How Life Insurance Plans Can Help Secure Your Children's Financial Goals

Most parents’ top priority is to save for their children.

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With this goal in mind, they begin saving for their child through different investments such as mutual funds, real estate, and bank accounts. But is the strategy foolproof enough to meet children’s needs when they truly need the money? Let’s see if there is an option.

No investment option assures that the requisite amount of money will be accessible for the child at a specific age. Self-funded instruments include public provident funds (PPFs), mutual funds, stocks, gold, and real estate. To make money grow with these instruments, one must be alive.

For example, one needs to accumulate a certain sum, say, Rs 20 lakh for a child aged 1 year when he/she reaches 21 years of age. Through mutual funds, at a conservative rate of 12 per cent, the parent will have to invest Rs 25,000 per annum. However, to accumulate such an amount, one needs to remain alive through the period. An untimely death can jeopardize this objective. Child insurance plans offered by life insurance companies represent a superior alternative.