Categorized | Child Insurance

Why You Need Child Insurance Coverage?

Child Insurance

Your child would grow up sooner than you think!! Time flies past us so swiftly before we even realize. Being a parent you want your child to get all the financial aid needed to establish a great career and a happy life ahead. I was reading a bestseller book named ‘Rich Dad Poor Dad’ by famous author Robert T. Kiyosaki, the book states that although formal education is not ‘the be all and end all’ of your child’s financial future, it is still very important. The book emphasizes on its famous CASHFLOW quadrant which categorizes people in four different types, namely Employee Quadrant (E), Self Employed Quadrant (S), Business Owner Quadrant (B) and lastly, Investor Quadrant (I).

To be rich one has to be in the business quadrant or investment quadrant. To be a big business owner you need loads of investment and there is high Risk especially if you lack experience, for being an investor again you need lots of money, moreover your investments can go bad and you may suffer losses. A sure way to get financial security is to go in the E or S quadrant wherein you would either be an employee or a professional like Doctor, lawyer, CA etc. To be successful in the E and S quadrant your academic achievements and soundness would give you a competitive edge. And after being successful in these quadrants one can gradually move towards the B and I quadrants. Thus, good education is highly important to take up a high paying and satisfying employment. If you start with a good job you get healthy experience and can save more from the high salary. Then if you want to go in business you can use that experience and savings to invest in the business.

But higher education is very costly. If you are a parent and you belong to either of the first two quadrants, chances are that you won’t have that much spare amount that you can spend 20-30 lacs that easily. The amount increases multifold if your child wants to study abroad and keeping the Inflation angle in mind, the cost is only going to be higher.

Quoting from a book written by celebrated American investment and finance expert, Brian Tracy, “one should always name one’s money. In other words, one should mark the destination of every penny so that you can check your extravagant expenditure and save money for a desired cause. Pre-planned channelization of money promotes systematic investment. Similarly, you should have dedicated savings in the name of your child, so that when he grows up he has enough money with him to pursue desired studies for which he is capable or for marriage.

The best bet is to invest in a child insurance plan. These plans are specialized child protection plans that help the child in two ways or two scenarios. First scenario, they provide a fund in which you keep investing money in the form of premiums and your money grows over a period of time called accumulation period. At the time of Maturity of the Policy your child gets the money. Second scenario, life is very unpredictable, you would do anything for your child while you are alive but what if something happens to you? Here the insurance aspect of the child plan takes prominence. If you die during the currency of the policy, the insurance company does not terminate the policy rather invests in the fund on your behalf and also pays a sum called Death Benefit to the guardian of the child for the maintenance of the latter. Thus, in a single plan you get the benefit of insurance and investment.

The motto of these plans is ‘your death shall never be a hindrance in your child’s success path’.  If your child is bright he should get his share of opportunities to explore his potential. You have trained him to be successful, don’t let a little lack in your planning to spoil that common vision you and your child share. Compare child insurance plans to have the soundest product at best prices and take the first step towards filling your child’s future with opportunities.

The sooner you start the wiser. Delay would cost you more in the form of rising inflation and lesser time to accumulate money. Even if your child is an infant, don’t think that a lot of time is left with you. Experts say that you should start studying child plans as soon as you know that you are expecting a child. Start at your earliest to avoid burden later.