Tuesday, 16 September 2025

Can life insurance be your child’s passport to international education?

The world is changing at a fast pace, especially with the introduction of new trends with every new generation. Their aspirations are soaring and more than ever before, we are witnessing young Indian students setting their sight on global horizons for higher education. Of course, it is a moment of pride and hope, but it’s also a huge financial responsibility. Is studying abroad a common phenomenon? Well, it probably wasn’t until a decade ago but now the numbers speak for themselves.

As per recent government data, there is a staggering over 50% increase (almost 750,000) in the number of Indian students pursuing education abroad across USA, UK, Australia, Canada (Hindustan Times). The two key reasons were quality of education and global exposure.

We all know that “with great power comes great responsibility”; similarly, big ambitions lead to big financial implications – tuition fees, living costs, fluctuating exchange rates are some of the bigger challenges that can lead to your budget going haywire. That’s why it’s important to have meticulous planning and a robust financial strategy.

When we think of financial planning, we often focus on growing our money, but there is one more powerful tool that we tend to sometimes overlook – life insurance. This is usually considered as a security for the family in your absence; right? Yes, but it also has the power to safeguard your child’s educational aspirations against life’s uncertainties.

Should life insurance be an integral part of your financial plan? Answer is Yes. Let’s tell you how.

Managing uncertainties: Life is unpredictable and a sudden unfortunate event in the family can lead to several financial constraints. During such times, a well-chosen life insurance policy can provide a substantial financial cushion, ensuring that the necessary funds are available to continue your child's education without burdening the family with insurmountable debt.

Protection for the co-borrower: A lot of students take student loans for higher education and require a co-borrower or as we call a guarantor who usually is the parent. So, the parent is equally liable for the repayment. In case of any unfortunate scenario (untimely death or disability) for the student, the entire financial burden is on the parent, which may lead to a damaged credit score or legal implications. In such situations, life insurance can help the parent cover the outstanding amount.

Peace of mind: Sending a child abroad can make any parent anxious, as they navigate visa applications, securing admissions and adapting a new culture and environment. In all this, knowing that the financial aspect is secured can bring invaluable peace of mind both for the parents and the child.

Life insurance and education loans can strike the right balance

Overseas studies can create a huge hole in the pocket for the parents, and an education loan can support in addressing those immediate fund requirements. Complementing this financial aid, life insurance creates that protective shield such as a term plan that gives sufficient coverage at an affordable premium and a death benefit that can help repay the outstanding loan in case of any unfortunate incident.

Wondering what affordable premiums mean? The younger and healthier you are, lower the premium rates. So, purchasing a life insurance policy when you are younger enables you to secure your child’s future in a cost-effective way.

Not to forget the tax benefits which you can understand better from your advisor. For eg. If you avail an education loan which is bundled with an insurance component, the interest paid is eligible for deductions under Section 80E.

Which is the most suitable life insurance product for overseas education planning?

Choosing the right type of life insurance policy is crucial to effectively secure your child's educational future. Here are some suitable options:

Term Insurance is often the most cost-effective way to obtain a high level of coverage for a specific period — making it ideal for goals like overseas education planning. You can align the policy term with the duration of the education loan or the expected years of study, ensuring your family's financial commitments are protected even in your absence.

To further enhance this protection, consider Super Suraksha Term Plans — they not only offer comprehensive life cover at affordable premiums but also give you the flexibility to add riders like Accidental Death Benefit, Permanent Disability Cover, and has a Return of Premium option. Together, they provide a strong safety net for your loved ones during life’s most important milestones.

There are also specific child plans that are designed to help parents save and invest for their child’s future education. This is usually a combination of investment and insurance with market-linked returns or guaranteed payouts at key milestones of the child’s academic journey (education, tuition fees, living costs and other expenses). They may have a slightly higher premium than a term plan.

Some factors that you need to keep in mind while buying life insurance

Policy tenure: Ensure that the policy term aligns with the duration of the education loan or the expected timeline of your child's studies abroad.
Coverage: Calculate the total cost of education, including tuition fees, living expenses, and potential exchange rate fluctuations, and choose a coverage amount that adequately addresses these needs.
Insurer profile: Select an insurance provider with a strong track record of claim settlement and a good reputation for customer service, especially one that offers global claim settlement support, if needed.
Disclaimers and fine print: Carefully review the policy documents, paying close attention to clauses related to geographical coverage and residency status, to ensure the policy remains valid even when your child is studying abroad.

Conclusion

Sending your child abroad for higher education is one of the biggest emotional and financial investments you will ever make. So, as you prepare documents, compare universities, and scout for education loans, don’t forget to consider life insurance as part of the plan, because peace of mind is the best scholarship you can give your child.

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Mktg/RNLIC/child protect_blog/V1/Jul25