It is believed that parents shape the future of the child. Their decision is basis of the child’s strong foundation. Just planning an educational degree is not sufficient anymore. With the changing trend we realise progressively that the focus is shifting more towards ‘quality’. Hence the kind of planning, which goes in for preparing a stronger future has changed drastically over the years.

As a conventional method, a stipulated amount is invested in the fixed deposit. Later on, as the need arises, these funds are encashed for various stages of the child’s life. Looking at the returns and the dipping interest rates, this method of securing future may now seem outdated. It would just confirm your worst fears when you realise the savings are marginal and is not in tandem with the rising inflation rate.

In today’s world the cost of pursuing higher studies in foreign universities, or for that matter management courses from any reputed institute comes at a hefty cost. If you have been following the conventional mode of investing, the amount garnered will not suffice your needs. So, what’s the best thing you can do?

To meet various needs, have multiple investment portfolios, which will help in creating enough capital to fund the various needs of the child. If it seems a tough job, take the help of a financial advisor who should be an ideal person to help you with the right planning for your child.

It wouldn’t be an overstatement to say that a stronger tomorrow for your child is incomplete without insurance component in it. Life insurance is a must as it plays an important role in assuring the child’s future. Various types of child insurance products are available in the market that serves the purpose. Individuals need to understand these products thoroughly to take the right decision.

An example will make it easier to understand. Let us consider a 30-year old parent who has a 2-year old child. The individual opts for a money back insurance plan for a term of 15 years. The sum assured is Rs. 5,00,000. Moneyback plans offer stipulated amount at regular intervals. Say, after 4 years, the policyholder will receive 15% of the sum assured i.e. Rs. 75,000. This amount can be utilised for his growing needs. Again after 4 years the policyholder receives 15% of the sum assured. And the balance amount is given as maturity benefits, which include additional benefits like loyalty additions and /or bonus, which will coincide with child’s further education. Keeping the growing needs in mind, make your pick. You can also consider Unit Linked Insurance Plans (ULIP). ULIP is a good investment option that takes care of your insurance needs and also gives reasonable returns. However, the returns are subject to the performance of the funds.

Today, the market in more dynamic in nature and people are flooded with varied options. An incorrect decision can have disappointing repercussions. Therefore, while making decisions, it is important to indulge a practical approach, which will yield you fruitful results.

Children always take the highest priority in a parent’s life. Parents can do whatever is in their reach to give the best. And only a sound practical planning will ensure that. A prudent planning could perhaps be the best present you could ever gift your child.