Parents should buy insurance policies and properties to secure their children’s future. However, taking precautions is crucial when dealing with such financial matters.
Many people work hard to provide for themselves and their descendants for current and future needs. The ultimate goal is to ensure their children’s stable and secure life.
After the birth of their children, newly married couples often consider taking out insurance policies in their children’s names. However, it’s essential to consider the implications of such decisions carefully.
While parents want to ensure that their children will be financially supported in unforeseen circumstances, they do not wish to benefit from any misfortune that may befall them.
It’s worth noting that insurance companies may issue policies in the name of children but may not provide coverage until they reach a certain age. As a result, financial experts advise against taking out insurance policies for newborn babies.
For instance, if a newly married couple takes an insurance policy on the advice of an insurance agent when a child is born, and there is no policy in the person’s name by the time of death, the family may face financial difficulties.
In addition to insurance policies, financial experts recommend considering Public Provident Fund (PPF) schemes and mutual funds as alternative options for securing children’s future financial needs.
It’s essential to be aware that insurance policies are long-term commitments, and failing to pay due to future financial difficulties may result in surrender charges.
When purchasing property in the name of children, it’s essential to be cautious, as there may be legal complications, such as the need for court permission to sell immovable properties held in the names of minors.
Grandparents may opt to buy immovable properties in their grandchildren’s name to safeguard against potential misappropriation of property held in their parents’ names.
Bank deposits in the name of a minor child can be canceled midway, and written consent is typically required for taking a loan against such deposits.
Ultimately, it’s important to carefully consider the best financial options for securing a child’s future, including suitable insurance policies for parents and child policies that provide comprehensive coverage.