As a father, you have a different role to play in your life. Responsibilities change over time as children grow older and reach adulthood. What remains a crucial link throughout the process is financial security until the children are alone and get married to begin their journey independently. During this time when you see your children growing up, you need to make sure that as a father, they are provided with adequate financial security until their goals are met.
In an exclusive interview with FE Online on the occasion of Father’s Day, Manish Falor, Chief Financial Officer, Aegon Life Insurance, find out what goals a dad needs to achieve, how often to review them, and other financial and insurance tips you can use.
For a father with small children versus a father with older children, what will be the different approach when buying life insurance?
Insurance is purchased for protection. When your children are young, usually under the age of 20, you have to take care of almost all of their needs. This means that the financial cushion you create and the investments you make in them must be strong. You will not only need to make sure that they are financially secure in your absence, but also create a corpus to fund their studies, marriage, etc.
With older children, many of the responsibilities have already been taken on. Also, your kids may not be as dependent on you as they used to be when they were growing up. For example, your child might have finished school and might even be working.
In addition, you would also be older and may have pre-existing health issues. With this in mind, you should look for a life insurance policy with relatively lower premiums and large payouts.
What goals can a father achieve by purchasing a life insurance policy?
All fathers want to give their children a quality education, finance their dreams and even create a financial body that will serve as a safety net. The right life insurance policy can help you achieve all of these goals.
How often should life insurance needs be reviewed?
The review of any financial investment, including a life insurance policy, should be done either periodically or when circumstances change. As a general rule, if there is no change in your situation, it is best to review the policy every five years.
However, if there are any changes in your personal circumstances, such as a marriage, the birth of a child, or a significant change in income, then this would be a good time to review your life insurance policy.
For single parents who are caring for their children on their own, how important is it for them to have adequate insurance coverage?
If insurance is important for every individual, whatever their marital or family situation, it is even more important for single parents who are looking after their children alone.
There are two things to keep in mind here. First, that your health and well-being become an essential factor since you are taking care of your child on your own. Thus, any decrease in income or increase in medical expenses due to health problems can be detrimental to the savings you could make for your child’s future, for example, his education fund. An adequate health insurance policy will allow you to continue to save and invest for your child despite an unforeseen financial burden.
Second, life insurance coverage will ensure that in the event of an unfortunate death, your children are not financially deprived. They can avail the proceeds of life insurance coverage.
For buyers who are not tech-savvy and struggle with insurance issues, what should their approach be?
Today, innovative digital solutions are deployed to make the entire insurance purchasing process easy, transparent and fluid. Perhaps the only technology you really need to understand is how to use a cell phone. We can safely assume that a majority of individuals can accomplish this.
So my only advice here would be that you don’t need to balk at the sound of technology. The user journeys are designed in such a way that it is easier and not more difficult to purchase insurance online. With just a few clicks, you can purchase insurance for the safety and comfort of your homes.
What advice would you like to give to all fathers this Father’s Day?
Being a father is a blessing and a source of great joy. However, it is also a great responsibility. You are responsible for the well-being of the present and the future of your family. And while this is important, you also need to plan for your retirement. Here is my advice for all fathers:
1. No matter how meticulous you are with your finances, not having the right insurance can hurt your financial future. It is essential to protect your family with adequate life and health insurance.
2. Along with insurance, it is essential to build up an emergency fund and a pension corpus. Your emergency fund should have enough cash to cover at least six to twelve months of living expenses. The pension corpus should be able to cover your expenses and serve as a second source of income when you are no longer earning.