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How to Save for the Future of the Child?

When you become a parent, the child becomes the centre of your world. Like any parent, you would also want a bright and secured future for the child.

Education plays a vital role in the development of the child. Someway it gives wings to the child to dream, aspire, fly high and achieve financial liberty. Like any parent, you would also want your child to get the best education. However, in these testing times, a major concern remains the rising costs. Now, the rising education costs could be one of the leading financial concerns.

As parents, you would want the best of everything for the child, for instance,   schooling, college/university and so forth. The best thing you can gift your child is a financially secured and bright future. And you can do so by investing in child insurance. 

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Why Child Insurance Plan?

A child policy is the popular financial vehicle that would enable to build of the wealth corpus for the child. A child plan will take into account the different milestones in the future of a child for, which a substantial sum is required.

People also think that investing in a child plan is not a great idea as a child does not hold a financial value, which means that there is ideally no insurable interest and no liabilities as such. There is also a common misconception for the child policy that insured life is the child. Whereas the truth is that in a child insurance plan, a child is a nominee and the life assured is the parent.

The table below clearly highlights why you should consider investing in a child policy:

Without Child Plan

With Child Plan

The future of a child might get affected because of the lack of funds or any resources at any important milestones.

The financial future of the child is always safeguarded and not take the stress of any financial losses.

In case the earning parent is no more the child most of the times have to depend on others for any financial aid.

In case the insured passes away untimely, the future of the child will be always protected and day to day expenses will be taken care of as well.

In case there are no sufficient savings, the child might end up facing financial problems to get into a certain university or even study abroad.

The child can take admission anywhere PAN India or even take admissions in a foreign university and not worry about the finances.

If there are no investment plans in place or sufficient savings then expenses for marriage, etc. will become a burden.

Every important expense will always be taken care of and not putting any burden on the shoulders of the child.

Still, wondering if you should go forward with a child plan? Well, let us briefly consider the following pointers and get clarity straightaway.

Understanding the Dual Benefit of a Child Plan

A child policy provides the double benefit of both insurance and investment. Well, a child insurance plan protects the different milestones in the life of a child by simply providing an insurance cover. Upon maturity, the proceeds can be used to fulfil any financial needs.

A Collateral for Loans

Most people are unaware that a child insurance plan does have a surrender value. This means that it can be offered as collateral to access a loan; however, on the premise of the underlying fund value, the amount for the loan will differ.

Aiding the Education of a Child

One of the best things as parents you can do for the child is providing them with education. We all are aware that quality education comes with a certain price. Right from the basic tuition expenses, co-curricular activities, any field trips, projects, and so forth these expenses add up to an amount significantly. Under any such scenario, the market-linked investment plan enables to obtain high returns and making the portfolio inflation-proof.

Waiver of Premium

In case the parent passes away untimely, the insurance company offers the waiver upon the premium on the child plan and the nominee who is a child will receive the lump sum and therefore, no longer child insurance premium payment need to be paid. This means the child is eligible for a lump sum amount for the future.

Wrapping it Up

A child insurance plan is ideal for those parents who wish to build a desirous corpus for the bright future of a child. As parents, the most important duty is to safeguard the future of a child. A child plan will provide a protection net to your child at any stage of life.

A child plan is more like a stitch in time. Invest in the child plan and save the nine for later. This means that the financial future of the child is secured.

The future of the child is in your hands.

Go Invest, Now!

Written By: PolicyBazaar - Updated: 30 April 2021
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