Ask Mint | Children’s plans help achieve targeted savings

Ask Mint | Children’s plans help achieve targeted savings

I am a 35-year-old man with monthly income of around Rs40,000. I have already invested in a term plan and now I intend to make provision for my three-year-old child. What is the best option?

You can opt for specific children’s insurance plans. The benefits under these policies are designed to guarantee the targeted savings for the child. So where conventional forms of savings work only as long as the parent is alive and well, typical child plans continue the savings plan even in the event of the parent’s death or disability. These plans allow withdrawals that coincide with the requirements of the child at different stages of life; that is, at the time of going for higher education, settling in a profession, or marriage, among others. There are options under children’s insurance plans to insure the life of the parent or that of the child. It is advisable to take the option with the life of the parent insured, as it can make the child the beneficiary and, hence, provide protection during the child’s growing years.

I am a 60-year-old man and I have been recently been blessed with a granddaughter. A friend has suggested a single-premium life insurance plan. Does it make sense from a long-term perspective?

A life insurance plan is a thoughtful, practical and valuable gift that can help a child take the first step towards financial security. A single-premium policy is the perfect gifting?idea for a newborn—it’s a plan where you make a one-time payment for the insurance policy. In other words, it gives the assurance that with a single payment, the plan for the child continues and would help to provide for the critical milestones in the child’s life.

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

This week’s expert is Rajesh Relan, managing director, MetLife.

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