How to Plan a Secure Financial Future for Your Child From Birth

Aug 30, 2018 | 11 months ago | Read Time: 3 minutes | By iKnowledge Team

Financial Future for Your Child

Having a child is undoubtedly a joy, and with it tags along a great deal of responsibility. This means, when you plan to raise your child in the right environment and facilities, you need to do a bit of financial planning first. That’s because, when you want the best for your child, you must keep in mind the various expenses that you’ll incur in the coming years.

Here’s how you can go about it:

Plan for your child’s future expenses early on

Education costs have been on the rise off late and are only expected to grow further. Inflation can cause costs to spiral further. You can review your plans as and when your child gets older, but it is good to start right at the time of your child’s birth.

Save for all the important events of his or her life. This is crucial as sudden changes can throw you off guard and it is better to be prepared beforehand. Planning early can help you reap the benefits of compounding growth and low risks associated with long-term investing.

Don’t just save, invest

It is but natural to think that saving for your child will suffice for his or her future. Savings aren’t enough to fulfil important goals like education or wedding. If you are putting away money in a savings account, try looking for one that offers high interest rates. Invest in safe instruments with assured returns like recurring or fixed deposits. Some more instruments to consider can be public provident fund (PPF), long-term fixed deposits, recurring deposits, equity funds, unit-linked insurance plans (ULIPs) and more. You can start investing in a mutual fund for as low as Rs. 500 through a SIP.

Don’t overlook health and term insurance

With the birth of your child, your family has now grown. So, should your health and term insurance coverage. You need to amend your policy to include your child as a nominee in your term plans. Also, it doesn’t matter if it’s an employer-provided Mediclaim plan, or a personal health cover or even a family floater cover, you can include your new-born immediately in your health insurance plan.

The plus point of doing this, you may also find some health plans that cover vaccination costs for your child in the first year as a part of your health cover.

Get Investment and Insurance in One

Depending on your needs and what you want for your child, it may be a good idea to invest in a child plan. Usually people do it within 90 days of their child’s birth to make the best of the plans benefits. Starting early allows you to opt for a unit-linked plan or ULIP and then gradually de-risk the policy to invest in safer funds before the plan’s maturity. Going for a strategy with flexible short, medium and long-term funds may bring market benefits without having to compromise on your child’s insurance portfolio.

Aegon Life’s iMaximize is an investment and insurance plan that will help secure your child’s future.

Conclusion

Increasing financial awareness is helping parents prioritise financial planning for their children. This ensures that their child grows up to experience the best of everything, including higher studies or give wings to their dreams. So, invest regularly, review your investments periodically, and meet the financial goals for your child’s future.

Advt. no.: II/Aug 2018/ 4343


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