It is Father’s Day. As your children shower you with handmade cards and thoughtful gifts bought from their meticulously saved pocket money, one is forced to reflect… ‘Am I becoming the superhero father they deserve?’

You sure can be their superhero! As a father, you’ve been your family’s rock, mentor, and superhero; you would do anything to give wings to their dreams and fuel their ambitions. This Father’s Day, why not consider giving your children a return gift as powerful as your love? Here are three financial instruments every superhero dad should consider:

Term Insurance Plan

Term insurance is the simplest and arguably the most essential insurance product you should have, as a responsible father. Term insurance ensures that your spouse and children will have the financial support they need to maintain their lifestyle and cover essential expenses in your absence. Term premiums are quite affordable and provide many options on the amount of coverage and age till which you are covered.

Also Read: Buying life insurance? Know about the lock-in period to make the most of it

The purpose of this instrument is to replace the income in case of your unfortunate demise – choose an amount (called “Sum Assured” in insurance language) that will cover your family’s financial needs through its interest alone (of course, insurance companies limit the sum assured to certain amount based on your current income). Opt for a life cover till the age you see yourself working to support your family financially.

Some fathers buy a term insurance till the age 99 or 100. That’s a way for them to leave a legacy for their children.

Savings Insurance Plans

When you have specific financial goals to meet your children’s needs and you don’t want to take market-related risks on them, savings insurance plans are the best way to reach those goals.

It could be your daughter’s college education that’s coming up in the next 7-10 years or son’s higher studies or wedding gifts and expenses when they are getting married in a decade or so. These are goals and timeframes where you don’t want to sign up for a market risk. Nor do you want to be affected by the interest rate fluctuations of fixed deposits. Savings products offer best of both worlds – they provide an assured amount at the end of the term irrespective of the stock market conditions and the prevailing FD rates.

Savings plans are one of the few financial instruments that provide long term guaranteed interest rates. And what’s more, since savings plans have mortality charges built into them, even in case of your unfortunate passing away, the financial goal is still protected and your nominees get both the maturity amount and mortality sum assured amount.

In most cases, you can also convert the lumpsum payout at maturity into an annual income for 10/20/30 years or full life-time. This could be your secondary income or a retirement plan, so you don’t have to be a burden on your kids when you retire.

Unit-Linked Insurance Plans (ULIPs)

For those goals where short-term market fluctuations don’t matter a whole lot, ULIPs are the best financial instruments. These market-linked plans have the potential to offer better returns compared to traditional insurance policies. ULIPs are a fantastic instrument for creating a retirement fund for yourself or setting up a fund for your children’s marriage and higher education, if they are still quite young.

By investing in ULIPs, you’re not just relying on market growth but also ensuring that your investment aligns with your long-term financial goals. Most ULIPs provide the flexibility to choose from multiple funds so that you can get as aggressive or as conservative as you want, based on your risk appetite and life stage. And yes, ULIPs, of course, offer a life cover that can help your family financially in case of your death.

Secure Your Child’s Future Today

This Father’s Day, take the proactive step of investing in life insurance covers that guarantee your family’s financial security. Whether you opt for savings insurance, ULIPs, or term insurance, each plan offers unique benefits that cater to different needs and financial goals. Be the superhero your children look up to by ensuring their future is protected. Invest for your children, TODAY!

(By Srinidhi Shama Rao, Chief Strategy Officer (CSO) at Bandhan Life Insurance)

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