Monday, October 19, 2015
Plan and save regularly to secure your child’s future
Amit Kumar Roy
We all look at our children as the best creation of God and probably look at them for fulfilling all the desires that we had in our life. We expect our kids to be the best in every possible field and trust me there is nothing wrong in this.
I know parents who sacrificed many things in life just to ensure that the kids get the best of everything in the world...including my own parents. In many places we get into this discussion — are we saving enough for them?
Should abundance of love and indulgence of material gifts be the ultimate solution to raise them rightfully? Accompanying them to schools, hobby classes, sports academics and extra-curricular classes — is that enough? Sitting through their preparation times in exams, sharing those childlike pranks, getting the vaccines in time — are we through with our obligations?
While all these are important — even pampering with latest gizmos is fine...what should also be kept in mind is financial planning. As our children grow, the requirements of school fee, project items, those extra classes and of course the higher education will actually entail much more than we expect. I know parents sacrifice their own joy, happiness, even basic living requirements, raise huge loans to ensure the best of grooming for their children.
While I do not say that this should not be done — I am just saying that this can be avoided by some prudent financial planning and a habit of regular saving. Both the saving and the financial planning can be done through many available products in the market ...but what child products in insurance does is a little different.
These products do not offer best of the returns but the plan that you make regarding the money requirements that you plan for the child gets fulfilled invariably — with the parent being or not being there.
What that means is these products actually cover the person who is supposed to save money for the child and God forbid if anything happens to the parent — the coverage still allocates the intended amount every year. In insurance jargon this is called waiver of premium — and I believe this feature makes the child insurance products absolutely distinct.
The dream of making that tiny tot a doctor, engineer, CA, IT champ or anything that you may be planning — gets fulfilled without hassles, because the amount is paid to the family by the insurance companies even when the premiums are not paid (in case of unforeseen death of the parent).
Many friends ask me how this is different from say a term cover...frankly not much. But the very fact that the instalments are planned to be paid at various stages of child education and career makes these products stand out. You know that your child will never be in peril for want of funds. What if nothing happens — well the policy matures after the term gets over and the pre-decided amounts get paid with some bonus.
You know that the money coming on completion of term of policy is not yours — you actually bind yourself for a cause...the greatest cause that came with greatest happiness of being a parent. There is nothing like a best product — the compositions are more or less similar with all companies. Just have a discussion on the features and spare some serious amount from your earning for that little thing that means life to you and me.
The author is Chief Distribution Officer at AEGON Religare Life Insurance. The views expressed in this article are his own