Contact us

To Buy: 1800-258-5899 (9:30 AM to 6:30 PM)


For Existing Policy: 1800-103-0003/ 1800-180-0003/ 1800-891-0003



Locate Branch



Search Button

4 Financial Mistakes Made by Parents

dateKnowledge Centre Team dateSeptember 7, 2021 views214 Views
Financial Mistakes | Financial Planning | Child Education Plan

Indian parents are considerably protective when it comes to their children. However, this protectiveness can sometimes get too much and hinder children from growing into fully independent and self-sufficient individuals. It is imperative to make Indian parents aware of their financial mistakes so they can plan in a better way to guard the economic future of their children. From sending your kids to the best schools and colleges to buying the best child insurance plan, you do everything to shield their future. However, there are some common mistakes that you make as a parent.

Four Common Financial Mistakes that Parents Make

As parents, when it comes to your children, all you think about is how you can help them grow into healthy and educated individuals. In addition to this, every parent tends to fret the most about the financial practices of their children.

However, as a parent, you need to understand that your children pick up their financial habits according to their requirements. Hence, instead of being over-protective of the financial position of your grown-up or growing children, you must try and rectify some of the common financial mistakes mentioned here that you make as parents.

1. Not saving for your retirement

This usually happens with all parents, and almost every Indian parent is guilty of this. As soon as a kid comes into your life, all your material choices, especially money-related ones, spin around your children.

Yet, it would help if you remembered to put something aside for your future. Not putting something aside for your retirement today can cause problems later.

Relying on your children to help you through your old age is not a good plan as it can create an additional burden on their finances. Hence, it is advisable to start investing some funds in a retirement or pension plan from an early age that help you remain financially independent once you retire. Apart from this, investing funds in a retirement plan also allows you to build a corpus and remain financially guarded against unforeseen monetary risks.

Learn how to start your retirement plan.

2. Overlooking the importance of life insurance

You never understand what might happen the next moment, and it is wise of you to remain prepared for it. A life insurance plan is one such step that can ensure your family against the vulnerabilities of life.

Benefits of Buying a Life Insurance Plan | Buy the Best Life Insurance Policy

When it comes to life insurance, you can choose the time limit you want, your immediate beneficiary, and how much you will deposit in the insurance. The objective of life insurance plans is to give monetary support to your family if there should be an unanticipated occasion.

Life insurance also gives you the benefit of paying off pending expenses or debts after you are gone so children do not get burdened with your monetary obligations. To top that, you also have the choice of planning your life insurance as an inheritance. Talk to your bank about a life insurance policy now.

3. Not saving for your child's education

No matter how young your kid is, it is always best to start saving early for their education. The more you delay saving for their future, the more it will snowball. Also, the fundamental justification for the downfall is the high levels of non-performing assets (NPAs). Hence, to avoid all the last minute hassle, it is advised that you start saving for your child's higher education from the time your kid is born.

Learn why new parents should buy a life insurance plan.

4. Not inculcating saving habits in your children

While growing up, it is normal for kids to gain from their parents and emulate their habits. Nonetheless, in an ordinary Indian family, children are not involved in monetary matters. Usually, guardians teach their kids not to stress over cash. This practice or perspective won’t help out children much when they grow up.

If you don’t teach children to save cash, spend it carefully and set something aside for the future, they’ll face troubles later. Educating your children about finances is of great importance. Without basic knowledge about responsibly handling money, your children might not be prepared for the real world. They may find it difficult to adjust cheque books, plan their budgets, and obviously, save money.

Also, when your children reach the appropriate age, you should tell them how different ways of saving money can help them out if they keep investing and have patience. Remember not to overwhelm them with knowledge because they may get confused. Make sure that they understand the significance of money and don’t make financial mistakes you have made. Also, this is a way to guarantee that your children do not feel lost when it comes to savings, taxes, planning monthly budgets, or investing in savings plans.

Now that you have understood what mistakes you are making as a parent, it is better to start working on rectifying your mistakes to create a strong financial net for your children. If you are looking for some comprehensive savings, retirement or plans to remain financially guarded, look no further than Canara HSBC Oriental Bank of Commerce. Here you can get the most extensive saving plans tailored as per your distinct monetary needs that yield the highest return on your investments.

Related Articles

Browse by Categories

Get a Call Back

Do you want us to call back Please fill the form below

Annual Income (In Lacs)

Our Products

TERM Insurance PLAN

TERM Insurance PLAN

Whole life cover option available

Increase your life cover with changing life stages

Return of premium & in-built protection options

Multiple premium payment options

Avail tax benefits on premiums paid as per tax laws


Unit Linked Insurance Plan

8 funds and 4 portfolio strategies to invest

Loyalty additions and wealth booster

Return of Mortality Charge is available on Maturity under all three cover Options

Flexibility of switching between the fund options to take benefits of market movements or change in risk preference

Pos Easy Bima Plan

Top Benefits

Hassle free

Get double life cover in case of accidental death

Choice of flexible premium payment and policy term

Avail tax benefit on premium paid

Frequently Asked Questions (FAQs) Related to Life Insurance Policies

The premium is one of the most important factors to consider before buying a life insurance policy. Many people buy a life insurance policy with a high sum assured but are unable to process the premiums for the entire premium payment tenure. You can get a better idea of the premium outgo with the premium calculator available in the 'Tools and Calculator' section of

Life insurance plans come with several riders which increase the efficiency of the policy for the buyer. For instance, if you have a history of terminal illness in your family it would be advisable to opt for terminal illness rider with your term insurance plan. Riders or add-ons help in customising the standard policy benefits for the requirement of different families. The iSelect term insurance plan comes with a built-in cover for terminal illness, and option for protection against accidental death or disability. You can also opt to cover your spouse's life under the same policy by paying an additional premium.

Life insurance companies calculate the premiums based on several factors such as age, gender and occupation.

Age: It is one of the biggest factors that influence life insurance premiums. Premiums tend to be low when the life insured is younger as the chance of contracting diseases is low. Young people also opt for the best life insurance policies with longer tenures and pay premiums for a longer duration, which makes the policy cheaper for young people.

Gender: The insurance premium for women is generally lower when it comes to life insurance plans. Women live longer and pose a lesser risk of a claim leading to lower premiums for them.

Lifestyle habits: The premiums for people who smoke or drink is always higher due to higher health risks.

Policy term: Policy terms are also taken into consideration by insurers while deciding the premium amount. Life insurance policies with longer tenure are cheaper as compared to short-duration policies.

Mode of purchase: The platform that you use to buy the best life insurance policy also determines how much you will have to pay for the plan. People who buy life insurance policies online have to pay lower premiums as compared to offline policies.

Occupation: The nature of your work is an important factor that influences the premium amount. Certain occupations like shipping and mining are considered more dangerous as compared to jobs in services industries. The insurance premium rises with the risk profile.

Processing life insurance claim is a transparent and smooth process with Canara HSBC Life Insurance.

In case of the death of the life insured, the nominee will have to intimate the company by filling a Death Claim Form and sending it to the nearest branch office.

Once the form is received, the claim is registered by the insurer.

After the registration of the claim, the company will send the claims pack along with the related forms such as physician’s statement form and employer certificate that need to be filled.

Along with the duly filled forms a few documents such as original [policy document, death certificate, copy of bank passbook, hospital or treatment records, photo identification and address proof have to be provided.

The claim is processed on the submission of relevant documents. Once the documents are verified, the claim amount is released post all due diligence.

Household expenses rise with age. The cost of children's education increases along with other lifestyle expenses. The iSelect term plan offers an option to increase the cover according to the life stage. If opted, the insurance cover increases by 25% at every 5-year terminal till the 20th policy year.

Even though a life insurance policy is bought to protect your family in your absence, there are chances of the claim being rejected due to several factors.

False information: If the policyholder provides false information or conceals important information while buying the life insurance policy, the insurer has the right to reject the claim after his/her death.

Type of death: Deaths due to suicide in first policy year, intoxication or pre-existing disease is not covered under life insurance plan.

Premium payment: The payment of premiums on time is of utmost important to avail the benefits of life insurance. Life insurance policy may lapse on the failure to pay the premiums

Nominee details: A life insurance company can put the claim on hold if the nominee details have not been filled or not been updated by the policyholder.

Suicide: If the life insured commits suicide within 12 months of buying the life insurance policy, the insurance companies generally pay 80% of the total premiums paid.

Buying the best life insurance plan online is not only safe but a better option. Online life insurance policies have lower premiums and the individual is not required to visit the insurer's branch or a bank. The best life insurance policies online insurance offer higher benefits. Customers should, however, buy online life insurance policies only from credible insurers and should check for SSL certificate on the website to ensure that the website is legitimate.

The cost of life insurance policies varies depending on factors like age, gender and occupation. The average cost of life insurance plans, especially term plans, is very low compared to the amount of coverage offered.

An individual is allowed to have multiple life insurance policies. People opt for more than one life insurance policy to increase the cover or avoid claim rejection. In case of multiple life insurance policies, even if the claim is rejected by one insurer, the beneficiaries may receive the benefit from a different insurer.

Life insurance policies are of different types. In case of unit-linked or endowment policies the policyholder receives the maturity benefit at the end of the policy term. However, in the case of term insurance plans, there are no maturity benefits. The death benefit is only paid out after the death of the life insured.

When you buy a life insurance policy, the insurance company asks for the nominee details. Only the person named as the nominee in the life insurance plan can cash out in case of death of life insured.

A life insurance policy is generally taken for a specified period. After the policy duration of a term plan gets over, the policy simply terminates and ceases to exist. However, in case of unit-linked plans or endowment, you can use the policy as a tool for retirement planning and the accumulated corpus is used by the insurer to pay you monthly amounts for your entire life.

If a policyholder purchases a term plan for 25 years and dies during the policy term, the beneficiary receives the death benefit. In case of iSelect term plan, the policy provides four payment options to the beneficiaries. If the regular payment option is chosen, the policy works as a source of regular income.

It is a popular misconception that life insurance plans are only for accidental deaths. A term life insurance plan like iSelect Smart360 Term Plan also covers terminal disease along with death. A terminal illness cover is important as health insurance pays only for the cost of treatment and hospitalization, but a terminal illness cover pays you a lump-sum amount which takes care of other expenses. On the other hand, unit-linked policies such as Invest 4G cover death and also provide decent returns for other financial goals such as buying a house of child's education.

It is ideal to buy a life insurance plan in your early 20s because it is the time when people have just started with their professional life and so there are lesser responsibilities and financial liabilities to take care of. Also, if you buy the best life insurance plan at this age, you will be paying relatively lower insurance premiums since it’s a due fact that mortality rate in case of young people is low. And that is why life insurance companies offer lesser premium rates to younger people as they think that they are most likely to be fit and healthier with less chances of filing a claim in future.

Once you have cancelled your life insurance policy, you will instantly lose your life insurance cover. Afterwards, your insurance company will get in touch with you and ask for valid reasons regarding the cancellation of your policy. In case you cancel your life insurance policy within the grace period, i.e. 15 to 30 days, depending on your insurer, then insurance company will reimburse the premium amount paid by you. But, no refunds will be paid to you if the policy is cancelled after the grace period.

Yes, you can take life insurance under Married Women’s Property (MWP) Act, 1984 only if you are a married man and a resident of India. Buying a life insurance plan under MWP Act would be helpful in saving your family’s financial well-being when you are not around. As per this policy, only wife and children would be eligible to receive the death benefits. You can also buy a policy if you are a widower or a divorcee. However, in that case, you can give your child’s name as your beneficiary. It is very simple to buy a life plan under MWP Act. All you need to do is to fill up an MWP addendum while purchasing an insurance policy.

Yes, there are different payment options for you to pay premiums. Here’re some of them

    1. Regular premium payment option – This premium payment option allows you to pay premiums equal to your policy term either monthly, quarterly, half yearly or annually.

    2. Single payment option – Through this premium payment option, you can pay the lump-sum amount in one single payment.

    3. Limited payment option -In this premium payment option, you can pay premiums for a specific period of time less than policy term either monthly, quarterly, half yearly or annually, but benefits of insurance can be enjoyed for a longer period of time.

Call BackCall Back Pay PremiumPay Premium