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Remove All Obstacles & Help Your Child Attain Greatness
Plan Your Kid’s Future Financially with a Child Insurance Plan
Planning for Your Kid’s Future
Only 24 percent of parents are financially preparing for their child’s future, according to survey findings published in Jagran Post in March 2016. The survey analysed answers from 11,300 parents from across seven cities in India. Are you one of those parents who feels that they are not saving enough for theirlittle one’s future? A child brings endless joy when s/he is born and you do not want anything less than perfect for them. To turn their dreams into reality and to be their stepping stones at important junctures of life, you must plan their future financially. Being financially ready can help them get the best education or even setup a business. And all this can be efficiently done with a child insurance plan.
What is Child Insurance?
A children’s plan is an insurance policy that you buy in your name but is actually meant for your child. Such policies are traditional participating plans. You can choose from among various term options. However, there may be minimum and maximum term limits. Such policies have a specific premium paying term as well. Your kid will not only get a payout at the end of the maturity period but a certain amount will also be disbursed at various milestones of his/her life, such as when s/he is moving to college. This policy continues to exist even after the death of the insured. The sum assured is paid to the nominee in case of death of the insured and the future premium payments are waived off. Bonuses are paid on the maturity date. You can also take a loan against such a policy as outlined under the benefits section of the Birla Sun Life Insurance website. Buying children’s insurance can help you insure your tiny tot’s future even if you are not around. You might have life insurance in place but that does not guarantee that the sum assured would be used in the best interest of your child, unlike a child policy where only the nominee is eligible to receive the money.
Why is it Better than Other Options?
A survey, published in an article in The Times of India in November 2015, revealed that 93 percent of parents claimed to have planned for their children's future by way of saving. However, they preferred to do so through bank fixed deposits, recurring deposits and loans. Such methods offer low returns and barely meet the inflation rate. Contrary to such methods, an insurance plan for children offers higher returns and can help you efficiently fund your kid’s future expenses. It also offers assured payouts.
Choosing a Plan
Education costs are one of the biggest concerns today. With rising competition and increasing costs, it is likely to get all the more difficult to get admissionto the course and institution of your choice. The cost of higher education is rising at 10-12 percent per annum. A four-year engineering course amounted roughly to Rs 6 lakh in 2015. By 2027, the same course will cost no less than Rs 24 lakhs, estimated an article published in The Economic Times in January 2015. While buying a policy, do not invest in a plan without adequate research. You must draw out an expense that you might have to incur on your child’s education and marriage. Choose a policy that can help you build a corpus to fund your expenses at a minimum cost under your chosen investment time horizon. You can also consult a financial advisor to help you choose a policy. The earlier you start, the better it is! If you start early, you can build the same corpus by contributing a lesser amount each month as outlined in an article in published inMoneycontrol in August 2013.