Tag Archive | "Child Insurance"

Understanding The Basics of Child Insurance

  • Easypolicy
  • 13 Sep 2014

Child insurance has grown and evolved as a concept and is a sophisticated investment instrument these days. With the buzzword doing the rounds all over, what do you need to know in terms of understanding its basics and making full utilization of what it has to offer?

•Child plan is not just another piece of investment. This is a specially floated tool that is meant to give your child the freedom and the financial power that he or she may require at different distinct stages of life. Whether you are looking at higher education, studies abroad, or having them settled in life, there are opportunities available for the different stages and through well-defined policies.

•Flexibility is the name of the game. Whether you call it a necessity on account of competition or willingness to cooperate to different customer needs on the part of the service providers, the fact is that customers have much to gain out of this enticing financial package. Child insurance is not a fixed proposition but is flexible to suit your interests and needs.

•Add Riders to make them even more customized. That is the way you add value to the investments that you have made. You could opt for Waiver of Premium rider, for instance, or a host of other riders available, to make them tailor-made to your requirements. 

As is always the case, the earlier you set off on your road to investment, the better would it be in terms of managing risks and maximizing returns.

basic tips to plan for your child’s future expenses

  • Easypolicy
  • 17 Jan 2014

One thing that no parent would like to compromise with is the future of their child; while parents have strong intentions about carving a good future for their child, they need to ensure that these intentions are adequately backed up with required resources. Once a child completes his basic schooling, parents should be prepared to back up the education plans of their kids by providing required financial support. Opting for a child Policy is one of the easiest ways to protect your child’s future, but before you do that, you need to do a bit of planning.

Step 1 - Understand the Funding Requirement - Develop a Forecast for your Child’s Education Needs

The first step towards developing a forecast for the funding needs is to chalk out an estimate on how much does an education in a college of repute would cost today. Be mindful to add the lodging and boarding costs to the tuition fees. This will give you a feel of the quantum of funding support you would need to lend to your child. But remember the actual requirement will be much more, because you also have to account for the inflation. The right Inflation number to use for your calculation would the inflation in the education costs in the last five or ten years.

Step 2 - Calculating the Current Savings Needs for Meeting the Future Funding Needs

With the funding requirement in place, what you need to estimate now is how much you would need to save annually, so that you are able to generate enough funds for the future. If you have about ten years in hand before your child goes for his college education, you need to back calculate your annual savings requirement. The most crude way to do so is divide your funding needs by the number of years you have before you child goes for his college education. This would give you an approximate estimate and this would be higher than what you would actually need to save. The exact amount of saving required would be lower and would depend on how you invest your savings.

Step 3 - Where to Invest your Savings

The kind of avenues where you invest your savings would determine the annual rate of return that you can expect on your savings. However beware that any extra return that you intend to make will have to be supported with a corresponding Risk appetite. If you are looking for low to mid teens returns on your investment, you can opt for mix of debt and equity, while if your risk appetite is low, it is better to invest in a debt fund, which will protect your principal and promise mid to high single digit returns.

Step 4 - Child Plan is the Safest Way to go about Meeting your Financial Targets

It is advisable that you opt for a child insurance plan which will not only help your savings grow, but also provide you the much needed risk cover. In the case of an unfortunate early demise of the parent, the insurance plan would provide your child with the amount of funds that you envisaged before investing. There are many insurance companies which offer online child plan. You can compare child plan online to select the best child plan that fits your needs.