The arrival of a child brings a bundle of happiness along with a great sense of responsibility. For parents, their children are the main priority in life and when it comes to the child, every parent wants to provide the best of everything to their children. However, the uncertainties of life can hinder the happiness of your family anytime.
In order to facilitate your child with the best of everything, a proper financial planning to ensure the financial security of life is the need of the hour for every individual. For every parent, it is the wisest decision to save the money for the children’s future so that their lives stay financially secure even in the event of the parent’s death.
With the booming inflation in the country, there are many questions that strike the mind of a parent like how to secure the future of the child? What investment options should we look for? How to provide them financial security even in the absence of the parent? Etc. Well, here, we have elaborately discussed how to make the right investments for your child so that you can secure your child’s financial future and host them with both short-term and long-term advantages.
Before you keep away all your hard-earned money, it is better that you give yourself some time to make a robust financial planning. So, the following tips will help you to make an appropriate investment planning for ensuring a stable future for your child.
- Have Full Understanding of your Plan
The earlier you start saving in life the better returns you will be able to reap in the long run. But it is always advisable to plan before you start your investments. As per your choice, you can choose from two type of maturity benefit: Firstly, you can opt for a money back plan that provides a guaranteed payout in the proper intervals of time even before a lump-sum payout is paid. Secondly, you can avail the maturity benefit as lump-sum payout after the completion of the whole tenure of the policy.
Certain things should be kept in mind while planning for your child’s future. First, in order to fulfill the current and future financial needs of the child, you should plan how to collect a good amount of corpus by means of a smart investment. Secondly, protect your child’s future with a child plan so that his/her future remains secure even if something unfortunate happens to you.
- Set your Goal
It is very important to set a goal before you make any investment decision. However, the individual goal can vary from person to person. The financial goal set by you should reflect your estimated future needs as well. For example, if you are looking for a long-term goal that can provide capital for your child’s higher education, then you should invest in child education plan. If you want to save money to accomplish the major milestones of your child life like marriage, buying a home or supporting them in their initial careers, then investing in a unit-linked child plan is the best option. Although stock markets have a higher level of risk along with good returns, investing in stock market can turn out to be a good choice for your child in a long run.
It is important to set your priority and at least invest in one low-risk plan like public provident fund (PPF) or endowment type plans so that you have enough financial backup to easily fight the inflation from your side. The timely investment on these plans open doors of sufficient funds so that your child can easily pass every milestone in life.
- Choose an apt plan to secure your Child’s Future
Just investing in any plan is not enough, it is important to choose the right investment plan. Before investing in any child plan, one should consider several factors such as family income, how much money one can invest, level of risk tolerance, financial goal and for how long one can stay invested etc. So, before making your investment decisions, it is important to analyze all these factors and try to avoid investments that include higher risks. Empowering your child with proper life cover and financial protection is certain obligation of the parents that cannot be neglected.
- Cover the Risks of life with a low-cost term insurance plan
A child insurance plan is probably the most important instrument in which you need to invest as soon as you start your family planning. It is advisable to buy a term plan as well. As compared to the money back plan or endowment plan, a term plan provides coverage that is at least 10-12 times of your annual income.
- Buy a Child Plan
A child plan comes with manifold benefits. So, if you are planning for your child’s future, how can you miss on a child plan? A child plan helps to fund your child’s higher education as well. A dual benefit of protection cum savings is offered by child education plans. Moreover, child plans are designed to offer financial security to children so that their education is not hindered by any kind of unfortunate incident in life.
In case of an emergency, one can withdraw money during the policy term. The withdrawal money can be used for any medical purpose or for medical treatment of the children in case they get ill. One of the most important aspects of child plan is that it provides security to the child from the uncertainties of life. The child plan offers a premium waiver during the policy term in case the insured passes away. In such case, the child receives the lump-sum amount as a beneficiary. The premium waiver rider offered under child plan enables it to continue without any break and the financial burden of remaining premiums is passed on to the insurer.
Rearing a child and constructing a strong financial future for him/her requires a lot of thinking and efforts. This is one of the integral parts of parenthood and is a prime responsibility of every parent. So, in order to make sure that your child’s future is secured, it is crucial to make wise investment planning and facilitate them with all the necessities in life.