak e-Invest. Know more

Kotak Lifetime Income Plan

Retirement years are the golden years of life. Know more


Get a Call

Enter your contact details below and we will get in touch with you at the earliest.

  • Select your Query

Thank you

Our representative will get in touch with you at the earliest.

Planning for Your Child's Higher Education? Explore These Investment Options

If you are planning to save for your child’s higher education, this blog is all you need. Here is the detail regarding some of the best investment options that you can choose from.

  • May 26, 2023

Updated on: 25 May 2023

It is crucial to start planning early to ensure that your child has the necessary funds to pursue their educational dreams. Fortunately, there are various child insurance planning options available that can help you save and grow your money over time to meet their future expenses.

Key takeaways

  • Sukanya Samriddhi Yojana is a government-sponsored savings plan to put money towards a daughter’s education.
  • Indians have the most confidence in gold investments regardless of all available investment possibilities.
  • Due to fund alternatives that provide steady returns, low levels of risk, or both, ULIP plans have become more popular.
  • Investing in real estate can also be a viable option for parents who want to save for their child’s education.

With the rising expense of education, it is more crucial than ever to begin saving as soon as possible to reduce your financial load in the future. Student finance for higher education will undoubtedly be costly, and thus it is very important to start investing in the right child insurance plan at the right time.

What is a Child Insurance Plan?

The primary objective of a child insurance plan is to create a financial corpus that can be utilized to meet various milestones in a child’s life, such as education expenses, higher education abroad, marriage, or other significant life events and provide financial protection in case of any unfortunate demise of parents.

Child insurance plans come in different forms, but the basic concept is the same. They are designed to provide a lump sum payment to the child in the event of the parent’s death. This payment can be used to pay for the child’s education, healthcare, or any other expenses that may arise.

How to do Child Insurance Planning?

As parents, we all want to protect our children’s future and ensure they have access to the best opportunities in life. One way to do this is through child insurance planning. It is a process of buying insurance policies that offer financial protection for your child’s future in the event of the untimely death of the parents.

Determine the Amount of Insurance Coverage

Before buying a child insurance policy, it is essential to determine the amount of insurance coverage you need. You should consider the child’s future expenses, including education, marriage, and other financial needs. It is important to factor in inflation and the rising cost of education and other expenses while deciding on insurance coverage.

Choose the Right Insurance Provider

Choosing the right insurance provider is crucial while doing child insurance planning. You should choose a reliable insurance company with a good track record and reputation in the market. You can research the company’s history, financial stability, customer service, and claim settlement ratio before choosing the insurance provider.

Consider the Policy Tenure

Policy tenure is an essential factor to consider while doing child insurance planning. It should align with your child’s future financial goals. For instance, if your child plans to pursue higher education after 18 years, you should opt for a policy with a tenure of 20-25 years.

Compare Different Insurance Policies

It is essential to compare different insurance policies before making a final decision. You should compare the features, benefits, and premiums of different policies to choose the one that best fits your needs. You can use online insurance comparison tools to compare policies from different insurance companies.

Review the Policy Periodically

Once you buy a child insurance policy, it is important to review it periodically to ensure it aligns with your child’s future financial goals. You should review the policy every few years and make changes to the insurance coverage and tenure if required.

How to Choose the Best Child Insurance Plan?

One way to ensure your children’s financial security is by investing in a child insurance plan. However, with so many options available in the market, it can be overwhelming to choose the best one for your child. Here are some key factors to consider when selecting the best child insurance plan:

Type of Plan

There are two types of child insurance plans available – traditional and unit-linked insurance plans (ULIP). Traditional plans provide a guaranteed return on investment, while ULIPs invest in equity and debt funds, providing potentially higher returns. Consider your investment goals and risk appetite before choosing between the two.

Policy Term

The policy term should align with your child’s future goals. For instance, if you want to secure your education, opt for a policy term that coincides with your college years. If you want to provide financial security for their entire life, a policy term that extends till their retirement may be more suitable.


Premium payments should be affordable and sustainable over the policy term. You can use online premium calculators to estimate the premium and choose a plan that fits your budget.


Riders are additional benefits that you can add to the base policy to enhance its coverage. Examples include critical illness cover, accidental death benefit, and waiver of premium. Choose riders that align with your child’s needs and future goals.

Surrender Value

The surrender value is the amount that the policyholder can receive if they choose to discontinue the policy before its maturity. It is advisable to choose a plan with a high surrender value to safeguard your investment in case of financial emergencies.


Choose a plan that offers flexibility in terms of premium payments, policy terms, and benefits. This will allow you to modify the plan as per your changing financial needs and goals.

Top 7 Investment Options for Your Child’s Education

One of the best presents you can give your child is to invest in their education. With the cost of higher education increasing every year, it is essential to start investing early to ensure your child has the financial resources they need to succeed.

Mutual Funds Investments

Pooling money professionally, managed by a Fund Manager, is called a mutual fund. There are three broad categories for a mutual fund: equity, debt, and hybrid. For instance, assume you have a one-year-old child, and your investment horizon is likely to fall between 10-15 years, depending on your investment aim. As a result, you should consider investing in equity-oriented schemes to achieve your financial goal of supporting your child’s education.

Since this is a long-term approach, the returns will be good enough to help you build that corpus. You might want to keep your money in an equity fund for a long period. However, after a few years of making such an investment, you can consider moving your investments to liquid funds to prevent significant volatility and assure liquidity based on your future needs.

Gold Exchange Traded Fund (GTF)

Indians have the most confidence in gold investments regardless of all available investment possibilities. Physical gold carries a higher risk of purity and comes with additional costs, such as producing jewelry, among other things. Furthermore, dealing with actual gold entails a great deal of effort and price in the form of locker purchases, etc. Gold ETFs, like stocks, are traded on the National Stock Exchange and may be bought and sold at market rates. Such funds are passive assets whose value is tied to the gold price in international markets because they exclusively invest in gold bullion.

Unit Linked Insurance Plan (ULIP)

Due to fund alternatives that provide steady returns, low levels of risk, or both, ULIP have become more popular. As a result, many insurance companies, banks, and financial organizations offer these plans in India, allowing policy purchasers a variety of alternatives to select from. Your money will generate high returns throughout the vesting period, assuring good ROI on the investments and supporting your little one’s educational costs in the future.

Term Deposits

Like fixed or recurring deposits, term deposits have traditionally been favored by a wide section of Indian investors due to the low risk they entail. Although they give low yields (about 6.5 percent to 7.5 percent for big banks), they are a low-risk investment choice. These deposits are made for a specific time and have limited liquidity. Furthermore, banks impose fines on investors who make early withdrawals. The values on such investments over ₹10,000 per year are taxable.

Sukanya Samriddhi Yojana (SSY) - A Government policy

Several government-sponsored saving plans also assist investors in accumulating adequate funds for the higher education of students. For example, Sukanya Samriddhi Yojana is a government-sponsored savings plan that works well for conservative investors looking to put money towards their daughter’s education. SSY is a low-risk investment that can save you up to ₹1.5 lakhs in taxes under Section 80C of the Income Tax Act. However, if you have a girl kid, you are only entitled to invest in the plan. Furthermore, under this arrangement, a family can only open a maximum of two accounts.

Real Estate

Investing in real estate can also be a viable option for parents who want to save for their child’s education. Purchasing a rental property can provide rental income that can be used to pay for education expenses. Parents can also invest in Real Estate Investment Trusts (REITs), which are companies that own and manage real estate assets and offer dividends to investors.

Final Words

While inflation might go down near zero, a key expenditure for the ordinary Indian household is rapidly increasing. One of the largest monetary outflows that households must budget for is their children’s education, and thus, understanding higher education finance is necessary. The key to financial support for higher education is investments, so start investing today to secure your child’s tomorrow.



What is the best way to start saving for my child’s college education?

There are various investment options available to save for your child’s education. It is essential to start early and set a realistic savings goal to meet your child’s educational needs.


What is a custodial account?

A custodial account is a type of account that an adult opens for a minor. The account is held in the child’s name but managed by an adult until the child reaches the age of majority. Custodial accounts can be used for college savings, but the funds are not specifically earmarked for education expenses.


How much should I be saving for my child’s college education?

The amount you should save depends on the cost of the college or university your child plans to attend. It is important to research the estimated cost of tuition, room and board, books, and other expenses. Financial experts recommend saving at least 50% of the projected cost of attendance to ensure that you can cover your child’s education expenses without relying on loans or other sources of funding.

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

Kotak e-Invest

Download Brochure


  • Return of Mortality Charges*$
  • Enhanced Protection
  • Multiple Plan Options
  • Zero Premium Allocation Charges
  • Tax Savings^

Ref. No. KLI/22-23/E-BB/521


- A Consumer Education Initiative series by Kotak Life

Similar Articles

What is ULIP and Its Benefits?

How To Track ULIP Performance?

उच्च रिटर्न प्राप्त करने के लिए सर्वश्रेष्ठ इन्वेस्टमेंट विकल्प

What is NAV in ULIP, and How is it calculated?

How to Plan Your Child's Education - A Step-by-Step Guide

How To Diversify Portfolio In 2023?

The lesser-known facts about ULIP policy that customers should be aware of?

What is a Credit Score and How Can Insurance Help You Improve it?

Why ULIP is Better Investment for Long-Term Wealth Creation?

ULIP as an Investment for Your Child

Best Investment Options to Cover Your Child's Education

उच्च रिटर्न प्राप्त करने के लिए सर्वश्रेष्ठ इन्वेस्टमेंट विकल्प

Corporate Bonds: Meaning, Types & Benefits

Planning Financial Goals and Objectives of Financial Planning

Are Money Back Policies Helpful? A Complete Guide

यूलिप प्लान में परिपक्वता लाभ क्या हैं: फंड वैल्यू सम एश्योर्ड या ओनली फंड वैल्यू?

Difference Between ULIP and Endowment Plan?

ULIP Plan as a Gift

What is ULIP Plan, and How Does it Work?

8 Important Tips to Maximize Gains with ULIP Investments

4 Benefits of ULIP Fund-Switching Feature

Why Do You Need A ULIP Plan - All You Need To Know

Top 10 Investment Strategies to Create Wealth

Long Term Savings Plan - Best Savings Investment Plans in India

Best Guaranteed Returns Investment Options to Meet your Financial Goals

6 Important Tips to Maximize Your Gains with ULIP Investments

What are the Best Investment Options for Young Adults?

Top 10 Investment Plans Available in India

What is Direct Investment and its Types?

How to Manage Inheritance Money?

Best Investment Plans for Children - Secure Your Child's Future

How Much Wealth Can You Create from ULIP in 10 years?

Why Should You Build an Emergency Fund?

Debt ULIPs vs. Debt Mutual Funds: What's the Difference?

यूलिप के फायदे और नुकसान क्या हैं?

Which is a Better Investment - Mutual Funds Or ULIP?

A Step-by-Step Guide: How To Make An Investment Plan?

What is Fund Switch in ULIP? And ULIP Fund Switching Techniques

How to Cancel ULIP Policy?

Four Financial Lessons from The Vedas on Living Life to The Fullest

What are Some of the Safest Investment Options in India?

ULIP Benefits You Can Avail from Early Investing

How to Manage Your Portfolio Like a Professional?

How to Calculate Your ULIP Returns?

Short Term and Long Term ULIP Plans for Wealth Creation

What are the Maturity Benefits in a ULIP Plan: Fund Value Sum Assured or Only Fund Value?

Customising investments to manage your wealth

What are the Best Investment Options For Females?

How to Make Your Financial Portfolio?

Is This The Right Time To Invest In ULIP? Why or Why Not?

Importance of Portfolio Management

Unit-Linked Life Insurance (ULIPs) vs. Term Insurance

Are Gains from ULIP Sale Taxable?

Safe Investment Options with High Returns for FY 2018-19

Why Should You Consider Guaranteed Savings Plan for Long-Term Investment?

What are the Best Short-Term Investment Plans with High Returns?

Which are the Best ULIP Plans in India for Children?

What are the Best Investment Options for Beginners or Amateur Investors in India?

What is ULIP Renewal?

Rate of Interest on Different Investment Plans in India

Why are ULIPs One of the Best Tax Saving Instruments?

Best Investment Options in India in 2022

Asset Allocations in ULIP - Know the Top Benefits

Why Should I Invest in ULIP?

Is the ULIP Policy Surrender Value Taxable?

Learn About Safe Investments with High Returns in India

Learn About Safe Investments with High Returns in India

Difference Between Guaranteed Savings Plan and ULIP

What is SIP Calculator, And How Does it Work?

यूलिप के फायदे (Benefits of ULIP in Hindi)

What are Mutual Funds?

Important Questions You Must Ask Yourself When Buying a ULIP Plan

Are Investment Returns Guaranteed in a ULIP?

What are loyalty additions, and how do they work in a ULIP?

How to Fulfil Your Financial Goals in the Next 10 Years?

What are the Best Investment Options for Students in India?

Savings Plan for Grandchildren

Different Types of Endowment Plans

Which is Better – FD, Mutual Fund, SIP, or ULIP?

ULIP Investment Strategy: Top Tips to Improve Your ULIP Gains

What are Index Funds and How Do They Work

What are Financial Assets & their types?

What is Money Management? Definition & Example

Investments Options to Buy a house in India

Benefits of ULIP as a Child Insurance Plan

Investment Options for NRIs in India

What are Tax-Deferred Savings Plans?

Building wealth through regular investing

How Does an Endowment Plan Work?

Got a Salary Hike? Here’s How to Plan your investment further

How To Invest Money In ULIP?

How to Plan your Investment to Achieve Periodic Financial Goals?

Which are the Best Investment Plans for Indian Senior Citizens in 2022?

Everything You Must Know About ULIP Riders

Why Should Parents Invest in Endowment Plan?

वित्तीय संपत्तियां और उनके प्रकार

Early Investing and the Power of Compounding

How is the Compound Annual Growth Rate (CAGR) Calculated in ULIP?

Why Are ULIPs Called Flexible Investments?

Top 5 Principles That Need to be Followed for Wealth Creation

Why Should You Invest in Term Insurance And ULIP?

ULIPs Investment – A Boon or Bane?

Difference Between Passive and Active Investing

What is Compound Interest, And How Do I Calculate it?

Best One-Time Investment Plans in India

Top 5 Investment Options in 2022 for Healthy Returns

Creating a second source of income with life insurance

Receiving regular payouts at various stages of life

What Is Financial Planning?

Beginner's Guide to Wealth Creation: Meaning, Strategies, & Importance

Why is Portfolio Diversification Important? How to Diversify Your Portfolio?

Here's Why it's a Good Time to Explore ULIPs as an Investment

What is a Savings Plan and What are is Benefits?

ULIPs: Suitable for all

What is the Importance of Saving Money?

Can ULIP Help in Achieving Short-Term Financial Goals?

How to Increase Net Worth Along with Family Protection

What is a Child Money Back Plan, and How Does it Work?

How to Choose the Best ULIP Plans to Invest in 2022?

The Importance of Starting Early: Securing Your Child's Future with a Child Education Plan

What are the Advantages and Disadvantages of ULIP?

How to Plan Savings from Salary?

ULIP vs FD - Which is Better and Why?

How to Use Recurring Investment Strategies to Build Wealth?

Can ULIP Policy be Transferred?

Successful Financial Planning for Urban Women

How Is ULIP Different from Other Life Insurance Plans? Where Can I Invest - ELSS, ULIP, or PPF?

How Can ELSS Funds Help You Save Tax & Create Wealth?

How Do One-Time Investment Plans Work?

Factors Affecting Stock Markets

Does Rupee Cost Averaging Work In Unit-Linked Insurance Plans?

Endowment Plan vs Fixed Deposit?

ULIP NAV Meaning & How is the Return Calculated in ULIP

8 Charges in ULIP That You Must Know

How Can a Legal Nominee Claim ULIP Benefits are the Policyholder’s Death?

What's Better for Your Child's Education? Child Plans or Mutual Funds?

What is the Time Value of Money (TVM)?

How to Start Saving Money in 10 Simple Ways?

Things to Know Before Buying an Endowment Plan

Do You Know the Difference Between Savings and Investment?

ULIP Capital Gain Tax: Check Tax Norms for Capital Gain on ULIPs

What is Equity Mutual Funds: Meaning, Types & Benefits

लॉयल्टी एडिशन क्या हैं, और वह यूलिप में कैसे काम करते हैं?