Start planning early for your child’s future

Start planning early for your child’s future

I have a 2-year-old daughter. I want to start saving for her education and marriage. When is the right time to start investing and how do I decide how much I need to save?

The best way to start planning for your child’s future needs is to start early. With every year that you lose out on, you will have to pay an extra premium for the same corpus. There are four simple steps to help you save for your child’s future:

Step 1: Decide the corpus you wish to provide for her future and the time when the same should be made available. This will define the premium and policy term.

Step 2: Choose the level of protection you require. This should be reflected in sum assured and the riders (such as income benefit, comprehensive health benefit and accidental death benefit) that you choose. This would ensure that no matter what happens to you, your child’s future is secure and her education is not affected. Our new child plan Young Scholar offers all these riders.

Step 3: Choose the premium, premium payment term and frequency.

Step 4: Choose the funds you want to invest in based on your risk appetite.

I am a 30-year-old executive working for an MNC. I am looking at investing in a unit-linked retirement plan. Which fund option should I go for, wherein fund management charges are lower?

There are some retirement products available in the market that will allow you to create long-term wealth. I would suggest that you look at a product that gives you an option to invest in an index fund. Index funds invest typically in Nifty’s 50 firms and have lower fund management charges as compared with other equity-linked funds. The fund can invest in equities in the range of 80-100% and debt and money market securities in the range of 0-20%. In the long run the fund value will grow higher with growth in each firm’s share price.

Readers are welcome to write in with their queries to The questions will be answered by senior executives from leading insurance firms.

This week’s expert is T.R. Ramachandran, CEO and MD, Aviva India.