University fees in Pakistan are rising ~12% per year. A degree that costs Rs 800,000 today will cost Rs 2.5 million in 15 years. A well-chosen child education plan guarantees the money is there when your child needs it — even if you’re not around. Here’s how to pick the right one in 2026.
Why a dedicated child plan and not just a bank account?
- Waiver of premium on parent’s death — the insurer pays remaining premiums so the child still gets the maturity amount.
- Guaranteed maturity amount — no market fluctuation risk (for endowment plans).
- Forced discipline — you cannot “dip in” whenever tempted.
- Tax deductible under Section 62.
- Legal segregation — the maturity payout goes only to the nominated child.
Types of child plans in Pakistan
1. Traditional endowment (recommended)
Fixed premium, guaranteed sum assured + bonuses at maturity. Example: State Life Child Education & Marriage Plan.
2. Unit-linked
Contribution split between insurance and market-linked funds. Higher potential returns, higher risk. Example: EFU Education Savings Plan.
Calculating the target amount
Aim to cover: current university fee × (1.12)^years-until-university.
| Child’s current age | Years to university | Current fee Rs 800,000 | Future fee needed |
|---|---|---|---|
| Newborn | 18 | Rs 800,000 | ~Rs 6,150,000 |
| 3 | 15 | Rs 800,000 | ~Rs 4,380,000 |
| 7 | 11 | Rs 800,000 | ~Rs 2,780,000 |
| 10 | 8 | Rs 800,000 | ~Rs 1,980,000 |
Sample premium (State Life Child Ed. Plan, Rs 2,000,000 SA, 15-year term)
| Parent age | Approx. annual premium |
|---|---|
| 25 | Rs 96,000 |
| 30 | Rs 110,000 |
| 35 | Rs 128,000 |
| 40 | Rs 152,000 |
Checklist before buying
- Does the plan include a waiver of premium rider on parent’s death?
- Is the term aligned to your child’s university start year?
- Is the sum assured adjusted for 12% education inflation?
- Is the plan issued by a strong insurer (preferably State Life for guaranteed plans)?
- Is there a partial-withdrawal facility for school-year milestones?
Common mistakes
- Underestimating future fees.
- Skipping the waiver-of-premium rider to “save” on premium.
- Picking a unit-linked plan without understanding equity risk.
- Not naming a secondary guardian for the child.
Frequently asked questions
Whose life is insured — mine or my child’s?
Yours, the parent’s. The child is the beneficiary.
What if the child doesn’t go to university?
The maturity amount is paid regardless — child can use it for business, wedding or wealth.
Can both parents open plans?
Yes — for higher targets, both parents can open policies naming the same child.
Calculate your child education premium — use our calculator (select “Child Ed.” tab) or talk to an advisor.