What is the use of Children plans

It’s an awesome feeling to welcome your child in this world. Parenthood is one such phase in your life which makes your life worth it. This new bundle of joy brings along with it many responsibilities and as a parent it is your foremost duty to give the best of everything to your child.

But it is easy said than done. In today’s world where costs are sky-scraping with lightening speed, saving has become the last option.

However this can not be sited as an excuse because when we find it so difficult at this point of time then it is obvious that it will be unimaginable when your child grows to an age where you have to consider their higher education, marriage, health and so on.

Also read: Financial Planning for your Child

Children insurance plan is a combination of insurance cum investment. The investment can be started right from the time the child is born. There are various children insurance plans in the market. You can insure according to your need, in other words you can insure for your child’s higher education, marriage or even health. Each plan has its own significance. These plans can be encashed after the maturity period. However there are certain plans which allow you to withdraw a fixed amount at regular intervals. 

Benefits of children health insurance plan:

• These plans are very flexible; the premium rate ranges as per your interest, they are no longer a costly affair. You can choose a plan in accordance with your financial status.

• The sum assured plus the guaranteed participating amount is given to the parent/guardian after the maturity period. In case of early death of the parent then the child is entitled to all the benefits of the plan.

• Most of the insurance companies have inbuilt premium waiver feature this feature makes your policy stay alive even if the payments are not made due to varied reasons. Incase your insurance company does not offer this feature then it is suggested to take a separate rider.

Apart from these benefits, the parents are spared of the bother, by insuring for their child’s welfare right from his/her birth.

 

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Financial Planning for Child’s Future & Education

Investment in Child’s Future and Education is a wise financial decision. There are several Child Insurance plans available in the market. Although I do believe that ..Investment + Insurance = Worst Combination. But to protect your Child’s future you should opt for a No-Frill traditional child plan with no exposer to the stock market. Strictly avoid money back plans as they further reduce  return on your investment.

 

Secondly invest in 5 star rated Equity Diversified Mutual Funds  that can give you excellent returns in the long run.

While the management fees of Mutual funds are very low. Why not just invest in Mutual Funds rather than in Insurance Plans ? In my opinion, everybody should choose 4-star or 5-star rated Equity Diversified mutual funds but to cover losses in case of un-timely death of parents, one should go for a combination of insurance too. Why, because in the Child Insurance policy Sum Assured plus accrued bonuses up to maturity is payable on maturity even though parents death occurs during policy term.

SIP is the best way to start. Just remember to not forget to shift your corpus to Debt Mutual Funds just before 1-2 years of your goal, say your child’s 18th birthday.

And yeah, it is advisable to open a separate account for your child. What you can do is: you open a separate minor account for your child and save money in that account and do SIP via that account. If you have an account in your child’s name then you will be more emotionally attached towards it and save regularly in that account.

Anyway, what are you looking for? Start Investing for your Child’s Future Now. 

Financial Planning for a Child’s Education

Planning your child’s future is very important. And Education is the most important expense for your child. Here are the few things that you should keep in mind before planning your child’s education fund

1) Invest Early: This is very important. The compound interest is the greatest force in the universe. So if you start early then the compound interest will work in favor to make you rich. And you will be able to build large corpus … that’s just the law of the Universe.

2) Choose Growth Option: Choose 4-star or 5-star rated mutual funds and always go for Growth option.

3) Go For SIP: Rather than investing lump-sum amounts irregularly, it is advisable to invest small but regular amount of money.

4) Switch in Time: Just 1-2 years before your goal, you should shift your fund from Equities to debt. That’s because during the final years of your goal, your aim should be to protect the capital

THE COST OF EDUCATION IN FUTURE:

Always consider inflation rates while planning your financial goals. Remember education fees go up.

Summary -

Two things are very important in planning your child’s financial future.

1) Start Investing Early &

2) Inflation Rate Consideration

If you can manage the above 2 factors, then you are a Winner

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