Why Every Parent Should Use a Child Plan Calculator before Investing

To secure the future of a child, parents generally invest funds in child-oriented life insurance plans.

23:54 29 July 2025

To secure the future of a child, parents generally invest funds in child-oriented life insurance plans. A child investment plan is meant to fulfil the future financial requirements of a child by providing dual benefits of savings & insurance, hence leading to the creation of wealth. The corpus accumulated can be used for a child’s education, marriage, or any other additional requirements, even in the absence of a parent. However, before selecting the right child insurance plan, it is important to ensure the financial future of the child is taken care of. The funds secured for the child’s future can be used for expenses, such as marriage, education, etc. 

What is a Child Plan Calculator?

To ascertain how much to invest for your child’s future, a child education plan calculator will be extremely convenient & useful. It is an online financial tool that helps in providing an estimate of the amount of funds required to achieve milestones in their children’s lives. It also takes into consideration the inflation factor, increasing costs of study, etc., to assess close to the actual amounts required. Hence, to accomplish the life milestones of your child, one is required to assess the total expenses that are required to be incurred. Further, to analyse the reasons why a Child plan calculator should be used, let us go ahead in this article.

Reasons why a Child Plan Calculator should be used

Provided are the reasons why a child plan calculator should be used:

 

• Helps meet specific objectives

 

Being a parent, you would need funds to meet your child’s dream, & a specific amount needs to be saved for this purpose. For assessing the amount of funds required to be kept aside, a child plan calculator would be required. 

 

• Helps plan the monthly finances

 

Once it is decided that the funds are to be invested in a Child Insurance Plan, it becomes important to know the budgeting & financial needs. Thus, a child plan calculator helps to plan the monthly finances & create a budget to fulfil the family’s financial requirements.

• Considers Inflation 

 

A Child Education Plan Calculator takes into consideration certain factors such as annual income, policyholder’s age, inflation factor, cost of study, etc., while estimating the amount of funds required.

 

• Helps in making well-informed decision-making

 

It also helps in comparing different investment plans available & selecting the most desirable that best suits the financial objectives & risk tolerance level. Hence, a child plan calculator helps in making well-informed decisions regarding the type & amount of funds required to cover the future expenses of your child.

 

• Helps track progress 

 

AChild Education Plan Calculatorhelps to track the progress of the investments made. To evaluate whether the investments made are performing well or not, or if any further alterations are to be made.

 

How Does a Child Plan Calculator Work?

AChild Education Plan Calculatorcalculates the expenditures associated with the actual financial objectives & hence tracks progress thereof. This calculator takes into consideration multiple factors while buying a Child Insurance Plan. These factors are as follows:

• Time period left to reach the objective (i.e. age of your child when higher education is to be started – present age of your child)
• Total present savings
• Present costs of opting for higher education 
• Interest rate on present savings
• Expected inflation rate

This calculator uses the concept of future value to ascertain the funds required for a child’s future.

FV = PV (1+R) ^ N 

Where,

FV =Future Value

PV = Present Value

R = Rate of return on the investment

N = Duration of the investment.

Let us suppose your child is 3 years old at present & you will require funds when your child is 18 years old, i.e. 15 years from now. Now, let us presume that the present cost of education is INR 8 lakhs & considering the inflation factor to be 6%, the future value will be:

FV = PV (1+R) ^ N 

= 800000 (1+ 0.06) ^ 15

 

= INR 19,17,246.6

This means you will need INR 19,17,246.6 in future to meet the future needs of your child. Now, let us presume there are no savings as of today, & the rate of return is 7% per annum, the amount required per month from today would be:

Using FV = PV (1+R ) ^ N , 

19,17,246.6 = PV (1 + .0.7) ^ 180 

 

PV = INR 6,049

How to Use a Child Plan Calculator?

Provided are the steps to use a child plan calculator:

Step 1: Mention the future objectives of your child, i.e. whether education or marriage.

Step 2: Choose the present age of your child.

Step 3: If you have selected “education” as your goal, you will further be asked to specify the type of educational course to be opted for, i.e. graduation, post-graduation, or higher education.

Step 4: If you have chosen “marriage” as your goal, provide the desired age of marriage.

Step 5: Further, if “higher education” has been chosen in the last step, select an option amongst commerce, science, arts, etc.

Step 6: If “graduation or post-graduation” was selected in the last step, further choose from the options available, such as doctor, MBA, designer, engineer, architect, etc.

Step 7: In case you chose marriage as your goal in the previous step, provide the amount of funds that would be required if you get your child married at present.

Step 8: Provide the present & future estimated cost of the child’s education. In case of marriage, provide the estimated interest rate.

Step 9: Provide the details regarding the total savings already done.

Step 10: The child plan calculatorwill show you the results.

Conclusion

A child plan calculator is thus an efficient tool for parents who want to secure their child’s future by saving today for the secure future of their child. This calculator helps provide an accurate estimate of the funds that are required to be invested today to accomplish the future goals of your child. It offers flexibility by allowing you to customise the available investment options, thus helping to make well-informed decisions.