Around 64% of parents encourage their children to learn and explore new interests and hobbies through reading or the internet, across metros and non-metros, found the survey #FutureFearless that was conducted to understand the impact of the Covid-19 pandemic on the financial preparedness of Indian parents in planning for their children’s education, career and other life goals.
Two-thirds of parents surveyed have invested in life insurance solutions such as unit-linked insurance plans (Ulips), moneyback plans and endowment plans for fulfilling their children’s academic goals.
Driven by the increasing cost of education right from pre-primary levels till post-graduate education, coupled with parents’ desire to give the best to their children, saving for academics has taken precedence over other life goals for their children like saving for marriage or setting up a business.
Most parents would prefer to save for their child’s college or higher education, but nearly 40% also indicate that they would save for their child’s schooling as well. A vast majority of parents have already made a separate provision for their child’s education, as per the survey.
Karthik Raman, chief marketing officer and head – products, Ageas Federal Life Insurance said, “The Covid-19 pandemic has influenced Indian parents to rethink their financial health and priorities and work towards building a secure future for the family through wise savings and investments. Our #FutureFearless study reveals valuable insights that underscore our view that with responsible financial planning and adequate investment in life insurance, parents can fulfil their children’s dreams along with their own, thus ensuring a future that is truly fearless.”
The #FutureFearless survey examined the financial planning and investment decisions taken by parents in the current scenario, as the ongoing pandemic continues to cast a shadow over job security, business success, physical and mental health, and education.
While most people were forced to cut down on their savings and investments, it also made them relook at their financial preparedness. Saving for their children’s future and milestones emerged as the top priority for parents at 64%, along with saving for medical emergencies at 65%. This was followed by long-term wealth creation for the family at 54% and building a corpus or contingency fund for rainy days at 41%.
Investment pattern and preferences
The survey reveals that parents consider life insurance a low-risk investment tool and a reliable financial instrument to cover the family against any future uncertainties.
Data suggests that around 50% of monthly household income was being spent on savings and investments, and life insurance is among the top instruments for secured long-term investment. Other popular financial tools include bank deposits like FDs, RDs, TDs and traditional savings bank account.
Of those who have started investing for their children’s future, nearly 60% started early when the child was between 0-3 years of age, and two-third believe that they are investing enough. However, 1 in every 3 parents is unsure of the adequacy of their savings highlighting the need for greater financial education and planning.
When it comes to life insurance, money back plans appear to be the most popular choice among parents, consistently across metros and non-metros.
Insurance agents and financial advisors along with digital sources like the company website or internet search have emerged as the top sources of Life Insurance awareness as well as influence.
Preferred career choices for their children
During the Covid-19 pandemic, many families have experienced the challenges of job loss, salary cuts, uncertain business income and other financial stress. Probably due to this scenario, traditional career paths like doctor, engineer, teacher, scientist, chartered accountant, sportsperson, pilot, and defence continue to be top aspirations for parents, as per the survey.
At the same time, enhanced exposure to the digital medium and online education courses have opened their eyes to new professions and fields. Parents are supportive of their children taking up professions such as Virtual Reality Designer, YouTuber, Gamer, Drone pilot, Social Media influencer, amongst other exciting, new fields.
64% of modern-day parents encourage their children to learn and explore new interests and hobbies through reading or the internet, across metros and non-metros. Looking at parents’ dreams for their children, nearly 90% wish that their children have a better social and financial status than them and have also left it to their children to pursue a career of their choice.
The online self-administered quantitative survey was conducted across 11 cities, using YouGov’s India panel. The responses were collected from 1,333 parents with kids under the age of 10 years, using a quota-based sampling approach to have a fair representation by gender, age and target markets.
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