The birth of a child is a life-altering moment in the lives of all parents. Bringing a new life into the world also brings with it huge responsibilities which is why parents need to plan everything in advance to secure their child. As a child grows up, many financial liabilities fall on the parents’ shoulders and they become extremely apprehensive about their children’s future.
Every parent wishes to fulfil all the dreams of their child and take care of their growing needs. From time to time, most parents have anxious thoughts like what will happen to their child’s future if anything unfortunate happens to them or will they be able to save enough to fulfil the dreams of their child. They often ponder over various options to safeguard their children’s goals of achieving a perfect career, pursuing their passion for music or sports, or arranging for finances to fund their higher education.
With uncertainties dominating the economy, volatile market conditions, increasing inflation and weakening of the value of rupee, it has become extremely important for parents to have a robust financial corpus and a strong child plan in place. It is prudent to start financial planning at the earliest and purchase a child plan that provides a cushion against unforeseen circumstances in the future.
Having a child plan helps parents to ascertain a minimum fund amount that is required to secure their child’s future and save up the desired sum for the child’s requirements. To begin with it, parents must first assess their income, pattern of savings and expenditure as well as evaluate their current investment portfolio, assets and liabilities. Parents must also remember to factor their health and medical condition before setting up their corpus amount for the child savings plan.
A child plan is a one stop solution that offers dual benefits of protecting a child’s future along with offering financial security to them. These plans prove to be beneficial in a child’s life when they provide a helping hand to accomplish various milestones. Most child plans available have multitude offers and features that parents can make the most of. They provide security to the child’s aspiration even in the absence of his/her parents.
When the policy term of the child plan is over, the beneficiary (the child in this case) receives the maturity amount and is free to invest the sum in other financial options. In case of any unfortunate happening to the parents who pay the premium on this policy, there are death benefits equipped to ensure there is no lapse in the policy. The nominee is paid the amount at the end of the policy term and rest of the premium is usually waived off. Child plans can also be treated as a financial legacy left by parents and grandparents for safeguarding their children and grandchildren.
Spending quality time with children and thoroughly knowing their interests and pursuits is the need of the hour. This comes handy while conducting future planning and taking a rational decision regarding a policy. Knowing the child better will open the parents’ eyes to all the recurring costs that can continue for the next twenty years at least. This will determine the lump sum amount that can be set aside and invested in the present for future stability.
Most child plans today are very flexible and can be tailor-made to suit the future financial needs of each child. In order to suit families with various risk tolerance profiles, child plans are available in the form of unit-linked plans and traditional savings plans. However, just having a strong investment or savings plan is not enough, as it is crucial for parents to get insurance for their children as well. By opting for all these plans early in life when the child is still very young, parents get the ability to bear higher risks in the future and chalk out an ideal financial corpus that can cover several aspects including the child’s higher education, healthcare, and even marriage.
Practicing financial planning for children and reviewing the child plans regularly builds a strong habit and provides insights to parents for adjusting personal investments and developing better strategies for saving. This creates a sound and stable system in the family and aids them to achieve the goals they desire.
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