The competition of proving the worth of your child has grown manifolds. This is why getting your child involved in more than one activity is important now. Which means that you have to spend more than the basic necessities. It is the amount that is way higher than what your parents spent for you.

The cost of living is affected by the factor of inflation. The economy runs on this principle and there seems no escape for it.

For children, parents get worried about their quality education first and then for their wedding. Both the stages in life are crucial which require you to invest several times more than you can plan for it.

With so many investment options accessible today, parents must consider more than just saving or investing in a strategy to secure their child's future goals. They must recognise appropriate investment channels at a favourable time in order to achieve all of their financial objectives. However, before choosing a child plan, you should think about avoiding certain typical blunders. 

Common mistakes to avoid while buying a Child Plan.

You might want to support your child at the important milestones in their life. The best way to do so is by securing the finances in life. Well savings is a big task hence the better way to make funds is by buying a child plan. Before you buy a child plan, make sure you do not make these mistakes:

1. Understand how much you can invest: When it comes to investing in a child insurance plan, it's important to choose whether to take a moderate degree of risk and expect consistent returns, or to take no risk at all and expect lesser returns. In order to achieve optimal future returns, it is recommended that you take a medium amount of risk.

Raman purchased a child plan worth Rs.20 lakhs to fund his daughter’s higher education. After 10 years of policy term, Raman received a benefit of Rs.20 lakhs and sent her daughter to pursue engineering. During the term of 10 years, if anything would have happened to Raman, then also policy would have paid her daughter at the important milestone of her life. The insurance company waives the premium for the remaining policy years. Understanding the benefit of the child plan, know that when you have to invest in a child insurance plan, it's important to choose whether to take a moderate degree of risk and expect consistent returns, or to take no risk at all and expect lesser returns. In order to achieve optimal future returns, it is recommended that you take a medium amount of risk.

1. Not considerate of the future cost of education: When you are planning to buy a child plan, it is important that you consider the future cost of education. The inflation rate in the education sector is 10-12% which means that you will need more money than what is required today for any course or degree.

You cannot let your child compromise on their future goals. This is why planning for your child’s future carefully is very crucial. It is better you aim right after evaluating how much is the correct amount you would need for your child. To find out the correct amount of the child insurance cover that you would need, you can use the child future planning calculator. The calculator helps you to attain your child’s future goals.

1. Opting the incorrect policy combinations: It is of high priority to know that if you select the wrong combination of the policy term and the premium payment term versus your financial goal, you will not be able to accomplish the goal. Use the calculator to know the exact target you have to achieve. Wisely match the policy tenure with the child’s life goals. For example, like Raman needed to send her daughter for engineering after 10 years that is why he selected the policy term for 10 years. Choosing a policy term of less than 10 years will do no good.