Authored Article by Amit Roy appeared on

Tuesday, November 25, 2014

Are you ready to make your child's dreams come true?

Tue, 25 Nov 2014 01:43:19 -0700

It becomes essential for parents to consider various factors to ensure that they are well prepared financially

Right from the moment they are born, as parents, we spend a considerable part of our lives planning for our children’s future. Our hopes are linked to the children’s hopes and their dreams become our dreams. 

I know many parents, including my own, who have sacrificed many things in life, just to ensure that their children don’t have to go through the struggles that they faced while growing up. 

As parents, you want nothing but the best for your children. However, have you considered if you are financially prepared to meet the required expenses for this. 

The world that our children are growing up is very different from what it was when we were kids. The children today have many external factors influencing their decisions apart from their parents- whether it is peers, internet, media or television and at a very young age, many children today have a very well defined concept of what they want to be when they grow up. 

It becomes essential for parents to consider various factors to ensure that they are well prepared financially to provide for their children’s future, the most important of which is investing in a child insurance policy. There are many ways in which investing in a child plan are beneficial. 

Some of the most important ones are: 

# Helps you meet the rising cost of education: Cost of education cannot be underestimated. An annual fee of a good school can run into a figure of at least a lakh. Along with it comes tuition fees, extracurricular activities, hobby classes etc, amounting to a hefty cost. Pursuing a degree in a premium college also comes with a good cost, especially if it is an outstation or a foreign institute. A timely bought life insurance policy, in your child’s name, ensures that these expenses are taken care of. Usually, such policies must be bought right after the child’s birth as they come at a cheaper cost then. Periodical returns from the policy can help you meet goals of school, college and further education of your child, without feeling the financial burden. 

# Helps you prepare for an emergency: Life can also throw in some unpleasant surprises. These obstacles must not come in the way of your child’s education and dream. A good child insurance policy ensures that your child is provided for even if either of the parents suffers a critical illness or faces an unexpected demise. In insurance jargon, this is called ‘wavier of premium’ which basically means, that if the parent is no longer able to provide for their children due to an unfortunate demise, the policy will continue to provide for the intended amount to the child each year, till maturity. 

# Maturity benefit: Child policies are designed in a manner that all expenses can be met till he turns an adult. You should choose a maturity period that you think is nominal for your child - say till the age of 24, by when children usually complete their studies and look forward to earning and living on their own. 

A regular premium payment will put you in a good habit of keeping aside an amount every year, which can help you meet an additional expense where grown up children may need assistance with.

Many parents ask the question- so how do I decide which product is best suited for my child? The truth is, there are no ‘better’ products, as the composition of products being offered by all companies today is more or less similar. The most important thing as a parent is to recognise that it is your responsibility to ensure that your child’s dreams come true and whether you are there to see this fulfilled or not, you should have provided enough towards it, right from the beginning.

(Mr Roy is the Chief Distribution Officer of AEGON Religare Life Insurance)


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