When a child is born, maybe he or she, it slowly grows up to become either a boy or a girl. The transition continues as the boy or the girl becomes a doting father or a heedful wife, which slowly turns them into grandfather and grandfather as the generation moves on.
Financial goals and life cover
As a parent, there would be goals to be met and each of them requires money. The financial planning process for an individual begins by identifying the various goals at different stages of life. Even before you start to save for the child needs as a parent, first consider taking a life insurance cover.
Such a protection helps the surviving family members to maintain their standard of living in the event of death of the main earning member. Life insurance, therefore, acts as an income replacement tool. In addition, a life cover provides financial support to meet the various financial goals, as desired by the parent, at different life stages of the individual, in case of any mishappening.
Risk in self-funding goals
Some of the common avenues that a parent invests in for accumulating wealth include public provident fund (PPF), mutual funds, shares, gold and real estate. All these are self-funded in nature. So, one needs to be alive and keep investing in them to keep the corpus growing till the time it is put to use.
But, life might throw up nasty surprises. The risk of dying early exists which could derail the entire investment process. In addition to the mental trauma, the surviving members of the family, , could also suffer from loss of income thereby making long term goals vulnerable to vagaries of circumstance. In case the parent dies an untimely death, the child's deam of higher studies or a plan for a decent marriage of the child may get jeopardised.
Want to protect your family? Get them insured before its too late
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