Parents often spend sleepless nights thinking about how their children will cope if they were to die. Traditionally, higher education and a smooth transition to professional life have figured high on the list of parents' priorities. Most of the child plans launched till now have catered to these simple desires. However, with changing times, it is becoming increasingly important to understand the consumer's needs more deeply, identifying specific needs—going well beyond education and profession—and facilitating the overall development of the child.
In an era of constantly evolving needs, where academics is but a stop in the child's overall career growth, parents are prone to rejecting plain vanilla products that focus only on education and profession. They are demanding innovative products because they realise that success is multidimensional and that the all-round development of the child is a successenabler. For instance, if a child is a budding cricketer or a talented singer, then a product that focuses on academics serves little purpose. Parents of such a gifted child should ideally invest in a plan that offers scope to enhance the child's talent.
Young parents have other concerns as well. What happens if a second child is born? Would the parents need to buy a new child plan? Not necessarily. They could buy a plan which allows them to enhance the premium and life cover on the birth of a second child. This would help support additional expenses, offer adequate protection to the family and provide a single investment vehicle for both the children.
The gradual shift in focus to the child's holistic development and skill enhancement augurs well for the future. It is both a challenge as well as an opportunity for insurance companies to expand the market. What they also need to do is educate parents to enable them to buy a plan that suits their child's needs the most.
V. Viswanand is Director & Head, Products, Max New York Life
