An MBA is a coveted and aspirational educational pursuit that can give a significant boost to your career. No wonder that admission into these courses is highly competitive. However, as a large number of institutes churn out more and more MBA graduates each year, life beyond the MBA degree has become more competitive as well.
The qualitative aspect of these degrees is also under scrutiny: for the lucky few that make it to management institutes, it is not necessary that the degree will equip them with leadership skills needed at the managerial level, or impart knowledge of issues that extend beyond the ledger. According to a study by the ASSOCHAM Education Committee (AEC), it was noted that only 7% of the pass-outs are actually employable in India, with the exception of graduates from the IIMs (Indian Institute of Management).
The figures are abysmal on the ROI front: you may spend nearly Rs 5 lakhs to Rs 10 lakhs on a two-year MBA programme, but for many the current monthly salary is a measly Rs 18,000 to Rs 25,000.
This brings us to the other important concept in this discussion: ROI, or return on investment.
The most effective way of looking at ROIs is by accounting for the returns coming in terms of salary over several decades of corporate life after an MBA. However, students keen to know the immediate and effective return want to look at the years immediately after, which essentially means they are looking at the salary packages being offered.
The following chart shows us what these numbers look like:
The heartening bit is that salary is not the only return one gets – personal development, managerial knowledge, and technical skills are part of the package. Unfortunately, they will not recover the financial costs of the MBA fees. Surely, as a parent, you don’t want to compromise on the kind and quality of MBA education your child receives. In a world with ever-increasing competition, this may mean that the investment you make does not come back for a while after your child successfully receives their degree.
The instinctive resort to finance such an expense is an education loan. The fact that the majority of the colleges in India are privately-managed and unaided has led to a higher requirement for student loans. As per the National Survey Sample Report 2014, the average annual expenditure on technical/professional education in private aided and unaided colleges varied between 1.5 and 2.5 times to that of Government institutions.
The debt can be crippling at times, as reflected in the overall delinquencies at 7.67% at pan India level between the years 2015 and 2017. You don’t want to risk such a stressful situation, especially when you can choose to go the alternate route: an easier, smoother and smarter way of financing your kid’s education. The best way is through an investment plan with child insurance.
What is child insurance, and how can it help?
A good child education plan, such as the Bajaj Allianz Goal Assure, available on Finserv MARKETS, provides your child with the financial protection needed to receive a great education, even in your absence, sans any burden of repayment. In a child education plan, you get the dual benefit of saving and protection. How to invest for the future so that you can rest worry-free?
A unit linked insurance plan is an investment cum insurance plan which can help secure your child’s future financially, giving you dual benefits. First, you can create a corpus to fund your child’s education so that in the event of your death, a sum assured is given to the child. Second, it provides you financial security, as you can use the child education plan funds through partial withdrawal facility to finance the important milestones of your child’s life.
Get a unit linked insurance plan based on your child’s education needs, your financial capability and other saving goals from the fantastic range of options available on Finserv MARKETS so that your child can receive an education worry-free!
Also read in detail about the ULIP tax benefits you can avail with investment plans available on our platform.
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