CHILDREN’S INSURANCE HELPS GENERATE FUNDS WHEN NEEDED

A child's insurance plan helps you meet later expenses such as education and marriage. Life insurance plays an important role in an individual's financial planning exercise. Insurance can assist individuals in planning for their own life stages as well as provide for their children's future. It also secures a child's future in case of any unfortunate event. Various kinds of child insurance products are availabl [...]A child's insurance plan helps you meet later expenses such as education and marriage. Life insurance plays an important role in an individual's financial planning exercise. Insurance can assist individuals in planning for their own life stages as well as provide for their children's future. It also secures a child's future in case of any unfortunate event. Various kinds of child insurance products are available in the market. Parents need to build a sufficient corpus for their children. They should start planning for their children at an early age. One of the biggest financial commitments for parents is to meet the expenses incurred in bringing up and settling their children. Child insurance plans play an important role in securing a child's future. With a number of children's insurance plans available in the market, it becomes difficult for most parents to evaluate them objectively. The factors to be kept in mind include the timeframe for building a corpus, age at which the funds would be required, approximate amount needed to build the corpus, investment avenues to be considered and the amount available to the child in case of death of parents. As inflation rises, the first impact is on the education sector. Planning for a child's future is an important step. It is advisable that parents go for a term policy. That will take care of the child's financial needs in case of untimely death of any of the working parents. For the child's future, one can create a specific financial plan through systematic investment planning (SIP) in mutual funds. Previously, providing for the child was to just set aside some amount of money in a savings bank account or making fixed deposits with the intention of using the maturity amount. Children's insurance plans aim at providing for meeting expenses of children - education, marriage etc. With the costs going up sharply, it makes sense to plan for insurance well in advance so as to enable provision of adequate funds at the time they are required. It also tends to provide a sense of relief and security for the parents - that they won't be out of funds as an when they are required the most. Parents should always attempt to provide for their children's future by selecting a children's plan that will yield funds at the right time. The most important requirement is providing for education. Children's plans are immensely popular. Almost all insurance companies - public and private - offer children's insurance plans. Earlier, only simple money-back plans were taken in the name of the child. The policy used to provide fixed cash inflows at fixed time intervals. The things have changed now. Now, parents take a term cover in their name, which would be replaced if there is any loss of income due to the untimely death of any of the earning parents. So, it has the twin benefits of investment and protection. One can either invest in traditional child plans or unit linked insurance plans (ULIPs). Traditional plans invest a major portion of their money in debt instruments like corporate bonds and government securities. ULIPs can invest across equity and debt markets in varying proportions. Parents can either opt for a regular traditional endowment plan which carries relatively lower risk since it is invested mainly in corporate bonds and government securities. The bonuses are stable and give the parents considerable comfort knowing roughly how much they can expect. Regular endowment plans are suited for parents with a low risk appetite. Parents with some risk appetite can opt for a ULIP child plan that invests across equity and debt markets. Over the long term, equity can add considerably to the corpus you plan to build for your child's needs. Equity is best placed to beat inflation over the long term. However, to achieve this, you must invest wisely. Debt, on the other hand, brings stability to a portfolio. While the returns from debt at times may seem unattractive as compared to equity, its importance in a portfolio cannot be understated.number of view: 738

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