Every parent wants the best for their children and their future. Spurting fees in reputable education institutes in India and overseas along with rising inflation means that parents today are more worried about their child’s education than ever before. Irrespective of their financial earnings, parents are today making use of child education plans to ensure they have adequate financial corpus for the future education needs of their child.
A child education plan is a dual purpose financial instrument offering both protection and investment return. For the protection component on offer, such plans are also commonly known as child insurance plans. Child insurance plans are offered by almost every life insurance company, allowing parents the option to secure the financial future of their children.
Child insurance plans are available both as market-linked ULIP plans and traditional endowment plans. A child insurance plan works like a life insurance plan although some plans terminate when the child attains either 18 years or 21 years of age depending on the plan and the insurer.
Planning for children’s marriage starts when the children are young. You must save and invest as early as possible to give the money the time to grow into a large corpus. You must choose an investment that offers return above inflation over the long term.
Invest in equity or fixed income securities as per your risk profile to accumulate the corpus at the time of the financial goal. You get the benefit of the power of compounding or return on returns, where a small investment grows into a large sum of money over some time.
You must plan the investment depending on the time horizon and risk tolerance. If you are a conservative investor, you can invest in fixed income securities that offer return above inflation over some time. The aggressive investor can choose equity investments that provide higher returns for a higher risk. You may invest in equity investments with a time horizon of at least five to seven years, to achieve the financial goal of children’s marriage.
Retirement planning means preparing today for your future life so that you continue to meet all your goals and dreams independently. This includes setting your retirement goals, estimating the amount of money you will need, and investing to grow your retirement savings.
Every plan for retirement is unique. After all, you may have very specific ideas on how you want to spend your retired life. This is why it’s important to have a plan that is designed specifically to suit your individual needs.
You retire from work, not life. You may have a new set of dreams for your post-retirement life. At the same time, you may also want to maintain your day-to-day lifestyle without worrying about expenses. By planning in advance, you can define the path to achieve these life goals without any financial dependence.