With
the ever rising cost of education, inflationary increase, luxurious lifestyle
pattern etc.; saving for children's better and secured future has become an
important goal for the parents. All parents dream that
their children get to pick the best possible educational institutes or career
options and excel in life without any financial constraints. As parents we can
always postpone or even compromise on our comforts such as buying a home or a
car but we cannot postpone our child's education. Planning allows parents to
support children with special needs required to fulfill their hopes and dreams
in life.
Identify the Needs
As
you identify new needs, you will have to revise your planning structure to
address them. And as and when these goals are achieved, you will need to define
new goals. So it’s a continuous process of better and sound future planning. To
plan the future of your child, it is important to calculate the amount of fund
needed for education, the number of years for which cash flow is needed, and
how far we are from achieving the desired goal from today. Planning ahead and
making investments towards child's secure future at an early stage are the
critical success factors in realizing this goal.
Child Insurance Plan
Child
plans are one such way of securing your child's financial future, and they are
different from mutual funds or other insurance plans in many ways. Child plans
are insurance policies which are either traditional policies or unit linked
insurance plans. Typically, in child insurance policies one parent is specified
as the policy holder and the child is specified as the nominee. The most
important benefit in children’s insurance plans is that even if the parent were
to meet with an unfortunate event your child’s needs would still be taken care
of. If the policy holder survives the tenure of the policy, periodic payouts
are made at predefined intervals.
Importance
Life
insurance policies for children are more affordable than any other life
insurance policy. Investment in children insurance plan is somewhat similar to
an ULIP investment. The only difference is that the investors are the parents
while the final beneficiary is the child when he/she grows up. In case the
parent dies, a lump-sum amount is given to the family but the child plan
doesn't terminate itself. It acts as a corpus that remains intact till its
exact maturity date. The returns on insurance policies for children are
tax-free and can save you a lot.
Conclusion
Most
of the parents opt for the child
plan due to the fear of lack of financial security, untimely incidence such
as death which can seriously hamper your child’s future. A child plan will make
the parent continue investing year after year, thus ensuring that he saves
enough for the kid. Insurers say child plans are structured to meet the needs
of the child and the waiver of premium feature in a child plan is the key
feature of it. When buying child insurance, search for policies that emphasize
on cash value. Most importantly, buy insurance while your child is young to
take advantage of low rates and high returns.
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