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5 Steps to Building a Bright Future for Your Child

A child brings happiness and a fresh perspective to parents and the entire family. From the moment your little one enters the world, ensuring their safety and health becomes your top priority. However, apart from immediate needs, it is crucial to focus on financial planning for your child’s future right from the beginning. Economic stability and structured planning make the way for your child’s secure and prosperous future.Read More

Financial planning is not limited to adults or senior citizens; it is equally significant for children. By investing wisely and planning strategically, you can help your child achieve their aspirations and goals. Here are five essential steps to build a bright and secure financial future for your child.[1]Read Less

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Written ByPalak Bagadia
AboutPalak Bagadia
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Palak Bagadia, Associate – Digital Marketing at Bajaj Allianz Life, with experience spanning content and performance marketing, recruitment, employee engagement in the BFSI industry.
Reviewed ByRituraj Singh
AboutRituraj Singh
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Rituraj Singh,With over 6.5 years of experience in the insurance industry, Rituraj Singh, Manager- Product & Brand Marketing at Bajaj Allianz Life Insurance overlooks new product launches, compliance, and brand projects, leveraging artificial intelligence and technology to enhance outcomes.
Written on: 21st Jan 2025
Modified on: 24th Jan 2025
Reading Time: 15 Mins
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1. Invest in a Child Education Plan
 

Education is one of the most significant investments you can make in your child’s future. With the rising costs of quality education, starting early is crucial. A child education plan ensures disciplined savings and provides financial support to meet your child’s educational aspirations, regardless of economic fluctuations. These plans come with insurance coverage and benefits like maturity payouts . Educational planning allows parents to focus on long-term goals without worrying about market risks or sudden expenses. Consider exploring various child plans to ensure flexibility and security.[1]
 

2. Secure Life Insurance Coverage
 

Life is unpredictable, and as a parent, ensuring your family’s financial security is a fundamental responsibility. Opt for a comprehensive life insurance policy that covers your child’s future needs, such as education, healthcare, and daily expenses. A term insurance plan, with a significant sum assured, can act as a financial safety net in case of unforeseen circumstances. Additionally, policies with critical illness riders or disability benefits provide extra protection, ensuring that your financial planning for your child’s future remains intact even during challenging times.[1]
 

3. Impart Financial Literacy
 

Financial education is as important as financial planning. Teach your child about the value of money, budgeting, and saving from an early age. Simple practices like maintaining a piggy bank or helping them create a basic budget instill lifelong financial discipline. As they grow older, guide them on investment basics and the significance of financial independence.[1]

4. Build an Emergency Fund
 

Emergencies can arise at any time, and having a dedicated contingency fund ensures you are financially prepared. An emergency fund specifically set aside for your child’s needs acts as a buffer during unforeseen situations such as medical emergencies, school admissions, or extracurricular activities. Aim to save at least 6-12 months’ worth of expenses. Building an emergency fund should always be a part of your financial goal. These could be term insurance plans, SIPs, Fixed Deposits etc. Regularly review and update this fund based on your child’s growing requirements to ensure your financial planning to build your child's future is comprehensive.[2]
 

5. Aim for Long-term Investment
 

Mutual funds designed for children, provide diverse investment options, including equity, debt, or balanced funds. By leveraging the power of compounding, mutual funds enable significant wealth creation over time. For instance, Systematic Investment Plans (SIPs) in child-specific funds can be a disciplined way to grow wealth steadily. Choose mutual funds based on your risk appetite and investment horizon..[3]

Key to Reviewing and Rebalancing Financial Plans
 

Regularly revisiting your financial plan ensures it remains aligned with your child’s evolving needs and market changes. Here are some key benefits:
 

1. Adjusting to Lifestyle Changes:
 

Life events such as promotions, bonuses, or the birth of another child can impact your finances. Regular reviews help accommodate these changes effectively.[4]

2. Tracking Goals:
 

Periodic reviews allow you to monitor progress and reallocate funds if a short-term goal is achieved. For example, funds used for a completed goal like purchasing a home can be redirected to long-term plans such as education.[4]

3. Balancing Asset Classes:
 

The equity-debt balance in the investment portfolio is expected to fluctuate over a 12-18 months’ period due to market conditions. The portfolio is designed with consideration of macroeconomic factors, and regular rebalancing will ensure that the allocation remains aligned with the intended strategy throughout.[4]

4. Securing Equity Gains:
 

Your investment portfolio is in your hands. In case of bullish markets, try to shift your equity gains to debt instruments. This will lock profit and mitigate risks.[4]

5. Replacing Underperforming Investments:
 

Regular reviews help identify and eliminate non-performing assets, replacing them with better-performing alternatives.[4]
 

Conclusion
 

Securing your child’s financial future requires a proactive and disciplined approach. By investing in  life insurance and child education plans while fostering financial literacy and saving habits, you create a foundation for your child’s growth and success. A well-structured financial planning for a child’s future today ensures a brighter tomorrow for your little one.
 

Frequently Asked Questions (FAQs)
 

1. Why is financial planning for a child’s future important?
 

Financial planning helps ensure your child’s educational, healthcare, and personal aspirations are met without financial strain.

2. What is a child education plan?
 

A child education plan is a savings and insurance plan designed to secure funds for your child’s education.[1]

3. When should I start planning for my child’s future?
 

It’s best to start as early as possible to leverage compounding and achieve long-term financial goals.

4. How much should I save for my child’s education?
 

The amount depends on your child’s aspirations, inflation rates, and the cost of education.

5. What is the role of financial literacy in securing a child’s future?
 

Financial literacy equips children with essential money management skills, promoting independence and responsibility.

6. How do I choose the right insurance policy for my child?
 

Evaluate policies based on coverage, premium affordability, and benefits like critical illness riders.

7. What is rebalancing in financial planning?
 

Rebalancing involves adjusting your portfolio’s asset allocation to maintain financial goals and reduce risks.[4]

8. What is an emergency fund?
 

An emergency fund is a reserve of liquid assets set aside to cover unforeseen expenses.
 

 

 

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The views stated in this article are not to be construed as investment advice and readers are suggested to seek independent financial advice before making any investment decisions. For more details on risk factors, terms and conditions please read the sales brochure & policy document (available on www.bajajallianzlife.com) carefully before concluding a sale. Bajaj Allianz Life Insurance Company Ltd., Regd. office Address: Bajaj Allianz House, Airport Road, Yerawada, Pune - 411006, Reg. No.: 116, CIN: U66010PN2001PLC015959, Call us on toll free No.: 1800 209 7272, Mail us: customercare@bajajallianz.co.in

Tax benefits as per prevailing Income tax laws shall apply. Please check with your tax consultant for eligibility

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*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.

~Individual Death Claim Settlement Ratio for FY 2023-2024

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

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I hereby authorize Bajaj Allianz Life Insurance Co. Ltd. to call me on the contact number made available by me on the website with a specific request to call back. I further declare that, irrespective of my contact number being registered on National Customer Preference Register (NCPR) or on National Do Not Call Registry (NDNC), any call made, SMS or WhatsApp sent in response to my request shall not be construed as an Unsolicited Commercial Communication even though the content of the call may be for the purposes of explaining various insurance products and services or solicitation and procurement of insurance business

 

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%%Above illustration is for Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V03) considering Male aged 25 years | Non-Smoker | Policy Term (PT)– 30 years | Premium Payment Term (PPT) – 30 years | Sum Assured opted is Rs. 1,00,00,000 | Online Channel | Standard Life | 1st Year Premium is Rs. 6,238. 2nd Year onwards premium is Rs. 6,659. Total Premium Paid is Rs. 1,99,349 | Medical Rates | Yearly Premium Payment Mode | Death benefit opted is lumpsum payout and monthly installments (Lumpsum Payout Percentage : 45, Income Payout Percentage : 55) | Premium shown above is exclusive of Goods & Service Tax/any other applicable tax levied, subject to changes in tax laws, and any extra premium and is for illustrative purpose only. This is inclusive of all the discounts mentioned above.

##Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

@Term Insurance plan bought online directly from Bajaj Allianz Life Insurance has no commissions involved.

^^The Return of Premium amount is total of all the premiums received, exclusive of extra premium, rider premium and GST & /any other applicable tax levied, subject to changes in tax laws
Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

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Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V04)

*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

~Individual Death Claim Settlement Ratio for FY 2023-2024

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116


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*Not available if policy issued after 14th July 2025.

 

^Benchmark: Nifty 500 Multifactor MQVLv 50 Index past 5 CAGR Returns, as on 30th May 2025. Past returns of a fund are not necessarily indicative of the future performance of the fund. | Please consult the financial advisor before investing.

 

The Unit Linked Insurance Products do not offer any liquidity during the first five years of the contract. The policyholder will not be able to surrender or withdraw the monies invested in Unit Linked Insurance Products completely or partially till the end of the fifth year.

 

ULIPs are different from the traditional insurance products and are subject to the risk factors. The premium paid in ULIPs are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. Bajaj Allianz Life Insurance Company Limited is only the name of the Life Insurance Company and Bajaj Allianz Life Future Wealth Gain IV - A Unit- linked Non- Participating Individual Life Savings Insurance Plan (UIN:116L202V01), Bajaj Allianz Life Goal Assure IV - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN: 116L204V01), Bajaj Allianz Life LongLife Goal III is A Unit-linked Non-Participating Whole Life Insurance Plan (UIN:116L203V01), Bajaj Allianz Life Invest Protect Goal III - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN: 116L205V01), Bajaj Allianz Life Magnum Fortune Plus III - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN: 116L207V02), Bajaj Allianz Life Goal Based Saving III - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN:116L206V01),  Bajaj Allianz Life Fortune Gain II- A Unit-linked Non Participating Individual Life Savings Insurance Plan (UIN- 116L196V02) and Bajaj Allianz Life Smart Wealth Goal V - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN: 116L201V03) are only the name of the unit linked insurance contracts and does not in any way indicate the quality of the contract, its future prospects or returns. Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns. For more details on risk factors, terms and conditions please read sales brochure & policy document (available on www.bajajallianzlife.com ) carefully before concluding a sale.

 

Nifty 500 Multifactor 50 Index Fund is available Bajaj Allianz Life Future Wealth Gain IV - A Unit- linked Non- Participating Individual Life Savings Insurance Plan (UIN:116L202V01), Bajaj Allianz Life Goal Assure IV - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN: 116L204V01), Bajaj Allianz Life LongLife Goal III is A Unit-linked Non-Participating Whole Life Insurance Plan (UIN:116L203V01), Bajaj Allianz Life Invest Protect Goal III - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN: 116L205V01), Bajaj Allianz Life Magnum Fortune Plus III - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN: 116L207V02), Bajaj Allianz Life Goal Based Saving III - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN:116L206V01), Bajaj Allianz Life Fortune Gain II- A Unit-linked Non Participating Individual Life Savings Insurance Plan (UIN- 116L196V02) and Bajaj Allianz Life Smart Wealth Goal V - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN: 116L201V03)

 

In addition to the already existing funds, Nifty 500 Multifactor 50 Index Fund is now available with the above mentioned products. Customer has an option to choose from other available funds apart from Nifty 500 Multifactor 50 Index Fund

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I hereby authorize Bajaj Allianz Life Insurance Co. Ltd. to call me on the contact number made available by me on the website with a specific request to call back. I further declare that, irrespective of my contact number being registered on National Customer Preference Register (NCPR) or on National Do Not Call Registry (NDNC), any Call made, including via Voice over Internet Protocol & WhatsApp, SMS or WhatsApp messages, in response to my request shall not be construed as an Unsolicited Commercial Communication even though the content of the call may be for the purposes of explaining various insurance products and services or solicitation and procurement of insurance business

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