How to create ocean of opportunities for your children?

Planning is a wise step to do in every walk of life. It is important especially when there is a new member welcomed in our family and that is our loving kid. As a parent we try every means to secure the future of the child by investing in various mediums like gold, silver, mutual funds or securities, insurance policies etc. However, child plans are the modern day most simple investment vehicle that will help you overcome the pressure of financial arrangements of your child’s life. This is a plan that is designed to cater to your child needs at every walk of his or her life, whether you’re there around or not. It is a perfect child care plan of modern times.

Today, various insurance companies have come up with customized child plan solutions for their clients. Some of these plans are market-linked policies where a partial amount of your insurance premium goes for cover and the rest is invested in funds like equities, debt or balanced funds. Second type are traditional plans that invest your premiums only in secured funds.

How Child Plans work?

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.  Remaining part of the premium is invested in various instruments either debt or equities. Parents invest money and can withdraw the savings once the child reaches adulthood or in exceptional cases if the parent were to meet with an unfortunate event, child plan will be able to provide a life cover for the financial needs of children and lump-sum money is paid out to the child as well. 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. Besides, they also allow partial withdrawals; this proves useful to take care of urgent needs without disturbing the regular expenses and income matrix.

Here are few tips to choose best child plan for your children welfare:

Inflation & Changing Needs

During childhood, your child might be interested in becoming astronaut but as he gradually gets older he might choose to play football and make career into. You need to access the changing needs of your child, inflation costs and other requirements before deciding a suitable sum assured. Also, deciding the right amount of sum assured is the most important point while buying a child plan.

Check Documentation

Terms & conditions, policy patterns, your claim procedures, fine prints, clauses these are very important part of your child policy. All plans come with some advantage and to understand the features of the plan in detail it is essential to go through the policy documents. To ensure an efficient and timely claim settlement process, it is important to check for all the important dates and timelines.

Market Linked Funds:

Since some child plans come with investment in market linked funds, it is important you have atleast a basic idea on equity or debt markets. Ofcourse, there are always financial expert to help you swim across the sea but finally it’s you who has to master the art of swimming safely during the market storms. So never get panic or too emotional with market tides. Take a calm decision during such times. Keep reviewing your plan and keep talking to financial expert about the situations.

Partial Withdrawals

Partial withdrawals help parents meet the financial needs of their child at the key moments in his or her life such as admissions in school or college, other expenses, extra-curricular activities, medical emergencies etc. Therefore, it would be wise to monitor the funds time to time to produce maximum earnings for your child benefits.

Ultimately, as a parent you will always want to create a shield of securities around child for safe future. A good child plan will yield high returns with every growing stage of the child. It’s like building a foster family who will fulfill your child’s dream just in case you meet with untimely loss of your life.

Source: http://www.articles.howto-tips.com/HowTo-Article-Directory/how-create-ocean-opportunities-your-children