The best way to shelter your child’s future dreams…

Jenny by Jenny Dsouza

Published Tue, Jan 17th 2017, 09:36 | Finance


Parents are always concerned about their children's future and well-being. But not all of them take the necessary steps to make sure that their little one has a stable and bright future. Most of them try to push things ahead when their kids are small. But this is the most important time which they should not lose by pushing their plans. If you start planning for your children at your younger age you can reap the benefits of compounding money. Thus, it will help you secure their future in more concrete manner. Today, there are hundreds of investment policies that will help you yield the Best child plan policy returns from the markets for your child’s well-being. You should analyze the product in detail and then decide whether it suits your investment objective or not. Most importantly your best child plan should match in a time horizon of your child’s need at every stage of their career building. Parents who wish to save for their child’s education, career and marriage purpose can choose child insurance plan.

Best Child Plan Policy are one of the best child plans that serve clients with a dual purpose of offering an insurance cover along with the opportunity to earn returns from market-based funds. Let’s understand how child plan works? Child plans are insurance-cum-investment plans offered by insurance companies similar to ULIPs. When you pay the premium for the plan, part of the premium amount goes towards paying for the life cover. The remaining part of the premium is invested in various instruments either debt or equities. Best Child Plan Policy allow partial withdrawals; this proves useful to take care of urgent needs without disturbing the regular expenses and income matrix. Child insurance plan will continue till maturity after the death of the parent and all the future premiums will be paid out by the insurance company! This unique feature is called Waiver of Premium.

These child plans offered by leading insurance companies have gained immense popularity as they make life easy for parents, relieving them from financial worries regarding their children. It caters to the child protection and financial security, be it for their education, marriage or other needs.

Some key points to remember while choosing your best child plan:

Financial Goals

While working on your child plan talk to your financial expert and set a goal before making the investment decision. Since a portion of your premium goes into market-based funds it is important you set allocation as such that the returns they yield will let you fulfill your child’s financial goals in time. Although these goals will vary from person to person, it can be commonly categorized as a short-term, medium-term or long-term goal.

Right investment

Before investment, you should consider your income source, risk appetite, the time frame in hand, the level of risk, liquidity, capital appreciation etc. The returns expected should be sufficient to meet your child’s needs at that time, so be careful while making investment decisions.

Cover risk

An insurance policy is probably the safest instrument in which a part of your premium is reserved. While at one end you’re busy focusing on extracting returns from the market, on the other end an insurance cover assure confirm returns in case of your accidental loss of life.

Early Start

An early start helps you reap the benefits of compounding effect. Secondly, you have a fair amount to time experiment with the funds through switching and earn money with the time horizon.  A proper planning is the first step for best child plan. Figure out how much money would be required for the child’s school education, higher studies, wedding, etc. The other important factor to be remembered is the expected rate of inflation and its effect on the value of our returns.

Income tax benefits

The premium paid in child insurance plan is eligible for tax deduction under Section 80 C while the income from the plan is also tax-free under Section 10 (10D). A great way to save money on your child investment policy.

The performance of the best child plan policy is really a mixed bag. Since your children's education, career activities and marriage are among the most important goals, you should be very selective in choosing the right child plan. At the end of the day, wealth creation to meet your child’s need is the fundamental objective. As an investor, you have a vast array of choices amongst diversified equity, debt or balanced funds that will help extract better returns over the period of time.

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