Essential Steps To Secure Your Child’s Future | SupportBiz
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Essential Steps To Secure Your Child’s Future

Tags: Insurance
Ensuring a secure future for the kids is the foremost priority for any parent. In today’s challenging environment and fast changing opportunities, it is easy to be lost and caught unprepared with the goal. However, it is not difficult to achieve your financial goals comfortably if you take care of the following in time.

The essential steps to secure your child’s future are:

1.Planning Early

Figure: Compounded growth of Rs. 1000 at 10% P.A.

Time is an absolute necessity when it comes to money matters. As a simple rule of compounding, money can grow exponentially if allowed enough time.

Since we all have very limited time to earn and grow our money, it is utmost important that we start planning early, so that we can start investing early.

To safeguard the future of your child, you will need to plan for his/her education and other necessary expenses, till the time he/she can be professionally stable and financially independent. This includes planning for their:

-          Higher Education Expenses

-          Living and other expenses when planning for education abroad

-          Sports and extracurricular expenses when planning a career in sports

While planning, consider an approximate cost and the inflation to ensure better coverage of the goal. Also, not to forget is the tax deduction on the education loan and the freedom it gives to you for planning other expenses like marriage and house for your kids.

2.Start Investing

Planning early is good, but without implementation, it is nothing more than a day dream. So how do you implement? Implementation is easy if you keep the following in mind:

A.      Keep it simple

B.      Focus on Regular Savings

C.      Match savings frequency with your income frequency

D.      Do not commit all your savings to one investment

E.       Just start investing even if it is just Rs. 500 a month, you can increase the amount later but developing the habit is more important

Where to Invest?

This is the biggest question in planning and investing. However, the decisions should be simple and easy to implement, so here is a list of investments you should use for implementing your children’s plan:

Ø  Child Plan

o   Provides tax deduction up to Rs. 150,000 p.a.

o   Maturity value is tax exempt u/s 10(10D)

o   Provides life cover, so that if anything happens to you midway, your kids’ future remains unaffected.

Ø  Monthly Investment Plans: Just in case you find that one child plan is not sufficient and you need to diversify, go for monthly investment plans.

3.Safeguarding Against Unfortunate Events

Child plan and monthly investment plans offer similar benefits. However, both cover the risk of premature death only. Therefore, the better option will be to cover other risks, which may hamper your income and affect the goal achievement, as well. Some of these important risks are:

a.       Critical Illness Risk: Life threatening illnesses like heart ailments and cancer are treatable, but the treatment can be quite expensive. Thus, you need an insurance cover, which can bear a large part of this burden in case treatment is needed.

Such health plans have a defined sum assured which is paid to the insured upon diagnosis of one of the critical ailments covered by the plan. Since heart and cancer are two most common type of ailments, insurers like ICICI Pru Life offer separate insurance cover for the same.

b.      Health/Hospitalization Risk: Normal hospitalization risk is greater than the critical ailments. Even though the expense may not amount to much, it still has the potential to disrupt your saving plans, and force you to dig in to your long-term investment. However, this can be avoided, by purchasing a family floater/individual health insurance, which will take care of such expenses to a great extent.

c.       Term Insurance: While the child plan or monthly investment plans cover the cost of goal in the event of unfortunate death of the investor, term insurance will take care of all the other living costs.

How to Invest and Buy Health & Life Insurance Plans?

Nowadays, you can invest in child and monthly investment plans from the comfort of your home or office, at a convenient hour. Even buying insurance covers like the health insurance and term insurance is possible online without indulging in much paperwork. If you are worrying about the support, it is available through 24x7 chat, or you can request a call back for any questions you have about the application form.