Educational Insurance Policies and Benefits in India

There are various types of insurance policies available in India, some of which are mandatory while others are optional. Here are some of the types of insurance in India:

1. Life insurance: Life insurance policies provide financial protection to the policyholder's family in case of their unfortunate demise. Life insurance, term insurance, and endowment policies are different types of life insurance policies currently being offered in India.
2. Health insurance: Health insurance policies provide coverage for medical expenses incurred either due to illnesses or accidents. They can be individual policies, family floater policies, or group policies.
3. Motor insurance: Motor insurance is mandatory in India as per the Motor Vehicles Act. It provides coverage against damages or losses caused to a vehicle due to accidents, theft, fire, or natural calamities. Third-party liability insurance and comprehensive insurance are two types on insurance policies currently being endorsed in India.
4. Personal accident insurance: Personal accident insurance provides coverage for accidental death, permanent disability, or temporary disability due to an accident.
5. Travel insurance: Travel insurance policies provide coverage against unforeseen events such as medical emergencies, trip cancellation, loss of baggage, etc. They can be individual policies or group policies.
6. Crop insurance: Crop insurance policies provide coverage for losses incurred by farmers due to natural calamities, pests, diseases, or other factors affecting crop yields.
7. Home insurance: Home insurance policies provide coverage for damages or losses to a house and its contents due to fire, natural calamities, theft, or other risks.
8. Business insurance: Business insurance policies provide coverage for various risks faced by businesses, such as property damage, liability, business interruption, etc.

Types of Education Insurances Policies India

In India, several types of education-based insurance policies are available to help parents financially plan for their children's future education. Here are some of the popular education insurance policies in India:

1. Unit-linked insurance plan (ULIP): A ULIP is a market-linked insurance policy that offers the potential for high returns on investment. It allows policyholders to invest in equity or debt funds, and the policy returns are based on the performance of these funds.
2. Child Education Plan: This is a type of life insurance policy that helps parents save for their child's education. The policy provides a lump sum amount at the end of the policy term, which can be used for the child's education expenses.
3. Scholarship plans: Some insurance companies offer scholarship plans that provide financial support to children for their education. These plans offer regular payouts at specific intervals during the policy term.
4. Savings plan: A savings plan is a traditional insurance policy that provides a guaranteed return on investment. It helps parents save for their child's education expenses over a period of time.
5. An Endowment Plan is a type of life insurance policy that provides both life insurance coverage and savings. The policyholder receives a lump sum amount at the end of the policy term, which can be used for the child's education expenses.

It is important to compare different education insurance policies and understand their features, benefits, and costs before choosing one that best suits your financial goals and needs.

Benefits of Buying an Education Insurance Policy in India

Education insurance policies provide several benefits, including:

1. Financial security: Education insurance policies provide financial security to parents by helping them save for their children's future education expenses. In case of an unfortunate event, such as the policyholder's demise, the policy benefits can be used to fund the child's education.
2. Guaranteed returns: Some education insurance policies offer guaranteed returns on investment. This provides a risk-free investment option to save for their children's education.
3. Flexibility: Education insurance policies offer flexibility in terms of premium payment and policy term. Policyholders can choose the premium payment frequency and policy term as per their convenience.
4. Tax benefits: Education insurance policies are covered under Section 80C of the Indian Income Tax Act currently being used in India. The premium paid towards the policy is eligible for tax deduction up to a certain limit.
5. Scholarship opportunities: Some education insurance policies offer scholarship opportunities to policyholders' children. These scholarships can help cover a portion of the child's education expenses.
6. Encourages long-term savings: Education insurance policies encourage long-term savings for the child's education. This helps parents plan for their child's education well in advance and ensures that they have sufficient funds when the time comes.
7. Inflation protection: Education insurance policies offer inflation protection by providing benefits that are adjusted for inflation. This ensures that the policy benefits are sufficient to cover the child's education expenses, even if there is a rise in the cost of education over time.

Overall, education insurance policies provide a reliable and convenient way for parents to save for their children's education and secure their future.

Cost of Education Insurance Policy in India

The cost of education insurance policy depends on several factors such as the type of policy, sum assured, policy term, age of the policyholder, and the child's age. Here are some estimated costs of different education insurance policies in India based on the information available in the public domain:

1. Child Education Plan: The premium for a child education plan can range from Rs. 10,000 to Rs. 50,000 per year, depending on the sum assured, policy term, and the child's age.
2. Unit-linked insurance plan (ULIP): The premium for a ULIP policy can range from Rs. 20,000 to Rs. 1 lakh per year, depending on the sum assured, policy term, and the investment fund chosen.
3. Endowment plan: The premium for an endowment plan can range from Rs. 5,000 to Rs. 50,000 per year, depending on the sum assured, policy term, and the child's age.
4. Savings plan: The premium for a savings plan can range from Rs. 5,000 to Rs. 50,000 per year, depending on the sum assured, policy term, and the child's age.

Caution When buying Education Policy

It is important to compare different education insurance policies and their costs before choosing one that suits your financial goals and needs. It is also advisable to consider the policy features, benefits, and the insurer's reputation while making a decision.

There is no specific data available on the number of people who have benefited from education student policies in India. However, education insurance policies have become increasingly popular in recent years, as more and more parents realize the importance of financial planning for their children's education.

Furthermore, education insurance policies have encouraged long-term savings and have helped reduce the financial burden of education expenses on families. While the exact number of beneficiaries may not be available, education insurance policies have undoubtedly played a crucial role in helping many families plan for their children's education and achieve their financial goals.

Choosing one for your Child: The Education Insurance Policy

Choosing the best education insurance policy in India depends on individual financial goals, budget, and other requirements. Here are some of the popular education insurance policies in India that you can consider:

• LIC New Children's Money Back Plan: This policy offers guaranteed returns and regular payouts to parents, helping them save for their child's education.
• HDFC Life Young Star Udaan: This policy provides a lump sum payout on the child's 18th, 19th, and 20th birthday to help fund their education.
• SBI Life Smart Champ Insurance Plan: This policy offers regular payouts and a lump sum payment at maturity to fund the child's education.
• ICICI-Pru SmartKid Solution: This policy provides guaranteed returns and payouts to fund the child's education at different stages of life.
• Max Life Shiksha Plus Super: This policy provides comprehensive coverage, tax benefits, and flexible premium payment options to parents for their child's education.

It is recommended to compare the features, benefits, and premium rates of different education insurance policies before selecting the one that suits your financial goals and needs. Additionally, it is advisable to check the insurer's reputation, claim settlement ratio, and customer reviews before making a decision.

Educational Insurance Policies and Benefits in India

Education in Economic Survey 2022-23

 Education in Economic Survey 2022-23
(ES 2022-23)

Following the practice of presenting the economic status of the Country, the Finance Minister, Ms. Nirmala Sitharaman, tabled the Economic Survey 2022-23 in the Parliament of India on 31^st January 2023, following which she will present the Union Budget 2023-24 on 1st February 2023.

Like the previous Economic Surveys, emphasis has been laid down on Social Sector, including the Education Sector, which is in the limelight because of the recommendations of the New Education Policy (NEP) 2020; many recommendations of NEP 2020 are in the process of the implementation though the ongoing programs of the Government of India, such as Samagra Shiksha Abhiyan Scheme/Abhiyan which the Department of School Education and Literacy of the Ministry of Education is implementing.

One of the significant recommendations of NEP 2020 is to explore the possibility of having expenditure on education 6 percent of the GDP, which has been recommended by many Committees and Commissions in the past but still to see around 6 percent of the Gross Domestic Product. The Economic Survey presented details of expenditure on Social Services expenditure during the period 2015-16 to 2020-21 on an Actual Basis and also for the period 2021-22 (Revised Estimates) and 2022-23(Budgeted Estimates). Education and Health Sectors are important Social Sector Services, details of which are presented in the ES 2022-23.

Expenditure on Social Services is also presented as a percentage of GDP which reveals that India is still far away from an expenditure of 6 percent of GDP on the Education Sector. In fact, the entire social sector has 8.3 percent expenditure of GDP in 2022-23 (Budgeted), to which the share of education is 2,9 percent, and that of the Health Sector, 2.1 percent.

Can we expect a boost to the education sector in the Annual Budget of 2023-24, which will be presented on 1^st February 2023 in Parliament? With General Election approaching fast in 2024, chances of a significant increase in the education sector as it seems is bleak.

If we see the percentage of the Social Services Sector to GDP, the same has increased from 6.6 percent in 2015-16 to 7.5 percent in 2020-21 and to 8.2 percent in 2021-22 (Revised Estimates) and further to 8.2 percent in 2022-23 (Budgeted Estimates). But no change is observed in the expenditure on education to GDP, which remained stagnant during the period 2015-16 to 2022-23 and hovering around 2.8 percent, far below the envisaged 6 percent. In 2022-23, on budgeted estimates, education was only 2.9 percent of the GDP.

The only satisfactory point is that within the Social Services Sector, education used to get the lion’s shares; its contribution was 9.5 percent of the total expenditure, 26.6 percent of expenditure on the social services sector in 2022-23.

It may, however, be recalled that the share of expenditure on education has declined from a high of 10.4 percent in 2015-16 to the present 9.5 percent. But in absolute terms, expenditure on education increased from 3,91,881  crores in 2015-16 to 7,57,138 Crores (Budgeted), thus showing an increase of 3,65,257 crores in absolute terms and 93.21 in percentage terms. However, it would be of interest to see actual expenditure on education in 2022-23 (not budgeted) when the same will be placed on the table of the Parliament as part of the Union Budget 2023-24; there used be a gap between the two  in the past.

The Economic Survey (ES 2022-23) presented detailed in terms of the number of Educational Institutions: Both Schools and Higher Education Institutions which is based on UDISEPlus (2021-22) and AISHE (2020-21), both of which are the latest but outdated. Even information on school and higher education are not of the same years. In addition, ES 2022-23 also presented Literacy Rates during the period 1951 to 2011.

Economic Survey 2022-23

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Decoding UDISE+ 2021-22 Enrolment Ratios

 Arun C Mehta
Former Professor & Head of EMIS Department
NIEPA, New Delhi

Brief Introduction

In this brief note, we decode the implications of various enrolment ratios at different levels of school education released on November 3^rd, 2022, by the Ministry of Education through the UDISE+ 2021-22. The same shall be compared with the 2020-21 ratios wherever required. Table 1 below presents a variety of enrolment ratios at the all-India level, such as Gross & Net, Adjusted-Net, and age-specific enrolment ratios at primary, upper primary, elementary, secondary, and higher secondary levels of education.

 Gross Enrolment Ratio

The Gross Enrolment Ratio at the primary level remained stagnant during 2020-21 and 2021-22 and is reported at 103.4 percent in 2021-22; what does it mean? Does it mean that all children aged 6 to 10+ years are enrolled? Or does it mean that the goal of universal primary enrolment is achieved? The answer to none of these questions is YES. Then how to interpret it is the moot question, which must also be correctly understood by the officers engaged in annual plan formulation exercises as it has widespread implications for universal school enrolment.

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Dose UDISE+ Underestimates School Dropout Rates?

Arun C Mehta
Formerly Professor & Head of the EMIS Department
NIEPA, New Delhi

 Introduction

Perhaps one of the most critical indicators through which the retaining capacity of the system is judged is the grade-to-grade dropout and average annual dropout rate. With the high dropout rates, a state or India as a whole cannot move towards universal school education which has a 100 percent GER by 2030 as has been envisaged in the National Education Policy 2020. The fate of planning exercises and their outcome can easily be understood if the official dropout rates disseminated through the UDISE+ do not accurately represent the system's ability to retain children, which is also valid for transition and retention rates.

It may be recalled that UDISE was maintained by NIEPA from its inception in 1994-95 to 2017-18; thereafter, the same has been managed by the Department of School Education and Literacy of the Ministry of Education. It may be recalled that the entire Country got covered under the DISE in 2005-06 for the first time, and the same was extended to the entire school education sector in 2012-13; DISE since then is known as U-DISE or Unified DISE. All through the years 2005-06 to 2017-16, the flow rates, including average annual dropout rates, were continuously computed based on the common schools, and not all schools (including schools that were not covered in the previous year) were considered after that. If considered, all schools would underestimate the actual dropout rates or even present misleading and absurd rates, which has been demonstrated in the present note by taking accurate UDISE+ data of a state. The flow rates have been downloaded from the official portal of UDISE+; it is not mentioned whether the rates computed are based on all schools or common schools.

 To know the retaining capacity of the system below, we analyse grade-to-grade dropout, transition, and completion rates in one of the states of India for the recent year, and the same is presented in Table 1. The table reveals that the state reported a ZERO dropout rate for the Cohort 2019-20 at the primary level, which is separately true for boys and girls. In 2017-18, the dropout rate at the primary level was 4.45 percent, which declined to 2.8 percent the following year.

 It may be recalled that grade-specific enrolment for two consecutive years and grade-specific number of repeaters are required for the latest year to compute grade-to-grade dropout and average annual dropout rate. It is essential to consider common schools in both years; the newest year enrolment data might be based on more schools, as the schools not covered during the previous year are also covered in the current year. The UDISE+ data of the state demonstrated in this note shows that as many as 84,459 schools were covered in 2020-21, more than 3,184 new schools (3.53 percent) than covered during the previous year, which should not be considered in the dropout computation. As has already been explained above, if considered all schools are in computation, the dropout rate received is likely to underestimate the actual dropout rate.

 

Table 1: Dropout Rate
Cohort	Primary Level			Upper Primary Level			Secondary Level
	Girls	Boys	Overall	Girls	Boys	Overall	Girls	Boys	Overall
2019-20	0.00	0.00	0.00	3.39	2.13	2.78	18.96	16.30	17.64
2018-19	1.52	3.01	2.28	9.24	8.61	8.93	22.66	20.01	21.36
2017-18	4.30	4.59	4.45	5.14	4.26	4.68	17.05	18.68	17.90

Source: UDISE, different years.

Dropout Rate based on all or Common Schools

The calculation of grade-specific flow rates based on 2019-20 and 2020-21 enrolment and 2020-21 repeaters are demonstrated in Table 2, which shows that the same is computed based on highly inconsistent data, which is primarily because of consideration of all schools instead of common schools. For example, the promotion rate in Grades 1, 2, 3, 4, 6, 9, and 10 is more than 100, which means that more students in these grades than in the previous Grade in the previous year because of this grade-to-grade dropout rate obtained in these grades is negative which is theoretical, not possible. Out of eight grades of elementary level, in six grades, the number of dropouts obtained is negative.

Table 2 Grade-specific Enrolment & Repeaters: 2019-20 & 2020-21
Classes	Enrolment		Number of			Flow Rates
	2019-20	2020-21	Repeaters	Promotes	Dropouts	Repetition	Promotion	Dropout	Total
I	2551956	2708517	3212	2705305	-338255	0.13	113.13	-13.25	100
II	2564873	2890154	3155	2886999	-249196	0.12	109.59	-9.72	100
III	2461379	2814004	3090	2810914	-155289	0.13	106.18	-6.31	100
IV	2601198	2616369	2791	2613578	-98046	0.11	103.66	-3.77	100
V	2895787	2699239	2786	2696453	579201	0.10	79.90	20.00	100
VI	2271982	2316239	2439	2313800	-82001	0.11	103.50	-3.61	100
VII	2280794	2353924	2380	2351544	-77293	0.10	103.28	-3.39	100
VIII	2145742	2357853	2146	2355707	345088	0.10	83.82	16.08	100
IX	1618243	1800928	2420	1798508	-99885	0.15	106.02	-6.17	100
X	1606093	1719043	3335	1715708	668615	0.21	58.16	41.63	100
XI	880399	937311	3168	934143	-52747	0.36	105.63	-5.99	100
XII	797044	934363	4385	929978	792659	0.55	-	-	-
Average Annual  Dropout Rate			Primary Level	-2.00	Upper Primary		2.77	Secondary	17.64

Source: Calculated based on UDISE 2019-20 & 2020-21data.

Based on the above data, an attempt is made to compute the Average Annual Dropout Rate at primary, upper primary, and secondary levels of education (like UDISE+); in the case of the primary level of education, it comes out to be -2.00 which is reported ZERO by UDISE+ 2020-21. On the other hand, the dropout rate at upper primary and secondary levels comes out to be 2.77 and 17.64 percent, which is precisely reported in UDISE+ 2020-21.

 

Table 3: Dropout Rate by Level of Education & Gender, Cohort 2019-20
State /UT	Dropout  Rate
	Primary Level: Grades 1 to 5			Upper Primary Level: Grades 6-8
	Boys	Girls	Total	Boys	Girls	Total
Andaman and Nicobar Islands	2.1	2.5	2.3	0.0	0.5	0.2
Andhra Pradesh	0.0	0.0	0.0	0.5	0.5	0.5
Arunachal Pradesh	9.8	6.8	8.3	8.3	7.0	7.7
Assam	4.2	2.3	3.3	6.0	3.2	4.6
Bihar	0.0	0.0	0.0	2.1	3.4	2.8
Chandigarh	0.0	0.0	0.0	0.0	0.0	0.0
Chhattisgarh	0.9	0.6	0.8	4.8	3.3	4.0
Dadra & Nagar Haveli & Daman and Diu	4.1	3.1	3.6	0.0	0.0	0.0
Delhi	0.0	0.0	0.0	0.0	0.0	0.0
Goa	1.6	1.5	1.5	0.4	0.7	0.6
Gujarat	0.9	1.1	1.0	3.7	5.5	4.5
Haryana	2.2	2.1	2.1	0.0	0.0	0.0
Himachal Pradesh	1.9	1.9	1.9	1.4	1.3	1.3
Jammu and Kashmir	4.5	4.2	4.4	2.6	4.1	3.4
Jharkhand	4.1	2.9	3.5	5.1	5.4	5.2
Karnataka	1.3	0.9	1.1	2.0	1.9	2.0
Kerala	0.1	0.0	0.0	0.0	0.0	0.0
Ladakh	3.8	4.3	4.1	3.1	1.2	2.1
Lakshadweep	0.0	0.0	0.0	0.0	0.0	0.0
Madhya Pradesh	1.4	1.3	1.3	4.7	5.4	5.0
Maharashtra	1.1	0.9	1.0	1.2	1.6	1.4
Manipur	9.0	8.2	8.6	4.3	3.6	4.0
Meghalaya	8.7	6.1	7.4	10.2	7.7	8.9
Mizoram	8.5	7.6	8.1	7.0	3.4	5.2
Nagaland	6.6	5.2	5.9	4.8	2.8	3.8
Odisha	0.0	0.0	0.0	0.0	0.0	0.0
Puducherry	0.0	0.0	0.0	0.0	0.0	0.0
Punjab	0.0	0.0	0.0	0.0	0.0	0.0
Rajasthan	0.9	1.2	1.0	2.5	2.8	2.6
Sikkim	2.1	0.2	1.2	0.0	0.0	0.0
Tamil Nadu	0.7	0.5	0.6	0.6	0.6	0.6
Telangana	0.0	0.0	0.0	0.0	0.0	0.0
Tripura	4.5	3.8	4.2	3.8	2.8	3.3
Uttar Pradesh	2.3	2.1	2.2	2.6	6.5	4.5
Uttarakhand	1.8	1.7	1.7	1.3	1.6	1.4
West Bengal	0.0	0.0	0.0	0.0	0.0	0.0
India	0.8	0.7	0.8	1.6	2.3	1.9
Source: UDISE+ 2020-21

 As it seems, wherever the dropout rate is negative, the same in UIDSE+ is reported to be zero, which confines across all States & UTs of the Country; thus, not only the dropout but also the transition and retention rates across states do not present the accurate picture. In the case of 11 states at the primary and 12 states out of 37 States & UTs at the upper primary level, the UDISE+ 2020-21 reported an average annual dropout rate of ZERO, all of which is negative (see Table 3). For the states of Chandigarh, Delhi, Lakshadweep, Odisha, Puducherry, Punjab, and West Bengal, the UDISE+2020-21 reported a ZERO dropout rate both in the case of Boys and Girls, which is valid for primary as well as upper primary levels of education. With a high enrolment ratio and zero dropout rates, whether these states have achieved the goal of universal elementary enrolment is a moot question that the states and UDISE+ authorities must answer.

 Since the dropout rates computed are based on all schools and not the common ones, the states underestimate the actual average annual dropout rates. Similarly, eight states have reported a 100 percent transition rate from primary to upper primary and 12 states from upper primary to secondary level, all of which are above 100, which is also theoretically impossible.

 Concluding Observations

 From the UDISE+ Portal, it is impossible to download data based on common schools. The UIDSE+ authorities may like to switch over to the previous methodology adopted during 2005-06 to 2017-18 and, in the future, must compute and present flow rates based on common schools. In addition, they must re-compute the same during the years 2018-19 to 2020-21 and replace the same with the current rates so that the same can be used in the Annual Work Plan & Budget formulation under ongoing Samagra Shiksha Abhiyan as the current rates present the misleading picture. It is strange how targets on dropout, transition, and retention rates are currently being set out and how the implementing authorities of monitor the progress of the same and take corrective measures. Or the UDISE+ authorities highlight the benefit of using all schools, if any, instead of common schools and must also explain how the current flow rates are comparable with the same before 2018-19.

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