Who Else Wants To Know How Child Plans Work

The birth of a child brings immeasurable joy to parents. However, after the initial euphoria subsides, the future expenses start staring at you in the face. Add to this the innumerable ads on TV and print media, and you’re left with only one choice: buy a child plan.

That’s the beginning of your second problem – there are innumerable child plans out there. How do you know which one suits you the most?

Ask yourself these questions.

1. When will your child need the money?

2. How much will you need for the particular goal (marriage, education)?

3. How much will you be able to save?

4. How much insurance cover do I need?

Understanding Child Insurance Plans

There are basically 3 types of child insurance plans.

Money-Back: This is by far one of the most popular plans. Under this plan, your child will get survival benefits at regular intervals. For example, when he turns 18 years, he would get about 20% of sum assured, and a further 20% at age of 20 and so on. This plan is useful for those who feel the need for lump sum requirement at regular intervals and helps you in life stage planning.

Another benefit these plans offer is the premium waiver benefit, which ensures that in case of death of the parent, then the premiums are waived off and the policy continues with benefits.

A disadvantage of depending on this alone is that its returns often fail to match inflation, especially if you are planning to buy it for your child’s education. Education costs are growing at around 12% whereas money-backs would give you around 7-9%, leaving you grossly underfunded at the time of goal. Also, the premiums are steep.

ULIPS: ULIPs are non-traditional plans wherein returns are market-dependent. If the parent dies (or, as in the case of some policies, gets diagnosed with some critical illness), then the child would receive the sum assured in a lump sum. Also, future premiums are waived off and on maturity, the child would get the fund value too.

ULIP plans offer variety of funds ranging from conservative to balanced or aggressive. Under ULIPs, you can change from debt to equity and vice versa without the worry of taxation, thus enabling you to benefit from both timing the market and also rebalancing your portfolio.

But, ULIPs levy a variety of charges by way of premium allocation charges, policy administration charges, mortality charges, fund management charges, etc. This would affect the returns generated by the investment in market related instruments and ultimately the corpus that your child receives. Another negative of ULIP is that in case of an emergency, if you want to surrender or do partial withdrawal, the charges are high and also attract tax.

While a long term ULIP (above 15 years) could actually cost less than a mutual fund, it is less flexible. You just can’t move from one ULIP to another as in case of mutual funds. If you are putting your entire money in child ULIP plans and if it underperforms on a consistent basis, you are stuck!

Endowment Policies: Endowment policies are one where lump sum amount is paid at the time of the maturity along with bonuses. This is very useful to plan for your child’s big expenses like wedding, higher education, etc. And, unlike ULIPs, there is a minimum guaranteed amount of payment. Besides, you may get bonuses too.

Endowment policies too invest in market-backed securities, but unlike ULIPs, they invest only in debt products and the returns too are not exactly spectacular. And, if you require higher cover, you will have to pay a steeper premium. So, an ideal way is to take up an endowment policy as a debt portion of your overall asset allocation.

Almost all child insurance plans cover the parent and thus, if in an event of an unfortunate untimely death of the parent, the child’s needs would still be taken care of by way of lump sum payment on death and also on maturity. But beware of plans that cover the child and not the parent! It is your child who needs financial security and not you!

Another thing to be noted is that, there are riders like waiver of premium offered along with child plans to cover the untimely death of the parent. The policy continues here at the absence of the parent, but the benefit comes at a high cost as the premium increases due to this rider. And, the mortality rate charges for a child plan are quite high too.

Source: https://blog.bankbazaar.com/who-else-wants-to-know-how-child-plans-work/

Secure your child’s future. Get a Child Plans today.

Parents envision a bright future for their children. They want to be ideal ones in all the aspects. They are ready to do what all it takes and embrace sacrifices if needed. This stiff attitude of the parents is completely understood by the Indian Insurance Companies and they are coming up with different Child plans to render a promising future for the children without compromising on finances. This not only secures child future but also extends a helping hand in terms of financial support whenever required and safeguards it from all the eventualities.

There are various child plans available in the market. You can also go online and gain information pertaining to these plans. They carry various tenures and format. You can hunt for one you need the most for your children as per your requirements. It holds exclusive features as follows:

1    1)  It meets the child’s funding when it is required the most.

Child Plans provides funding for your child’s career or marriage at particular interval whenever required by you. These requirements are considered as milestones such like higher education’s funding, moreover, if you decide to get your child educated from abroad, it needs heavy cash outflow. Child Plans ensure these requirements and provide funding to ensure Child’s safe and promised future. It ceases these heavy expenses from eating out parent’s pockets. Parents always desire their children to opt for the best college or university to have elite education and child plan takes care of this at its best.

2) Unfortunate demise of the insured or parents doesn’t terminate the plan. Unlike other plans, child plans don’t get ceased by the demise of the insured or parents. It continues till the policy maturity date or throughout policy tenure. Insurance company accepts the liability of annual insurance premium payment. Apart from annual premium payment, insurance company also pays death benefit to the insured family to take care of their ongoing living expenses.

3) Parents can easily pursue their choice of investment mix: Child plan allows parents to choose an investment mix of their choice as their choice may differ from each other. They can choose to invest 100 percent of the funds in either debt or equity or a mix of the two. Parents can easily choose the plans of their choice meeting their risk return preferences from various available fund options. . Insurance companies realize that the risk appetite of parents may vary with time and hence they also offer a switching option which allows parents to change their investment mix as and when required.

Child plan is the best way to leverage your finances; plus you secure your child’s future without harming your finances.

Source: http://www.policyboss.com/knowledge-center/693/secure-your-child%E2%80%99s-future-get-a-child-plan-today

Saving for Children’s Education

Saving for child from Mansi Negi

Visit to know more on Saving foe Child

Choosing the Best Insurance Plan for Your Child

Parenting brings immense pleasure and joy to us. Along with this it brings a sense of responsibility, which can sometimes seem scary. The best way to avoid such scares is to plan for things which are predictable and then deal with situations for which we are not prepared.

One situation that we can always prepare ourselves for is the financial need of the children. Broadly speaking, the needs can be classified as medical, educational and marriage. Once we prioritise the needs we must allocate the required funds to meet these needs. 

These can be met either by way of investing in mutual funds or bank deposits in your name and making the child the nominee or directly investing in the child’s name which will yield you such sums that you need at the particular time.

While investing in children plans you must keep in mind two important factors:

1. Inflation – You require the funds at a later date and therefore must keep in mind the inflation at the time you require the money.

2. The exact time when you need the returns.

Having calculated these, you must analyse the plans that best suit your needs. There are a few plans, features of which are discussed below. You must analyse various plans and understand how they work before investing in the plan. The child investment plans help you to build a corpus that may come in handy for your children’s needs.

Different plans have different characteristics. You have to analyse the features in detail and choose the policy with care. Some features that could be considered for 

comparison are listed below:

Self-funding of premiums:

Some of the insurance companies pay the premium from their own funds in case the policy provider dies. This ensures that the maturity amount reaches the child as intended.

Flexibility of the plan:

Some plans allow for partial withdrawals; these plans help in case of urgent needs without disturbing the other planned expenses and income. This flexibility to switch investments from one fund to another allows you to capitalise on the market conditions. It also protects you from the volatilities of the market.

Child insurance plans are available in two flavours: traditional and unit-linked (ULIPs). While they are very different in their working and features, both help in creating the much need financial security. Unit linked plans (ULIPs) are market linked and therefore come with an inherent risk. The traditional plans suit the needs of those who are risk-averse.

Children plans have an added advantage over other plans as they give the payouts to children even if the policyholder is not around. Most of these plans are structured to give timely amounts for education needs, marriage needs and sometimes even for the business ventures as seed capital.

Many of the top insurance and banking companies offer child plans. Here is a comparison between them. Readers are wisely advised to check the policy details and invest in the one that suits their needs.

In the ULIP category the following child plans are available:

Assessing your needs and future requirements, form an essential part of buying a child plan. After careful consideration you may choose to invest in any of the child plans that are available in the market. If you have risk taking abilities then ULIP plans may work best for you. If you have a conservative mind set then the tradition plans suit you best.

[Source: https://www.bajajallianz.com/Corp/child-insurance-plans/child-insurance-plans.jsp]

Child Plans

Child plan secure future of your child as well as offer the financial security for his education. Most child insurance plans are designed for education benefits.

Today quality education requires huge amount, hence to meet this tremendous educational fees these plans are the best option in front of every parent.

All leading insurance providers offer this plans with attractive premium. These insurance plans come with lot of benefits such as death benefits or critical illness benefits.

If proposer that means parent dies during the policy period, then remaining premiums are waived and child will continuously get all benefits of the policy. Some child plans offer medical insurance coverage with the plan for your child.

Hospital and medicine expenses are covered under this medical coverage. You have lot of options available for this plan such as sum assured, premium waiver benefit, policy term and mode of premium payment. Every plan comes with its own benefits.

Child plans offers efficient and effective investment for your kid. Unfortunately if the child dies when policy is in force, then the policy holder will get paid premium back before commencement of risk and policy will terminate.

After beginning of risk period, the policy holder will get sum assured or accumulated amount whichever is high. If every thing will work out finely, then your child will get specified amount as per the policy.

Normally risk period starts after five year of policy for these insurance plans. If you take the policy in early years of child, then premium is very low. You can take this policy when your child attains the one year age or even at the time of birth of the child. These Child Plan policies pay periodic bonus amount also for unforeseen expenses of the child.

You can systematically craft future of your kid with the help of this policy. Premium also depends on coverage area and more coverage will cost more premiums.

We will help you to find out best child plans with maximum coverage at reasonable premium. You will get free quotes from website of insurance companies. These quotes will help you to find out best deal for your kid. We will help you to understand complicated terms of the policy documents.

We have negotiated the best for you and you can apply through us to avail the benefits of Child Plan. We will forward your application to right insurance provider within no time. You can trust us for our services and forget all your worries.

             [Source: http://childplans.over-blog.com/2015/10/child-plans.html]

Child Investment Plans - Child Related Tax Breaks

Child Life Insurance Plans in India

No joy can be greater than becoming a parent and to have your child in your arms. However, this happiness comes with a new set of responsibilities. Every parent strives towards providing their kids everything they would need; starting from birth of the baby to his/her studies and marriages to their eventual settlement.

The biggest dream of every parent is to provide a secure life to their children. Every parent wants the best for their kids. Choose a Child life insurance policy to ensure that their future is bright. Child plans offer the much needed financial support to the children.

Child Life Insurance Plans assist in handling the expenses for marriage and higher studies. This becomes more crucial if, due to some unforeseen circumstances, the family loses its breadwinner. A child plan secures his/her future under all the circumstances. Its helps you fulfill all the demands of your children without any compromise. To get a secure future for your child and a stress free life for yourself, all you are required to do is to invest a small amount from your income. This will take care of all the major expenses which you and your kid would face in the coming years.

Importance of a Child life insurance plan?

• A best child plan is needed to make certain that his/her future is secure. It is needed to aid them in leading a life of their choice by catering to the specific requirements and dreams of every child; to make certain that his/her needs are fulfilled at the right time.
• To help them in getting their choice of education as well as assist them in extracurricular interests.
• To ensure that they can choose a career of their interest, without worrying about the economic support.
• To make the dream of a perfect wedding come true; both for parents and their children.

How to select the most suitable Child plan?

If you are wondering on how to choose a suitable child insurance plan, then have a look at these suggestions below.

• Understand the probable future needs of your child then choose the plan which can fulfill those specific requirements.
• Consider every angle of the risks and your capabilities to bear them.
• Do decide with careful evaluation that whether you want to reap all the benefits at once or at different stages.
• You can choose broadly from two variants: traditional plans and ULIPs.

Best time to choose Child Policy:

There is no specific time. You can decide on best child plan insurance as soon you realize that it is needed. It can be on the day when your baby is born or the day he/she goes to school for the first time.

Things to be careful of:

When finalizing an insurance plan for child, make sure you have a trusted appointee for the plan. In case of your unseen absence, the appointee should be capable of taking care of your child in the best possible way; till your child becomes capable of handling his/her responsibility himself/herself.

[Source: http://childplans.ghost.io/child-life-insurance-plans-in-india/]

Child Education Plans - Education cannot Wait

Unit linked child plans: Should you buy?

Every parent wants the best for his/her child. It is every parent’s wish that financial constraints do not come in way of his/her child’s education or career. Hence, when you are approached with a specific investment plan to provide for your child’s future education or wedding expenses, the product becomes too irresistible to ignore.

The sales pitch is so strong that you start to feel guilty if you choose not to invest in such a product. After all, the product has everything. It has an element of insurance, offers attractive returns and if the most unfortunate were to happen, the insurance company pays all the future premiums on your behalf.

There are many child plans offered by various life insurance companies. All such products have a similar structure although specifics might vary a bit. Child plans come in two variants: Unit linked insurance plans (ULIP) and Traditional (guaranteed payout) plans. Unit linked child plans provide market linked returns.

Should every parent buy a child plans for his/her child? Or are there better products available? Is a simple combination of term insurance plan and mutual funds better than a child plan? We have always maintained that you must buy those financial products that you need to buy, not what the intermediary (agent/broker) wants you to buy.

Therefore, before you purchase any financial product, you must understand all its costs and benefits and compare its performance against the competing products. In this post, we shall focus on unit linked child plans and do an objective assessment of the product features and performance and assess whether such plans should be part of your portfolio. We shall discuss about traditional child plans in a subsequent post.

Similarities between unit linked child plans and regular ULIPs

Like regular ULIPs, unit linked child plans are insurance cum investment products. A part of the premium goes towards life cover (mortality charges) and other policy charges (premium allocation, administration, fund management etc) and the remaining is invested in funds as per policy holder’s discretion. Invested funds provide market linked returns. If the policy holder survives the term of the policy, the fund value is paid to the policy holder. Taxation benefits (entire premium counts under IT section 80C), liquidity restrictions (no withdrawals allowed for 5 years) and cap on charges are same as regular ULIPs.

Unit linked child plans are, in fact, a variant of type II ULIPs. Under type II ULIPs, in the event of death of the policy holder, the insurance company pays the beneficiary both sum assured and fund value. Under type I ULIPs, in the event of death of policy holder, the insurance company pays only the higher of sum assured and fund value.

How unit linked child plans differ from regular ULIPs?

Under regular ULIPs, both death benefit(sum assured) and the accumulated fund value are paid to the beneficiary upon death of the policy holder and the policy ceases upon payment of such benefits. Under a child plan, only the sum assured is paid to the beneficiary upon demise of the policy holder and only the risk cover ceases. The fund value is paid to the beneficiary only at maturity of policy. The family of the policy holder need not pay any further premiums to the insurance company. The insurance company will pay the entire or part of all future premiums. These premiums, like other premium installments, will get invested and the beneficiary will receive the accumulated fund value at maturity.

Comparison with a combination of term plans and mutual funds

We have already established that a combination of term plan and mutual funds gives better performance than a regular ULIP plan in a previous post. Let’s see how a unit linked child plans fares against this combination. We will first do a qualitative assessment of how various product features will impact product performance.

Unit Linked Child Plan as an insurance product

Under a unit linked child plan, maximum sum assured is capped at a certain multiple of annual premium. Sum assured allowed under the child plan typically varies from 10 times annual premium to 40 times annual premium for people with age less than 45 years at the beginning of the policy. This is a limitation as your ability to pay premium restricts your life cover. However, your child’s future needs do not depend upon your payment ability.

Unit Linked Child Plan as an investment product

Under unit linked plans, policy holders have multiple fund options (equity, balanced, debt, money market) etc for parking their investment amounts. For comparison as an investment product (with mutual funds), you need to compare the charges because charges eat into the amount that gets invested. There is no reason to believe that the investment returns will be higher in a particular product. Hence, the more funds that get allocated towards investment, the more you get in terms of maturity benefits.

[Source: https://www.bajajallianz.com/Corp/ulip-plans/ulip.jsp]

Infograph – Safeguard your Child’s Dreams

Bajaj Allianz Life Insurance Child plans and policies offer security against constraints like inflation and rising educational expenses.

Should you buy child-specific plans?

Will you liquidate an investment if you need the money? You might, if you are faced with a cash crunch, but if the investment has the words 'child', 'education' or 'marriage' in the name, chances are you will think twice and then avoid withdrawing the money.

"When you invest in an ordinary fund, there is a greater probability of the money being spent for other needs. However, when you invest in a child-specific product, it is more likely to be used for that purpose," says financial planner Vishal Dhawan.

That, perhaps, is the only advantage that child-specific mutual funds offer to investors. Otherwise, these funds are like any other fund in the category and carry the same risks.

When it comes to child  insurance plans, young parents are forever in the cross hairs of salesmen masquerading as investment advisers. The first thing they are offered is a traditional insurance policy aimed at "securing the long-term needs of the child". If you don't fall for the marketing gimmick, they will offer a Ulip which will "ensure that all goals are met even if the parent is not around".

The emotional appeal is so strong that the parent quickly signs on the dotted line. However, financial experts feel that insurance plans are not the best way to invest.

Another question that parents tend to ask is whether it is advisable to buy an investment in the child's name. Financial advisers warn against doing so. "Your child will receive a very big sum of money at a time when she may not necessarily be mature enough to decide how to spend it," says Dhawan.

On the other hand, if the product is in your name (with your spouse as the nominee), you retain control over how the money is to be spent.

[Source: http://articles.economictimes.indiatimes.com/2015-01-19/news/58231568_1_investment-advisers-financial-advisers-traditional-insurance-policy]

Are child insurance plans really worth it?

You have welcomed your new bundle of joy in this world with a lot of enthusiasm. You intend to give it the best of everything. In order to help you achieve this objective, you start investing in various instruments on your child’s behalf.

To capitalize on the parents’ intentions about giving the best for their children, many insurance companies have introduced children’s plans. These plans have enticed many parents to invest on behalf of their children, under the impression that their child’s future is secure. But is it true? Are they worth investing in? Is this the best investment option for your best child investment plan? Let’s take a look at what these plans are all about.

What are children’s plans?
Children’s plans are insurance-cum-investment plans offered by insurance companies, and are similar to ULIPs. However, the difference between a ULIP and a children’s plan is that the parent starts investing in the children’s plan right from the time the child is born and can withdraw the savings once the child reaches adulthood. Of course, some plans do allow intermediate withdrawals, at certain intervals.

How much insurance do I get?
These plans do come with an in built insurance component in order ensure the sum payable to the child is insured against the premature death of the earning parent. The minimum life cover you have to select in these plans is arrived at by this formula: Sum Assured = Term * Annual premium /2. But in most instances this sum assured is inadequately woeful. Experts recommend that it is necessary to buy a life cover of minimum of 7-10 times the annual income of the earning parents. This is to ensure that in case if the earning parent meets untimely death, his/her spouse and the child are adequately provided for. So if you are relying only on the life cover provided by these plans, then remember you will always remain under-insured.

What about the investment?
When you pay the premium for this 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. However, this portion is quite small, as the insurance companies tend to deduct premium allocation charges upfront. These charges are meant to pay the distributor commissions. As a result, a very small part of the premium gets invested during the initial years. Also, if you opt for any features provided by the insurer such as waiver of premium, switching option etc., the charges for the same are deducted from the amount invested. So the returns from these plans tend to be very low in the initial years and if you stop the plan without completing the entire tenure, you might end up suffering a loss.

Disadvantage of the children’s plans
These plans do rate poorly both in terms of life cover and investment option. You can buy plain term insurance at lower premium that provides you with very high life cover. For investments, equity mutual funds are the best. You can invest the highest possible amount in these funds at very low fees. Also, if the fund tends to perform poorly, you can stop your investment and switch over to another fund, without paying any penalty. This is not possible in case of child plans as there are heavy surrender charges applicable.

Are they right for me?
One needs to evaluate if they are an ideal option. More often no they are not. While they do provide you with tax benefits, you can get the same tax benefits with a combination of term insurance and mutual funds. Also, term insurance + mutual fund combination beats the children’s plans on the fronts of costs and returns. So it is better to give these plans a miss and instead go for term plan and mutual fund.

[Source: http://profit.ndtv.com/news/your-money/article-are-child-insurance-plans-really-worth-it-315502]

Child insurance for your child’s future growth

Investing and saving enough for a child’s better future is considered the most important financial goal of parents in India. With happiness and harmony comes a sense of responsibility along with your bundle of joy amongst the new parents.

While market is flooded with various investment instruments, a child insurance plan can help parents to save adequate money for a child’s future goals. These insurance products are designed in such a way that they fulfill the financial needs of your children when the time comes.

These child plans help parents save money regularly over a period of time. And after a pre-determined period, insurance companies in India paya lump-sum money as maturity benefit.

The real importance of this plan is realized when parents meet with an untimely death. Child insurance plans can be bought on the life of any of the parent and you can make the child as the beneficiary. Incase parents meet with an unfortunate event; child insurance plan will take care of a child’s needs.

The best part about child insurance is that it will continue till maturity after the parent’s demise and all the remaining future premiums will be waived off by the insurance company in India. This is one of the unique child insurance benefits and generally known as ‘waiver of premium’.  At maturity, a guaranteed lump-sum amount is paid.

Based on a policy type you select, the payment is done at two stages, once on the parent’s demise and secondly during the maturity of the policy, almost exact time for your child to kick-start their career. 

Besides, there are also some child plans which will offer payouts at regular intervals. The idea behind designed such plans is there are various child requirement at different stage of their life. So parents can buy child insurance plan not only to fulfill the dreams but also meet the requirements from time to time.

The most important part while buying this best child plan is choosing the term period based on your child needs, your income sources and calculating the amount. Online sites can be good for researching as they help you easily to compare the cost of insurance and also provide you variety of options to choose as per your requirements. However, people who are not well versed with the market developments, policies and its features they can always consult a financial advisor to decide the amount required for life cover.

If you cannot afford to devote your valuable time on research then you can entrust the job to a well-known insurance agents. It is one of the reliable ways to ensure that you get best insurance quotes in less time without having to go through the hassle and tedious task of calculations. Good agents not only help you to choose the most profitable policy but also assist in filing the claim and getting reimbursement in case of any trouble.

Nowadays with the ever increasing inflation costs, young parents are more worried about child’s education costs; therefore design your child plan in such a way that your child’s education needs are taken care off. A sound education is a start for worry-free life of your child.

[Source: https://childplan.wordpress.com/2015/09/11/child-insurance-for-your-childs-future-growth/]

Plan early for your children’s education expenses

With the cost of schooling soaring every year, parents should put in place concrete savings and investment plans well ahead

 “Education costs money, but then so does ignorance.”

These words have a greater meaning today. The high cost of child education may come as a big negative surprise for those who do not plan early. Be it annual school admission fees, monthly tuition fees or expenditure on transport and extra-curricular activities, the costs are soaring every year.

Mounting cost of education in recent years has eaten up a large chunk of household budgets. So it is in the interest of every parent to look ahead and plan carefully for the cost of education of their children.

Even if you have planned for your children’s higher studies by buying insurance plans and mutual fund schemes, planning for their primary and secondary education is equally important. The costs would rise further if you decide to send your children to private schools. The job only gets tougher for single earning parents.

Planning is only half the job done. To understand the gravity of the situation, let some numbers do the talking. The inflation in the cost of education is rising at 12 per cent compared with a 7-8 per cent spurt in the overall inflation (though overall inflation has dropped to around 5 per cent in the past few months).

A survey by a leading industry body showed 65 per cent of parents spend more than half of their take-home pay on their child education plans as well as on co-curricular activities, putting significant pressure on family budgets. The figure shows the growing share of education costs on a family budget.

According to the survey, parents’ annual spend on items and activities integral to school curriculum like fees, transport, books, uniform, stationery, building fund, educational trips, extra tuitions and extra-curricular activities of a single child has gone up from Rs 35,000 in 2005 to over Rs 94,000 in 2011.

The government provides income-tax relief on monthly tuition fees paid under Section 80C of the income-tax act, which has since been raised from Rs 1,00,000 to Rs 1,50,000, but Section 80C also covers several other investment instruments within the same limit. Considering the rising cost of education and higher tax breaks provided overseas, there is scope for additional tax break.

Abhinav Gulecha, founder of Sham Financial Planners, a Sebi-registered investment adviser, said: “There is scope for an additional tax break, but in the last budget the government provided additional tax breaks on medical expenditure and personal accident insurance, which are priority areas.”

“Income-tax benefit can also be claimed on the tuition fees paid in a play school by submitting receipts. Companies also allow employees to structure their salaries where Rs 100 per child per month can be claimed as income-tax benefit under Section 10 of the I-T act. Thus, one can claim additional I-T exemption of Rs 2,400 on two children,” Gulecha said.

Even without tax break, saving for education is the need of the hour. “It is critical to invest in high-growth financial instruments so that your portfolio’s rate of return is more than the rate inflation,” Gulecha added.

Can taking exposure to equities be a solution? Experts are divided on taking 100 per cent exposure to equities to build a corpus for your child education Plans

They feel it is important to plan early, possibly even before starting a family. After marriage, a couple should set aside a corpus for children’s education, which can be put into bank fixed deposits, if they are below the 10 per cent income-tax slab.

If they are in the 30 per cent tax bracket, they should invest in liquid mutual funds, where there is no exit load and the amount can be withdrawn whenever required.

For parents who haven’t planned an education corpus, there is still some time and a few options. There is a three-year period before a child goes to a play school. This time, financial planners say, can be utilised well to plan a corpus that can provide regular cash flow. However, bear in mind that this is the time for other expenses as well.

While people tend to put money together for major life goals like buying a car or a home, children’s education tends to take a back seat. One should keep a separate reserve for children’s education purposes.

“Many parents paying school fees wish they had started a savings plan when their children were born. The earlier a savings plan is started, the less is contribution needed for such a saving plan,” says a financial planner.

A longer timeframe for investment also allows investors to take on more risk and maximise returns. One should keep a monthly deposit plan, but needs to review it as costs are rising at a fast pace. Experts say one may need beef up this fund regularly after every 2-3 years after taking the rate of inflation into account.

Certain other factors should also be included to make a good child education plans. For instance, one should choose a school keeping the cash flow pattern in mind. Some schools offer the best of services and boast of their ‘brands’ but they prove heavy on the pocket too. Substantial donation and fees can burn a big hole in your pocket. Once a child is admitted to such a school, it is difficult to shift out to another school. The nature of school expenses has also undergone a sea change, compared with what it was 10 years ago. Today, expenses are bundled and they usually include coaching, art classes and extra-curricular activities.Majority of parents would spend on an average Rs 18 lakh-Rs 20 lakh in raising a child by the time they graduate from high school. While right planning can help one build a corpus to dip into, maintenance of regular cash outflow is critical. Otherwise, one would have to run helter-skelter to arrange funds in every academic season.Parents know well that they can postpone buying a home or a car but once the child has started going to school, there is no way to escape from the regular expenditure till they graduate.

[Source: https://childplan.wordpress.com/2015/09/08/plan-early-for-your-childrens-education-expenses-2/]

Child Plans Lay the Foundation Stones of a Bright and Promising Future

The concept of life indemnity involves a broad-based perspective. It doesnot begin and end with the sheer calculation of death benefits. It is a fact that securing the insurer’s family with monetary benefits is the guiding characteristic of life insurance. How will the beneficiaries manage their odds and ends after your demise? The fiscal coverage is there to provide them with the assistance they need. As emphasized time and again, sealing the belt of financial security is the core essence of life insurance. You are opting for a package not only for yourself but also for your family members. Above all, you are doing it for protecting the future of your children.

Responsibility is yours
Child plans are one of your leading commitments. Both you and your spouse are responsible for securing your children’s future. Number of children that you have is an important aspect of consideration. Without a focus on methodical planning, it is just not possible to give shape to the children’s dreams and aspirations. You have to take the cudgel so that they know what it takes to dream big. There are end numbers of factors to consider. You know that it will take quite some time before your child settles down into an independent life. Until, he manages to earn his bread, you should give him the push that he needs.

Constructing the future dreams

Best Child Plan are largely instrumental in giving shape to your dreams and expectations—those that relate to your child/children. Education is an important aspect of consideration. Here again, the present scheme of requirements is as important as the future possibilities. There are certain odds and issues to consider. In order that he successfully settles down into a promising career, you will need to chip in with your proactive role. Setting aside a part of your saving for purchasing an insurance plan is one of the choices to consider. With the help of the planned outlay, you can help your child walk that extra mile so that he gives shape to a perfect career graph.

Feeling convenient and relieved

As you all know that nothing on earth is accomplish able without money. Education in general and higher education in particular don't come free of cost. Rather, these involve quite a bit of expense. So, if you lay the blueprints of the child plans, you can get the breathing space that you need. The space and the standing time are also necessary for your child. After all, at the eleventh hour, you cannot keep running from the pillar to the post for making the fiscal arrangements. 

For education and marriage

Education and career are not the only areas of consideration. Marrying your children off so that they can lead a healthy and independent existence is another major concern. Here again, the child plans are there to chip in with their role of difference. If you take into account the Indian context, you will see that parents have a decisive role to play in their offspring’s marriage. The proposition also requires a fair share of expenses. But you can make things click by choosing a suitable insurance plans that specifically cater to the needs of your children. 

[Source: https://childplan.wordpress.com/2015/09/05/child-plans-lay-the-foundation-stones-of-a-bright-and-promising-future-2/]

Why Parents Must Buy a Child Insurance Plan?

Parenting brings a sense of responsibility and immense joy to everyone’s life. But, it can seem scary sometimes. Hence, buying the best child insurance India online is a great way to avoid such fears which is so predictable.

This plan gives policyholders financial strength to deal with situations for which parents are not ready. The needs of a child can be differentiated into three categories such as educational, medical and last but not the least, marriage. When parents prioritize the requirements, then they can easily allocate the necessary funds to fulfill these needs.

The fund can be created either by saving in bank deposits or by investing in mutual funds in parent’s name and declare the child as nominee. There are two important factors that you must keep in mind while investing in child plans.

·         The exact time when parents need the returns

·         Inflation – parents need the money at a later date and hence, this factor is important especially at the time policyholder requires amount.

Once you consider both these factors, you can analyze the policy which best suits your requirements and budget as well. Analyzing different plans and knowing how they work before investing in the child insurance India.

These policies are designed to help parents to create a strong financial corpus that comes in handy for policyholders’ requirements. Features vary from plan to plan. So, analyze the product in detail and select the one. Sometimes, insurance companies in India pay the remaining premium in case of parent’s death.

It makes sure that the maturity amount will definitely receive by the child as mentioned in a plan. Some child insurance policies allow for partial withdrawals and help in crises situations without disturbing the other income and planned expenses. Do not forget to check child plan insurance age limit because it helps to save on premiums.     

Child insurance is available in two types such as unit linked and traditional plans. Both types are different in their features but help in generating much needed financial protection. Unit linked child insurance comes with inherent risks whereas traditional plans are for risk-averse.

Generally, these insurance products are tailored to offer timely installments for education, marriage and other specific needs. Customers are advised to check the details wisely and invest in the best that suits their requirements.

[Source: https://childplan.wordpress.com/2015/07/21/why-parents-must-buy-a-child-insurance-plan/]

Is There a Best Insurance Policy For Your Child?

The Wealth Architects

I am often asked — 'Which is the best insurance policy for my child?'

And the answer — None.

The primary objective of an insurance policy is to mitigate the "financial" hardship that the family may suffer in case of any unfortunate eventuality happening to the insured. In most instances, a child is not the breadwinner in the family. Hence, "insuring the child" is meaningless and a wasteful expense. Therefore, never buy an insurance plan where the child is the insured person.

Then, there are the "child" oriented policies.

Also read: Here are some special health insurance plans for diabetics

Typically, in such policies:

a) The parent insures himself and/or herself

b) The child is the beneficiary

c) The maturity of the policy is designed such that the payout happens for say the child's higher education or marriage

d) If, in the interim, something unfortunate happens to the parent, (i) the Sum Assured is paid to the child and (ii) the policy continues without any break (the insurance company pays all the future premiums).

The child-oriented policy, therefore, is quite useful in protecting the child’s future. However, it comes at a very high-cost; which translates into poor returns.

And it is n’t flexible at all. Once bought, you are stuck with it for 10 to 20 years. You don’t have much leeway to modify your investments, if circumstances change during this long period of time (which is fairly common in today ’s dynamic world).

Therefore, a Do-It-Yourself strategy makes for a better approach.

Under this

1. The parent(s) should insure themselves with a “term plan†and high Sum Assured. The premium for such plans will be SIGNIFICANTLY lower (almost 10-20 times less) than the aforesaid child plan

2. The child, of course, is the beneficiary of the policy

3. The balance amount [equal to the premium that you would have otherwise paid for the child plan minus the premium for the term plan] can be invested in pure investment products such as PPF, EPF, gold,

FDs, equity, property, etc; which will yield comparatively much better returns. The appropriate mix would depend on your risk-appetite and time-frame so that they mature when child's higher education or marriage becomes due.

The only point of difference would be that the term policy does not continue if something happens to the parent. This disadvantage is, however, mitigated by the fact that you can buy a sufficiently large cover with a term plan as the premiums are relatively very low. As such, should any untoward incident happen, this huge amount of money received will aid in protecting the child’s future.

Thus, the DIY approach will not only retain all the benefits of a typical child oriented plan but simultaneously give a much higher payout on maturity; besides being hugely flexible.

I am sure you can devote this extra little effort to manage your own portfolio to make sure that your child gets more money...without compromising on the security aspect.

[source:http://www.moneycontrol.com/master_your_money/stocks_news_consumption.php?autono=958258]