Lesser known feature of Child Insurance plan that every parent needs to know

“We both are working, and our priority is to save for our children”.

This is something most parents are concerned in today’s world. With this objective in mind, they start saving for their child among several products such as mutual funds, real estate or bank deposits. But is the approach fool-proof enough to meet children needs when the child actually requires the funds? Let’s see and find out if there’ an alternative.

No other investment avenue guarantees that the required sum of money is available for the child at a particular age. Various instruments like public provident fund (PPF), mutual funds, shares, gold and real estate are self-funded in nature.

One needs to be alive to make money grow through these instruments. 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 timeperiod. An untimely death can jeopardise this objective.