Children Plans are insurance plans that parents take out for their children. While these plans insure a person, they aren’t life insurance plans. At best, they can be seen as systematic insurance plans that can be deemed systematic investment plans that allow parents to put money away for the future. So how do children plans make sense for you? We find out.
1. It helps you create targeted saving
Most of us have our own personal rules about how to save money for the future. In the consumerist society that we live in, however, these savings tend to keep trickling out in the guise of luxury purchases every now and then. Having a children plan however, help you create a more targeted saving that is earmarked for a sole purpose – for your kids’ education and their weddings.
2. Planned saving helps you secure the child’s future
A conservative estimate suggests that it would take as much as triple the amount of money to fund your child’s education or wedding 20 years in the future than it does now thanks to a little monster we like to call inflation. As a parent, it is your responsibility to be able to provide your child with the right kind of tools to allow them to fulfill their potential in life and having a large saving through a children plan would help you stay financially prepared for it.
3. Children plans allow you to streamline your personal savings
Most parents put away a decent sum of their earnings so that they may be able to provide for their kids’ needs in the future. If you have children plan in place, you would be able to set up a dedicated personal savings fund or a retirement fund of your own that would secure your own future once you have funded your children’s education and wedding.
4. Children’s plans make budgeting easier
Having children plans in place allows parents to make budgets more conscientiously. Once you have taken away the kind of saving that you need to have in place for your child’s education in your future or their marriage, you are better able to see what kind of money you have leftover to spend on luxuries today.
5. Tax benefits
Unlike other chunk saving schemes, investing in a children plan allows parents to benefit from tax breaks too. These breaks are subject to local laws but they are certainly tax friendly and parents are able to save a large chunk of their actual earnings for their kids’ futures.