help create a corpus for crucial stages in the child’s life
The other day I was reading a book written by a famous American investment and finance expert, he at numerous times highlighted the importance of ‘naming’ your money. Naming of money means you should allot a destination to every penny you make and spend that money only for that purpose. Like, you should decide a specific amount you are going to spend on groceries in a month and restricting your expenditure on groceries to that amount. Similarly, for every commodity and service you should name your money.
This practice makes you know how much money you are spending and how much you can save. You should have some saving goals. Similarly, we should have clear objectives from our investments. If you are investing money you should know why you are investing in that particular scheme, what returns can be expected from it, the Risk it carries, the gestation period and liquidity of the investment and also the purpose you are looking to be fulfilled from that investment.
The bottom line is, there are only two ways you can earn money. First, by working for it and second, when your assets work for you. Keeping idle money in your pocket would make you heavily dependent on your savings and as per the concept of ‘time value of value’ you would be depreciating the value of your money by keeping it idle.
Among the many reasons for people to invest a major one is to secure the lives of their children. Specially, in Indian culture the parents are expected to take full responsibility of their children up to an extended age. Generally, Indian children don’t contribute to fund their studies or marriage. Thus, whole sole responsibility is on the parents. Thus, your investments should make you end up with enough resources to fund the higher studies and marriage of your children.
That is a big reason that Indian families prefer having child insurance plans in their investment kitty. Child insurance plans are specialized financial products designed to secure the future of your child. It helps in building a good corpus by the time your child attains the age of higher education. These plans even protect the child against the financial consequences of your unfortunate death during the currency of the policy.
Other investment schemes cease once the investor dies but it is not the case with child insurance plans. In case of death of the policyholder the Policy continues and no future Premium installment is to be paid by the child or its caretaker. Moreover, the company pays a pre specified death benefit amount for the upkeep and maintenance of the child. Thus, benefits of both life insurance and investment are availed in a single plan.
Keeping in mind the soaring education costs and general inflation a dedicated child insurance plan is the need of the hour. All responsible parents understand the value of good education and the fierce competition around. As much as the hard work of your child your smart financial planning is equally, if not more, is required to build a successful career for your child.
So, if the bright future of your child is one of the objectives behind your investments, you should consider investing in child insurance plans. One important tip is compare child plans of various companies to cut the best deal.
The sooner you start the better. As with various other types of insurance products, the premium keeps increasing the later you invest. Start while your child is still little to accumulate the required corpus. Time flies faster than we realize. The earlier you enter such plan the larger corpus you build. Keeping the factor of Inflation in mind, you understand the importance of a bigger corpus. Thus, time is of huge essence.
You do your bit by planning for the finances and let your child resonate his gratitude in his grades and efforts. Such planning not only provides financial soundness but strengthens relations when your children honor your endeavor for them. They acknowledge your sacrifice and learn how to shoulder responsibilities.
Such plans are very essential for the overall upliftment of the society. The more educated the society is the better it can lead the world towards development and harmony. It is very essential for children to get good opportunities to rise and achieve their dreams. Invest carefully and make your children feel proud of you.