According to a study, insurance products have become the favorite investment option for parents because they perceive them to be safe and secure financial instruments for achieving future goals.
According to an investigation, insurance products have become the most popular alternative for saving and investing among parents following the outbreak, as they are perceived as secure and low-risk instruments for reaching future goals.
The #FutureFearless survey conducted by Ageas Federal Life Insurance and YouGov India to determine the effects of the COVID-19 virus on the financial literacy of Indian parents who plan for their children’s educational needs revealed that saving money for education is more important than other life priorities.
The research was conducted in 11 different cities using an online self-administered quantitative analysis method.
The information was collected from 1,333 parents of children under 10 years old.
As a result of the rising expense of education from elementary school through graduation and parents’ desire to provide their children with the best education available, the poll indicated that savings for education had taken precedence over other life goals such as marriage and profession.
It was said that the majority of parents have invested in life insurance solutions such as Unit Linked Insurance Plans (ULIPs), money-back plans, and endowment plans to help them accomplish their children’s educational goals.
While the majority of polled parents indicated that they would prefer to save for their own college or higher education, more than forty percent also recommended saving for their child’s education. The vast majority of parents established a separate education savings plan for their children.
As the epidemic persists, it has put a shadow on work stability, company growth, mental and physical health, and education. As a result, many people had to reduce their savings and investments throughout the pandemic. Additionally, this compelled them to examine their financial preparation.
64 percent of parents ranked saving for their children’s future and milestones as their top priority, while 65 percent prioritized saving for medical emergencies. The next priority for families was the building of wealth over time at 54 percent, followed by the creation of an emergency fund or corpus at 41 percent, according to AFLI’s survey.
According to the survey, parents perceive life insurance as a low-risk investment tool as well as a secure financial instrument to safeguard the family from future risks.
Sixty percent of parents stated that they began investing in their children between the ages of 0 and 3 years old. A third of them say they are adequately investing. However, one in three parents are uncertain about the sufficiency of their funds and the need for improved financial understanding and planning.
Life insurance with a cash-back option appears to be the most popular choice among parents and is accessible in both non-metropolitan and metropolitan areas.
Many families have experienced the stress of job loss or salary reductions, the unpredictability of business earnings, and other financial strains. As a result, parents are selecting traditional career paths, such as engineer, doctor scientist, teacher, and chartered accountant, or pilot, athlete, and defense, as the best career options for their children.
However, greater exposure to digital media and online courses in education has exposed students to new industries and careers, such as virtual reality designer and YouTuber, gamer drone pilot, and social media influencer, among others.
Karthik Raman, Chief Marketing Officer and Head of Products at Ageas Federal Life Insurance, stated on the survey’s findings that the COVID-19 epidemic has prompted Indian parents to reevaluate their health financial and priorities and to work toward securing a secure future for their families by making smart investments and savings.
What is a good illustration of an insurance product?
A service contract or insurance product is one in which an insurer or service contract provider offers to pay or indemnify a third party for damage resulting from a set of predetermined contingencies or dangers. A reinsurance agreement, a reinsurance treaty, a reinsurance pool, insurance products for property and casualty, health and accident insurance, life insurance, surety bonds, specialized risk insurance, and warranty programs. All insurance and reinsurance products involving the assumption of risks or the payment or indemnification of specified losses.