How to Plan for Your Child’s Future: Insurance, Education, and Marriage Goals

By
Hemant Beniwal
-
33
Understand how to plan for kids future.

Last Updated on April 23, 2026 by teamtfl

“The best inheritance a parent can give to their children is a few minutes of their time each day.” – O. A. Battista

The first thing that happens when a financial agent sits across from a new parent is predictable. They open with the child. Education. Marriage. Security. Within five minutes, there is a product recommendation on the table – usually a ULIP or an endowment plan branded as a “child plan.”

I have sat on the other side of that table for 25 years. I want to tell you what those conversations should actually look like.

⚡ Quick Answer

Never buy insurance in the name of your child. Insurance protects the financial dependants of the person insured – and your child has no financial dependants. The right approach: insure the earning parent adequately with a term plan, then build separate goal-based investments for education and marriage using SIPs in equity funds (for long horizons) and PPF or debt funds (as the goal approaches). Keep insurance and investment completely separate.

Planning for child's future - education and marriage goals

The First Mistake: Insurance in the Child’s Name

I still see it regularly – parents or grandparents taking out insurance policies in the name of a minor child. The emotional pitch is compelling: “protect your child’s future.” But think about it carefully. Insurance protects the financial dependants of the person insured. If something happens to your 8-year-old child, who is financially dependent on that child? Nobody. The child has no income, no dependants, and no financial obligations.

The correct question is: if something happens to the earning parent, who is left unprotected? The child. And the answer to that question is not child insurance – it is a term plan on the earning parent’s life, with the child or spouse as nominee.

A healthy 35-year-old can get Rs 1 crore of life cover for Rs 10,000-15,000 per year through a pure term plan. That single product does more for your child’s financial security than any “child plan” from any insurance company.

The Right Insurance Calculation

The insurance requirement for a parent with young children should cover the total future financial obligations: outstanding home loan, child’s education corpus, child’s marriage corpus, and 5-7 years of living expenses for the surviving family. This is often Rs 1.5-2.5 crore for a typical urban professional family – far more than the token cover inside most investment-linked child plans.

As you build your investment corpus toward these goals over time, you can review and reduce your insurance cover on a step-down basis. Today, before the corpus exists, you need the full cover.

The right child plan is a term plan on your own life.

RetireWise builds integrated financial plans that cover insurance adequacy, goal-based investments, and retirement – all in one integrated picture.

See How RetireWise Plans for Your Family’s Future

Building the Education Corpus

The second step after adequate insurance is calculating how much you actually need, and then building toward it systematically.

Consider a 3-year-old child today. A quality undergraduate degree in India currently costs Rs 10-20 lakh. A professional degree (engineering, medicine, MBA) can run Rs 30-60 lakh at a good institution. Studying abroad – Rs 80 lakh to Rs 1.5 crore for a 2-year master’s programme. These are current costs. Education inflation in India runs at 8-10% per year, significantly higher than general inflation.

For the same child who will be ready for higher education in 15 years: if today’s cost is Rs 15 lakh and education inflation is 8%, the expected cost at age 18 is approximately Rs 47 lakh. That is the target. Not Rs 15 lakh.

To build Rs 47 lakh in 15 years, assuming 12% CAGR from an equity mutual fund SIP, you need approximately Rs 10,500 per month. If you can start earlier – when the child is born – the monthly requirement drops to around Rs 7,000.

The Investment Strategy by Time Horizon

For young parents with children under 5, the investment horizon is 13-18 years – long enough for equity to do its work. A combination of SIP in diversified equity funds and PPF contributions makes sense. You can maintain 70-80% equity allocation at this stage.

For parents whose children are 10-15 years old, the horizon is getting shorter – 3-8 years to the goal. Start shifting gradually to a more balanced allocation: 50% equity, 50% debt. Do not exit equity entirely, but reduce the risk as the goal approaches.

For parents within 3 years of the education goal, move the accumulated corpus progressively to debt funds, liquid funds, or short-term FDs. Equity volatility in the final 2-3 years can cause serious damage to a corpus you cannot afford to wait on.

Planning for Marriage

Marriage costs in India have inflated significantly. A modest urban wedding today might cost Rs 15-25 lakh; a mid-range wedding Rs 40-60 lakh. The same calculation applies: today’s cost inflated at 6% over 20 years (for a 3-year-old child) produces a target of Rs 48-80 lakh.

The good news: a 20-year horizon is very long. Even a relatively modest SIP of Rs 5,000-7,000 per month, started when the child is 3 years old, can build Rs 50-60 lakh by age 23 at reasonable equity returns. The key is starting early and not touching the corpus before the goal date.

A Practical Illustration

Take a 30-year-old parent with a 3-year-old child. Current cost of education: Rs 15 lakh. Current cost of marriage: Rs 25 lakh. Inflation: 8% for education, 6% for marriage. Child’s ages for goals: 18 and 23.

Expected cost at goal date: education Rs 47 lakh, marriage Rs 64 lakh. Total required: Rs 111 lakh.

Insurance required today (before any corpus is built): at minimum Rs 1.1 crore of additional term cover on top of any existing cover, reducing as corpus builds over time.

Monthly SIP to build education corpus (15-year horizon, 12% assumed return): approximately Rs 10,500. Monthly SIP for marriage corpus (20-year horizon, 12% assumed return): approximately Rs 5,500. Total: Rs 16,000 per month across two goal-based SIPs.

This is a planning illustration. Your actual numbers depend on your city, your lifestyle expectations, and the specific institutions you are targeting. The framework, however, remains the same.

Read: 10 Financial Lessons to Teach Your Children

The most important financial decision you make for your child’s future has nothing to do with which child plan to buy. It is whether you have adequate term insurance on your own life – today, before the corpus exists.

Protect the parent. Build the corpus. Keep them separate.

Have you calculated what your child’s education will actually cost in 15 years?

Most parents underestimate by 50-70% because they use today’s costs without inflation. A RetireWise plan shows you the real number and the monthly SIP to reach it.

Book a Free 30-Min Call

Your Turn

Have you separated your child’s education/marriage investments from your life insurance? Or are you still holding a “child plan” that mixes the two? Share your situation in the comments – you may not be alone in it.

33 COMMENTS

  2. I am 31 yrs. old .I have 10 months baby boy.I am a government employee every year I invest
    PF: 48000
    PLI : 32000
    LIC: 4089
    PPF: 15000
    Is my planning is write? Now I wants rs 15 lakhs for my children at the age of 15. How much amount I should invest in SIP and PPF to achieve my goal?
    Kindly guide me.

    LIC Policies : 57572 yearly.
    Accidental policy & medicliam policy is also running.
    Mutual fund : 1000 per Month (Investing start from 3 month ago)

    please guide where i do invest for huge amount around 10 crore when i m 50 years

  3. I want to invest for my granddaughter age 3 months, out of retirement benefits. Advice me a suitable plan and amount. Thanks

  4. Hi Hemant,
    I am a regular reader of your articles, those are really interesting to read, I am looking for your advice for present investments for future goals.

    I hope you will help me with your reply.

    My Personal Information :-

    My age is 36 years ( I am only the earner )
    Wife is a home maker
    Son who’s age is 3 years now.

    My Current financial status :-

    Salary 40,000 PM ( take home , 6 Lac PM )
    Variable and fixed exp close to 16,500 PM.
    Savings would be 23,500 PM

    My current investments are :-

    LIC’s jeevan anand :- for 26,000 PY ( sum assured for 5 lac for 21 years, 3 installments paid )

    Current cash in hand is close to 200,000

    My Goals are :-

    1 ) Wanted to have a own home with not more than 25 lac loan amount ( rest of the amount I suppose my father will arrange )
    2) Creation of corpus of 30 to 35 lac for my sons higher education at his age of 23 i.e after 18 years from now.
    3) I am not clear and sure how much should I need after retirement. ( surplus after utilizing first and second goals 🙂 )

    Please advice, what should I do now to meet my goals, how much should I invest pm and in which instruments should I invest ?

    It would be great help for me and my family if you show us a some light 🙂

    I am hoping you will advice me. Thank YOU.

  6. hi
    i am 24 years old guy my annual income is 1.5lac i am palning to invest insurence policy on my mothers name, she is 45 years old so please suggest me better one

  7. Hi,

    My age is 30, I have one month’s daughter, earning 10500/- Pm. Suggest me which policy would be fine to get the 30lac in the age of 50

  8. Max New York Life has a life insurance policy for kids called College Plan.
    Here if the payee, that is the parent , is not there to pay the premium, the company pays the premium for the rest of the policy period and thus the kids college education is unaffected. I can send more details, if any one interested

  9. i’m 37 y farmer. i have 2 daughter .9 year and 6 month old. i want invest for my to daughter . where to invest 10000 per year. plz adivce me .
    thank u

  10. Hi Hemant

    could you pl guide me to choose right Term insurance (~40L) , Mutual Fund for investment ( Shor / Long Term). my age is 29, monthly in-hand -20K. i have a child of age 6 months.

    Thanks
    shrikant

    • Hi shrikant,
      Its good that you are thinking of term plan,people at your age normally don’t think term plan as a good option for them.Instead of that they prefer like to invest in (Investment+Insurance) scheme which they think as a good option which generates a return of 4-5%.
      I will suggest you to have a Term Plan say that you are retiring at age 50 then I will suggest you to have 20 year term plan from ICICI- I care or Kotak Preferred E- term Plan and that too online which will cost you less, but one thing you should keep in your mind that all the details mentioned by you in the form must be correct in case of Claim Settlement.
      Its good to hear that you would like to invest in Mutual Fund too but for this you should thing for long term prospect that will benefit a lot to you.

  11. Thanks Hemant ji,

    I am planning to Jeevan Bharati -1 plan to my wife . this is first LIC plan for her . Can you please advise me at the earliest.

    Bharani.

  12. Thanks Hemant, a real eye opener from you. In fact, it’s because of you and Manish Chauhan that i was able to convince my wife to not have a child plan for my 1 year old kid. Keep the good work up. Mind you, i had a tough time convincing her, since this is a very emotional subject. But even if there are a minuscule quantity of people benefiting from your posts, the purpose is served. I just wish that I had you guys around in 2o04 as well!!

  13. i am a boy of 25 yrs,my monthly income is 15000pm,what investment should i made to get a corpus of 1- 2lac for my sister marriage after 1 yrs,my expenses are only 6000-8000,help me i am thinking of flexi FD OR FMP OR EQUITY OR EQUITY MF—PLEASE HELP MEE

    • Hi Raman

      Most of the investors think that they are investing because they need to earn high returns but there is no definition of higher returns. Investing just for earning higher return cannot be anyone’s goal. Money is not the end rather it is a means to an end. Having more money cannot make you happy, but fulfilling your dreams can make you happy. I am not trying to say that we should not be hunting for returns. But returns are by product of investing – returns will depend on your time horizon, your comfort with various investments & the current market scenario. I will not position to suggest you any option since you have not disclosed your age, income, occupation, goals or your risk profile.

  16. Hi!
    My Age is 31 and my wife’s age is 29.we both earn and draw 57000 and 23000 net salary monthly. Our current investment is mostly in Sip’s.
    My total Sip’s :24500
    Wife’s total Sip’s : 3000
    Home loan Emi in my name :14807 pm(will complete in 2014)
    Home loan Emi in my wife’s name: 9900(Just started)
    Total Life Insurance Premium paid for me and my wife :20000 annually
    Sum of lumpsum investments :300000
    FD:40000
    Dependents : parents

    Pls suggest whether its a proper Financial Planning or Some changes has to be done.
    Are we under insured??There is no Term Insurance for both of us.If term insurance is required then which policy is best ??
    Is the policy named Jeevan Saral(newly launched by LIC) is a good policy to invest ??

    Regards,

    prashant chaturvedi

  17. Hi,

    My age is 31 and father of 1 month old child. I’m only person earning in family with parent. Monthly income is 45K.

    Related to investment, I don’t have much investment. Apart from 2 lic (1 for me and 1 for my spouse) & invested 25K in MF under ELSS.

    I wish to opt for some plan for my son’s education. Shall I pick child insurance or PPF + equity investment or all three together? Plz guide me.

  18. Dear Sir,

    My Age is 45 years, I have 2.5 years old child. I do following investments:

    1) ICICI Prudential Life Stage Assure 60,000/- per annum (premium to be paid for 5 years)
    2) HDFC Standard Life Insurance Young Star Policy Rs. 15,000/- per annum (premium to be paid for 5 years)
    3) LIC Recurring Deposit of Rs. 510/- per month (for 11 years).

    My current salary (total family income is Rs. 32,500/- per month). Please guid me as to how much amount per month / year should I take out further for my son’s education in the years to come. I work in a college in Mumbai and will retire at the age of 60. My wife is a home maker.

    Thanks and Regards,

    Vijay K.

  19. Hi Team.

    You are doing a great service to people like us who are dumb investment planner. I have got scores of LICs which I now understand are useless. I am now reading the surrender value clause for each of them. I will invest this amount in PPF/MF.
    My questions:
    1) Now I want to take term insurance covering 20 Lac for 30 years (I am 28). What else do I need to check other than the premium charges ? Can you suggest any policy ?
    2) Is there any difference between mediclaim & health insurance polcicy ? What are the not so abvious but important clauses in it. I want a floater policy for my wife & aging parents. Any suggestion ?

    Thanks

  21. I am 31 yrs. old with 4 yrs old Daughter & 2 Yrs. old son have some investment also please guide my investment is right or wrong

    LIC Policies : 57572 yearly.
    Accidental policy & medicliam policy is also running.
    Mutual fund : 1000 per Month (Investing start from 3 month ago)

    please guide where i do invest for huge amount around 10 crore when i m 50 years

  22. Dear Anuj,

    PPF is a Govt. of India scheme; you can invest in it through Post office or few selected banks (SBI).
    Return on investment: 8%
    Tax benefit under Sec 80C, no tax on the maturity and no tax on interest earned.
    These features make it best debt investment.

    SIP (Systematic investment Plan) is a way to invest in Mutual Funds:
    5 reasons for investing systematically
    https://www.retirewise.in/2009/07/5-reasons-for-investing-systematically.html
    Also read Key to Wealth Creation
    https://www.retirewise.in/2009/09/key-to-wealth-creation.html

    If you still have some query mark a mail to [email protected]

  23. What does it mean by SIP in diversified equity fund and PPF.
    I am in the same situation with 2.8 yrs old kid and have nothing been invested yet.

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