With the increase in expenses and life getting tougher your child’s future is at stake. Every day is a risk and is doubting its next day with expenses.
Children's plans are products with an emotional appeal. With increasing cost of education and inflation, there is an urgent need for planning for your child's future.
There are a variety of products available from insurance companies and mutual funds to address this.
INSURANCE PLANS
Insurance plans for children are available in both traditional and unit-linked insurance product categories.
Traditional plans primarily invest in debt and the returns are on the lower side. Some traditional plans offer guaranteed returns based on the basic sum assured of the policy.
These plans usually have payouts which are a set percentage of the sum assured and start at a pre-defined age of the child, usually 18.
It is essential to check whose life is insured in these policies. If the child's life is insured then in case of parent's demise, no financial aid is provided, unless a premium waiver rider is purchased.
Mutual fund Plans
MFs are pure investment products. Children's plans from MFs invest across asset classes like debt, equity and gold. And are mostly balanced funds.
Instead have a strategy that creates an adequate corpus for the goal with optimal investments.
POINTERS TO DECIDE
i) Time horizon: If you have a longer time horizon for your goal, you will need to invest smaller amounts. And can invest in riskier asset classes like equity. If the funds are required in the near future, investments have to be primarily debt-oriented.
ii) How much: A corpus of Rs. 25 lakh might sound good but may not suffice 15 years later. You need to get a realistic estimate of the corpus needed.
iii) Investible surplus: There will be other responsibilities besides planning for the child's future. You must prioritise the demands on your investible surplus.
Don't being something and leave it midway due to lack of funds. Rather, start small and steadily increase the amount.
Liquidity: Before investing, decide if you are comfortable with the funds locked-in till a pre-decided tenure or need the flexibility to withdraw any time after a certain period.
Risk coverage: All plans for your child's future will depend on continued investments for a long duration. If your income stops, due to death or disability, the goal will not be met.
Take adequate life insurance and disability cover before embarking on your investment plans.
Secure your child’s future for a better tomorrow and allow them to live a wealthy life with education or their expenses otherwise.
Source: http://www.rediff.com/business
Follow us: www.facebook.com/karvyprivatewealth
Children's plans are products with an emotional appeal. With increasing cost of education and inflation, there is an urgent need for planning for your child's future.
There are a variety of products available from insurance companies and mutual funds to address this.
INSURANCE PLANS
Insurance plans for children are available in both traditional and unit-linked insurance product categories.
Traditional plans primarily invest in debt and the returns are on the lower side. Some traditional plans offer guaranteed returns based on the basic sum assured of the policy.
These plans usually have payouts which are a set percentage of the sum assured and start at a pre-defined age of the child, usually 18.
It is essential to check whose life is insured in these policies. If the child's life is insured then in case of parent's demise, no financial aid is provided, unless a premium waiver rider is purchased.
Mutual fund Plans
MFs are pure investment products. Children's plans from MFs invest across asset classes like debt, equity and gold. And are mostly balanced funds.
Instead have a strategy that creates an adequate corpus for the goal with optimal investments.
POINTERS TO DECIDE
i) Time horizon: If you have a longer time horizon for your goal, you will need to invest smaller amounts. And can invest in riskier asset classes like equity. If the funds are required in the near future, investments have to be primarily debt-oriented.
ii) How much: A corpus of Rs. 25 lakh might sound good but may not suffice 15 years later. You need to get a realistic estimate of the corpus needed.
iii) Investible surplus: There will be other responsibilities besides planning for the child's future. You must prioritise the demands on your investible surplus.
Don't being something and leave it midway due to lack of funds. Rather, start small and steadily increase the amount.
Liquidity: Before investing, decide if you are comfortable with the funds locked-in till a pre-decided tenure or need the flexibility to withdraw any time after a certain period.
Risk coverage: All plans for your child's future will depend on continued investments for a long duration. If your income stops, due to death or disability, the goal will not be met.
Take adequate life insurance and disability cover before embarking on your investment plans.
Secure your child’s future for a better tomorrow and allow them to live a wealthy life with education or their expenses otherwise.
Source: http://www.rediff.com/business
Follow us: www.facebook.com/karvyprivatewealth
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