According to the statistics reported in the Trends, Challenges and Innovations in Management study, every year, nearly four lakh Indians travel abroad in pursuit of higher studies.The USA, UK, Australia and Germany are some of the most favored destinations.
Will your child be one of them?
Children looking to bag an overseas degree might have this question on their minds–
Will I be one of them? The answer to this question depends a lot on your preparedness in meeting the financial and also technical demands of the goal.
Overseas education is an expensive affair
Education is expensive in India and even more so abroad. The steep cost of overseas education can make even the affluent families anxious. The total cost of a Master of Science degree (MS) in the USA as per 2016-17 is approximately USD 70,000 or INR 45.3 lakh. MBA is even more expensive.
There are other factors that could impact the fee amount adversely, like depreciation in the value of the Indian rupee (INR) vis-à-vis the US dollar. For instance, a 10% depreciation in the INR vis-à-vis the USD can take the MS degree expenses up to INR 50 lakh.
To plan effectively for such a large sum of money requires careful planning and many years of saving and investing. Successful goal digging is a step by step process. Planning for important life goals like child’s overseas education rests on three pillars:
1. Find a reputed counsellor – Many parents may not be well-informed to guide their children on the various schooling options and the nitty-gritty of foreign education; hence the best thing to do is to consult an expert or a counsellor. The expert will guide you on various career / degree options, costs associated with each degree, application process, best colleges, specific courses and workshops, visa formalities and other relocation tasks
2. An early start in the investing process – Any purposeful goal scoring stands to benefit from an early start. The sooner you start saving for the life goal, the better your chances of achieving them. This gets even more critical when it comes to expensive and life-defining goals like overseas education. The move to study abroad must be planned years in advance when your child is in school. A delay in the investment process could rob parents of their precious time, which they will have to cover up by investing much larger amounts in the future. And even that may be of little help, since money needs sufficient time to grow by compounding. With a shorter time frame, your money may not compound as per expectation and as a result of this your goal could stand compromised.
3. Tie up the investments – There is help at hand for parents looking to finance their child’s foreign education. Today, of the multiple investment options available in the market, the ULIPs are one of its-kind as it encourages goal based savings with its long term systematic investment option. These plans can help achieve key life goals as it offers individuals the opportunity to select a product in harmony with their risk appetite. There are also flexibility to choose between funds, change life cover amount and premium payment term. The charges are transparent and policy holders can avail tax benefit. Since long term market investment tend to yield very attractive returns, the new-age ULIPs are ideal for those who would like to invest in a long term goal, like their child’s higher education abroad. Hence by committing to ULIPs, one can rest secure in the knowledge that their life goal will be accomplished over time.
Amongst the new-age ULIPs, Bajaj Allianz Life Goal Assure is a game changer for the industry as it has two unique benefits that are one-of-its-kind for ULIPs in India - Return of mortality charges which guarantees that a policyholder will get back the mortality charges, thus enhancing the value of their corpus on maturity and The Return Enhancer which ensures that a customer who opts to receive the maturity benefit in instalments over a period of five years will receive an addition of 0.5% of each due instalment. In addition to these features, the product also offer value packed benefits like Fund booster and Loyalty Bonus for staying invested for long. There are also options to decrease sum assured, change Premium payment terms and unlimited free switches between funds for return maximization. To top all these, one can also enjoy tax benefits under section 80C and 10 (10D).
There is great satisfaction in seeing children pursue their goal of studying abroad in a sought-after university. While the costs of pursuing this goal can be overwhelming for majority of parents, sound planning and timely goal-based investments in the new-age ULIPs, can turn this dream into reality.
Alternatively, you could also invest in a term insurance plan to secure your child’s life goal in case of your untimely death.
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