The Cost of Raising a Child AKA Why You Need Life Insurance

July 21, 2021

Experiencing fatherhood has always been awesome, but it brings responsibilities as well. There is a huge cost involved in raising a child to 21 years of age. According to a study conducted by ET Wealth, it will cost around Rs 54.75 Lacs to raise a child.

Here is the breakdown of the cost associated after having a child.


Before you have a baby, you and your partner feel comfortable in a one bedroom flat. After having a baby, you feel a need to move into a bigger, more spacious apartment. Housing accounts for one of the major expenses that increase after having a child. If believe on estimates, it accounts for 19% of spending for raising the child.


A major portion of your total spending goes in education of your child. Parents always like to give his child the best-in class quality education. Most of the children are studying in private schools, the most of them charge high fees. Moreover, the cost of education keeps on increasing every year and that’s why, a family has to spend 46% of total spending on education for raising a child.


Fun and entertainment is the life of kids. Considering the cost involved in the entertainment of your child such as toys, movie outings, internet, family vacations, etc. account for huge spend. Entertainment for kids account for 12% of total spending for raising a child.

There are several other expenses that incur towards raising your child. A total of 23% is spent on expenses such as clothing (6%), transportation (5%), food (5%), healthcare (4%), and other miscellaneous expenses (3%).

Don’t forget to mention the inflation factor that leads to increase in the cost for upbringing of your child. There were the times, when kids were satisfied watching doordarshan. But now, the modern day kid demands for more and you have to make arrangement for expensive sources of entertainment such as kids channels, high-tech toys, games, etc. that increase the spend to raise your child.

Considering all these factors in mind, the cost of raising a child is astounding and parents make all efforts to ensure their children will fulfill their desires and aspirations.

But, if something unfortunate happens to you, your family may not be able to meet the cost of raising the child. Here, life insurance plays a pivotal role. With a life Insurance policy, your nominee/beneficiary will receive the sum assured amount as a lumpsum in the event of your unfortunate demise. So, having an appropriate life cover ensures you a peace of mind.

Suppose, at 30 years of age, you buy a Max Life online term plan plus with a life cover of Rs 1 crore for 25 years of policy term. The insurer will charge you an annualized premium of Rs 6400.

It is a small price you need to pay that covers financial expenses for upbringing of your child, even when you are not around. With this life cover, your spouse can easily cover the cost of raising a child i.e., Rs 54.75 Lacs and the remaining amunt of Rs 45.25 Lacs can be used to fulfill other recurring expenses of your family, such as paying off loans, child’s marriage expenses, etc. It thus ensures a complete cover for your family.


No doubt, cost involved in raising the child is extremely mammoth and you need to make a robust financial planning, so your child’s future is not at all compromised. It becomes vital to buy a life insurance policy with an appropriate coverage that can help your family to easily cover the cost of raising the child.

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