3 Critical Pillars For A Secure Future For Your Child
Published On Oct 28, 2021
Table of Contents
- Variety Of Options For Securing Your Child's Future
- Few Helpful Tips for Protecting Your Child's Financial Future
Investment plans for children can assist offset such risks, allowing the child's education to continue uninterrupted. Life insurance policies serve two functions. They do two things: one, they provide financial stability for families, and two, they build wealth through investment-linked programs. Child plans are designed to help children reach their goals while also benefiting parents with tax breaks and greater money. There are few investments that ensure a child's aspirations are met regardless of circumstances. The extra benefit of partial withdrawals is that they allow parents to satisfy financial needs at critical educational milestones in their child's life while simultaneously obtaining tax relief under sections 80C and 80D.
Variety Of Options For Securing Your Child's Future
Some of the several investment options from which you can choose to spend your money are as follows:
1. Mutual funds or SIPs
SIPs (systematic investment plans), sometimes known as mutual funds, are among the best long-term investing options since they allow you to contribute a certain sum at predetermined periods. Investments as little as Rs. 500 can be used to replace lump-sum payments. Mutual funds implement Systematic Investment Plans (SIPs). Mutual funds can be purchased using one of two methods: systematic investment plans or lump amounts. In most circumstances, the benefits outweigh the costs of the investment.
2. ULIP ( Unit Linked Investment Plan)
A ULIP, which blends insurance with investing, is the most cost-effective method to invest. ULIPs enable clients to invest in a wide range of funds, including stocks, hybrid, and debt funds. Long-term investment policyholders should consider ULIPs as an option.
3. Policies on Endowments
Endowment plans are life insurance policies that provide a lump sum payment when the policy expires or the policyholder dies. Endowment plans combine life insurance with a limited tolerance for risk. These programmes offer a tax break, a bonus at maturity, and life insurance coverage. Endowment plans are intended to cover costs such as children's education, marriage, and home ownership.
Few Helpful Tips for Protecting Your Child's Financial Future
Here are a few ideas to help you preserve your child's financial future:
1. Make a Financial Strategy
The first and most important step toward securing your child's future is to develop a financial plan. It is advised that you develop a strategy that considers your existing financial situation, such as current expenditures, predicted long-term/short-term needs, outstanding debts, and so on. It is also critical to account for the rate of inflation when creating a financial strategy. Your financial plan should handle all of the difficulties raised above, as well as provide financial help to your Child in the case of your untimely death.
2. Inflation Estimation
Because the majority of child insurance plans are acquired for the long term, parents must realise that when investing in a child insurance plan, the funds must account for future inflation costs. This will help you make wise investments and build a solid financial basis. It is also critical to understand how long it will take to obtain the findings.
3. Purchase a Good Child Life Insurance Policy
Choosing the best Child life insurance plan is an essential factor to consider while budgeting for your child's future. As the family's sole breadwinner and parent, you should consider purchasing a child life insurance policy, which will provide you with life insurance while also assisting you in building a corpus for your child's financially secure future. In the case of your untimely death, adequate child life insurance coverage will assist ease the financial burden placed on your Child.
As a parent, you don't want your Child's future and objectives to be limited by a lack of financial resources, which is why, as soon as you become a parent, financial security for your child should be your first concern. It is vital to choose a child life insurance policy that will offer financial support to your child in the case of an emergency.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.