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Family Financial Planning Guide

Feb 22, 2019 | 1 year ago | Read Time: 3 minutes | By iKnowledge Team

If you are planning to start a family, use this simple checklist and begin your financial journey, today.

The journey from a young professional with fewer responsibilities to a couple with joint responsibilities to bringing a child can an overwhelming experience!  This gives rise to the most common question, “whether there is a right age to start a family”? There is nothing as right or wrong time; it is more about evolving mentally, physically and financially to take up this responsibility.

Budgeting Your Expense

Budgeting? This may sound like a simple task, but it is an important step. For instance, Anil and Meera are married for last five years and are a living a life they love, without keeping a tab on their expenses, savings, investments and more.

Now, they want to start a family and are unable to understand how to manage their money. Why? Due to lack of money management. In such a scenario, budgeting helps immensely.

If you are not in the habit of writing down your expense, inculcate it. Sit with your spouse and prepare a monthly budget which includes fixed costs, variable costs, and one-time annual costs. Your fixed costs will include your TV, internet bill, and utilities, insurance and so on. Variable costs bracket includes your daily groceries, toiletries, money spent on traveling, dining, etc. While your yearly taxes, registration, renewals will come under the one-time annual costs bracket. Keep these brackets in mind and prepare a budget that will enhance your financial planning.

Eliminate any debt you have before you start a family. If you have a student loan or need to pay credit card debt, pay it off to ensure that you don’t carry forward any financial baggage in this new life stage; parenthood.

It’s Time to Update Financials!

Now is the time to review your financials such as life insurance policy, real estate and more. If you don’t have an insurance policy, purchase a plan and secure your spouse and child, financially during uncertain moments. How to pick one? Research about the various term plans available in the market.  A detailed research will help you make a smart choice. Followed by choosing a premium and coverage as per your annual salary and requirements of your growing family. For instance, Aegon Life’s iTerm Insurance Plan offers a competitive premium along with great coverage. For a growing family, this is a smart choice. Plus, review your assets like real estate and other assets to ensure that your child will be financially stable in your absence.

Emergency Fund

Firstly, create an emergency fund which includes enough liquid cash to cover six to nine months of expense. If you face any medical emergencies in the initial months after the birth of your child, this fund will be of great help. It is highly recommended to create an emergency fund.

Create an Investment Plan for Your Child

As your child grows, his expenses will increase at every stage of life. You need to be financially stable to pay for hidden financial surprises such as activities, classes, camps, and more. Plus, as they grow they will develop an interest in certain hobbies, sports or would want to enhance their skills. In such situations, you will require money to nurture their aspirations.

Instead of purchasing a new toy every month, invest that amount and prepare them to stand tall in life. How? Start investing in Unit Linked Insurance plan, also known as ULIP. A ULIP is an insurance plan where a part of your premium is invested in equity or other investment instruments.  An individual can opt for a combination of equity, debt and money market investments to enjoy high returns. Choose a plan that will suit your needs. Aegon Life’s iMaximize Insurance Plan is a ULIP which offers the insurer a combination of protection and market linked returns. It offers two death benefit options- higher sum assured and income benefit. So, whether you are a first-time investor or a market expert, this plan will ensure a considerable degree of flexibility.

II/Feb 2019/4844


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