How to calculate the insurance required for your child's future
11th March 2019
As proud parents, you wish to do the best for your child and this includes providing everything that your child requires to grow further in life. The financial responsibilities that you have to handle for this are immense and you are willing to take all the decisions that will ensure a credible financial security for your child. One of the most important ways to ensure a safe future for your child where she/he can fulfill each dream is having a proper and comprehensive insurance plan in place for your child. These days there are many child-specific plans in place where you can choose to invest for a better financial future for your child. The options are diverse and therefore, you have to ensure that you take an informed decision, which can benefit your child in the long run.
While choosing an insurance plan for your child, the primary thing is to ensure that there is sufficient coverage and no shortcoming of offered protection exists. There are certain steps that you need to take to ensure that the coverage offered by an insurance plan is sufficient. These steps are mentioned below:
- Plan for futuristic projections: A child plan, like the traditional insurance plan is always futuristic in nature and this means that the sum assured under the plan must match the mandatory future goals that your child will require, including the educational costs, costs for extra-curricular activities, any additional activity, higher education and also offers you the scope for saving for later life goals like marriage etc.
- Take inflation into account: Before calculating or arriving at the required amount of coverage that you desire for child, make note of the fact that any amount of financial planning is incomplete if inflation is not taken into account. Inflation or the general increase in prices over a period of time is a reality of our times and this means that by the time your child will be ready to fulfill the planned goals, the general costs will be higher than what they are today. Therefore, you have to ensure that inflation is taken into account and the corpus created by the term maturity is sufficient for complete coverage.
- Starting early is the key: The right kind of insurance that you will calculate for your child depends on the factor of time. This means that if you start early at the time of your child’s birth, the amount of fund-corpus that will be created by the time your child reaches the age where she/he requires educational needs will be more than enough. This is because the factor of time will be in your favor and therefore, your funds will grow by leaps.
HDFC Life offers HDFC Life YoungStar Udaan – a child specific plan that offers comprehensive financial benefits for your child so that you can give wings to your child’s dreams and aspirations. For details, click on the mentioned link: https://www.hdfclife.com/children-insurance-plans/youngstar-udaan
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