What Are the Insurance and Investment Options For Parents

Parents never stop worrying about their kids, irrespective of how young or old they are! 

Parents work hard to provide the best life for their kids. They save, invest, and spend to ensure their children never face any hardship. However, while this is a wonderful thing to do, every individual should also plan for his or her own financial wellbeing. 

Your kids may be your priority, but you also should have a retirement plan, a health insurance plan, etc so that you never have to depend on your kids. An ideal parent, therefore, invests in a wholesome manner which offers protection to the parent and the entire family as well, both in the short as well as the long run.

Insurance Options for Parents

Parents who have young children to look after need to invest heavily in life insurance plans. There are different forms of life insurance that can help parents of all ages. 

Here’s a detailed look:

• Young Parents - As a young parent or a new parent, you need to invest in a good term insurance plan. A term plan would pay a lump sum amount of money to your beneficiaries, who should ideally be your spouse or kids, after your demise. If anything were to happen to you while your children were still young, the sum assured would make their life a lot simpler. So get a term plan without thinking any further as it is important and also it is very affordable.
• Middle-aged Parents - If your children are slightly older, but still have many financial milestones to overcome, such as college admissions, entrepreneurship, marriage, etc, you can consider buying a child plan. This is a good insurance plan where the child would get lump-sum amounts of money at regular intervals. If you die, the premium will be waived off, but all the benefits of such a plan will continue.
• Retired Parents - If you have retired, or are about to retire and your kids have grown up, you need to reevaluate your life insurance plans. If you have some child plans or endowment plans that you bought to protect your minor kids, you can surrender them and retrieve the cash value. You can then invest the money in an immediate annuity plan so that you can continue to pay your own bills and never have to ask your kids to help you financially.

Apart from life insurance, parents of all ages should invest in health insurance as well. Health insurance plans prove to be very helpful. As a young parent, you can get a family floater health insurance plan to ensure you have sufficient medical insurance coverage for yourself, as well as your kids. As a middle-aged or retired person, you need a health insurance cover of your own to ensure you can take care of your own medical expenses without having to depend on your kids.

Investment Options for Parents

Most parents these days are very smart with their investments. They understand how important it is to invest at least a part of their earnings to generate more wealth, save taxes, and also provide a good and luxurious lifestyle to their family members. 

If you are a parent looking for some good investment opportunities, here are the best options for you:

• Sukanya Samrdiddhi Account - This is an excellent savings plan that you can buy to protect the financial future of your daughter. You need to make annual investments into this post-office savings scheme. When your daughter turns 18 years, she will receive the lump sum amount of money which she can then use for her future.
• PPF - This is another excellent post office saving scheme where you can stay invested for a period of 15 years. You need to make annual contributions, which add up and become a corpus for you to use for your child’s (or your own) benefit after it matures. You can plan properly and use a PPF account to ease the way for your child’s important milestones such as university admission and marriage.
• NPS - The National Savings Scheme allows you to invest small amounts of money over a long period of time. Then, after you retire, it offers regular payouts which work as an income replacement, allowing you to remain financially independent till the last day of your life.
• SIPs - As a parent, you surely have many responsibilities and your budget may be a bit tight. In such cases, investing large sums of money becomes difficult. The SIP investments, therefore, prove to be handy as you can invest in small amounts and build up a large fund over time.
• Mutual Funds - The mutual funds are not as risky as the equity funds. They also offer higher returns than the post office saving schemes and bank fixed deposits. These are some of the reasons why they prove to be excellent investment options for parents who always look to earn dividends that can help them provide a better life for their kids.

Invest in a few of the above-mentioned platforms and you will earn some very handsome yields. This way, you can secure the future of your children and also ensure you never become a financial burden for them at a later stage in life.

In conclusion

Insurance and investment go hand-in-hand, and if you want to secure the financial wellness of your child, you must get the right plans at the right time. Invest smartly to ensure that no one you love ever faces any economical hardships, which is also beneficial for your tax planning.