How to secure your child’s future?

Becoming a parent is the most joyous moment in one’s life. Along with happiness comes the responsibility of raising a child and ensuring a secure future for the child. You as a parent have to provide means to help your child achieve their dreams and career goals.

This is easier said than done, unless you have a financial plan in hand to sponsor the expenses and costs involved in providing the best for your child. In this era of competition, you need to give your kid the right guidance backed with a robust financial corpus to combat the sky rising education costs.To ensure that your child achieves his or her goals, you need to plan right from the day the child is born or even before. With the rising cost of education, school tuition fees, university education costs and other vocational expenses cannot be managed by a parent unless creation of a corpus is planned for in advance.

The biggest worry for any parent is the risk of their own uncertain death. In such a scenario, a child’s future should not be left looming under cloud of financial uncertainty.

Child Plans:

The perfect way to gift a secure future to your child is through a “Child Plan”. A child plan is a one stop shop solution which comes in the form of a life insurance plan offering financial protection to your child by creating a corpus to meet the financial requirements at regular intervals to achieve various milestones in child’s life. Regular periodic payouts during the milestone stages of childhood, reduces the financial burden and allows you to meet various education related expenses and other needs of the child.

Types of Child Plans:

• Traditional Child Plans: The traditional child plans are conventional life insurance plans which offer a safe and guaranteed return on death and/or maturity of the policy to achieve the target.
• Unit Linked Child Plans: Unit linked child plans are market linked life insurance plans which offer a dual benefit of investment with insurance to build a corpus for your child’s educational needs as per your invested fund/funds. It works like any other unit linked insurance plan with some inbuilt features to make it a child centric insurance product.

Step by Step Financial Guide for creating a Financial Plan for your child:

Step 1: Knowing the investment target i.e. how much corpus is required for the education of your child considering inflation in mind. For example, you need 50 Lakh corpus to sponsor the university expenses.

Step 2: Knowing the child’s age when the corpus is needed. For example, you need a lumpsum amount when your child turns 18 years. This will further help you to ascertain the ideal policy term for the child plan. If the current age of your child is 3 and you need a corpus when he/she turns 18 years, the ideal policy term is 15 years (i.e18 years minus 3 years)

Step 3: Knowing the amount to be invested regularly to get the required corpus in a certain period. This is basically the amount of premium you need to invest to create the desired fund for your child.

Step 4: Choosing the best plan for your child which offers you bundle of benefits and a customised solution to suit your requirements.

Final word:

Giving water, sunlight, manure to a seed timely will turn it into a plant and then a big tree. Same way, it is important to plan for your child’s future and start allocating the funds through systematic and disciplined saving habits to create a corpus which can fulfill the dreams of your child without any hindrance. The bottom line is to make a financial arrangement so as tohelp you enjoy the growing phase of your child with a peace of mind.

AN Oct 45/17

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