Opinion | What you must do before your child goes to college3 min read . Updated: 26 May 2019, 12:11 PM IST
You must also remember to insure yourself against death while your child studies
The online test centre was a fire hazard. Five hundred children, including my daughter, crammed into a small building with a single narrow entrance, no emergency exits, heavy electrical wiring and no water bottles, bags, food or phones allowed. I thought about taking my daughter out, but then, not wanting to be classified as over protective, stood beside hundreds of other parents for a long time in the sweltering heat. Can’t the authorities see the obvious, or do we need fires to break out in Karol Bagh hotels, cinema halls or hospitals before taking action? Buying fire insurance is not the solution to these issues but preventing an imminent fire is.
In a few months, my daughter, like many others, will go to college. There are some insurance decisions that you must take before the children leave. Buy your child an independent domestic health insurance. Most children will have been a part of their parent’s family floater health insurance. These plans cover dependant children till somewhere between 18 and 25 years. After that they are excluded from the parent plan.
You should pro-actively transition to an independent health insurance policy for your child. Insurers will give them a stand-alone health insurance without medical tests or additional declarations and reduce the cost of the parent’s family floater because one family member will not be part of it. For an 18-year-old, ₹10 lakh of health insurance will cost between ₹5,000 and ₹10,000 a year. Pay twice that and you can cover your child for ₹50 lakh of insurance.
Several parents will send their children overseas, by choice or compulsion. There has been inadequate capacity building. Twenty-eight years ago, when I was applying to college, a leading design school had about 200 seats, of which about 50 were reserved for minorities, the remaining 150 being open. Today the number of seats at that university has increased marginally to 250 seats but just 60 are unreserved. The once minority has become the majority. Studying overseas is terribly expensive. An undergraduate degree in the US or the UK costs ₹1.5-3 crore. Asian and European colleges cost less but are still expensive.
A student’s international insurance is a major cost when studying overseas. The universities are specific about the insurance cover you must have. Sometimes there is no option but to buy what the college demands. In the UK, Visa authorities add an international health surcharge to allow students to access the National Health Scheme (NHS) and many parents also buy an additional private cover because accessing non-emergency specialist care through the NHS can take much longer than what we are used to here. In Australia, it is mandatory to buy insurance from approved Australian insurers.
Sometimes, if you are allowed to buy student insurance in India, the cost saving can be significant. For example, in the US, an insurance plan that costs over ₹3 lakh a year will costs under ₹1 lakh here. However, this purchase needs to be carefully researched because you don’t want to buy something that is not accepted by the college or Visa authorities. Ideally, ask the university to certify that the insurance you are buying locally is alright. If there is an issue, the student’s insurance will be fully refunded before the travel commences.
Finally, given the high cost of overseas education, you must insure yourself against death while your child studies. You are likely to be between 45 and 55 years if your child is entering college and, if healthy, accident is the most likely cause of death. This can be specifically covered by personal accident with a high sum assured between ₹1 crore and ₹2 crore.
Until recently, these high-value insurances were not available but are now more common. They may not be listed on the website however, so you need to reach out to an advisor or the company to buy these— ₹2 crore of sum assured will cost about ₹25,000 per year. These accident insurance plans can be bought even if you suffer from chronic conditions such as diabetes or hypertension and can be discontinued once your child completes her education.
I’ve offered to sort out these possible health and hazard risks for my daughter by relocating close to her college and helping her transition. For some inexplicable reason, she does not seem to share my enthusiasm.
Kapil Mehta is co-founder, www.securenow.in