September 25, 2010 11:44 am
Is there any good Child Insurance Plan for her/his future education from LIC or any other companies?
There are two types of CHILD PLANs, one is ULIP and another one is TRADITIONAL/NON-MARKET LINKED…If you are risk averse type of investor, you can select a traditioinal child plan wherein you will be guaranteed of X amount at the end of the policy term with Y amount as per the bonuses declared by the company..and you can also look the option of ULIP CHILD PLAN where you can expect decent returns (Sometimes as favorable as MF because there are plenty of ULIP funds giving return of 20% to 22% since inception for last 5-6 years; for eg; MULTIPLIER fund of ICICI PRUDENTIAL and AGGRESIVE GROWTH fund of KOTAK)..You will also be getting a PREMIUM WAIVER OPTION wherein if something happens to the father, policy will continue and the remaining premium will be paid by the company (This facility is not avilable in investments through MF)..
NEVER BUY INSURANCE in the name of your kid. Always take term insurance so that in case anything goes wrong to you, the kid will be financially secured.
I dont understand why people always say I need a insurance for my Daughter or for my Retirement or many more…….
Basic Question is why is Insurance required?
answer is Insurance is needed when Somethimg goes wrong with ur life & ur family got Compensated in the absance of U. that is called Term Plan which is very cheap in terms of amount & it is not an Investment it is the xpence only.
dont misunderstand with investment & Insurance.Insurance is only a expence nor Investment .
so why we need to take a specific policy for daughter or Son
One post you might want to look at is this : http://blog.investraction.com/2009/04/ulips-versus-termplaninvestment-winner.html
It shows you comparision of ULIP with term + MF .
Child plans are more beautified ULIP;s which adds some features to it to look more appealing ,its good to hear , but not the best for your pocket .
I pay my heartiest gratitue to all who have given answer to my query. This forum is really helpful to the members.
Agree with rakesh. go for good mutual funds and dont forget to cover yourself with sufficient term insurance
I like these 2 plans.
State bank of India life insurance (SBI Life) Unit Plus Super & IDBI federal wealthassurance plan.
Just take the Premium of Premium Waiver (PWB) rider with this plan. The benefit for that is if the proposer (generally father) dies in between the policy term, all the further premiums will be paid by the insurance company; thus putting no liability of survivor spouse.
The target of child education / marriage becomes guaranteed in that case.
Get more details about SBI life plan at
Hope it will help you.
Don’t go for any child insurance plans. They are mostly ULIPS and charges are too high.
Instead select 4-5 good equity mutual funds and continue to SIP for 10-15 years. You will definetely see good returns. Make sure to monitor them every 6 months. If the returns of any of the funds is not good over 2-3 quarter switch it to other fund.
Term insurance with SIP in good equity diversified mutual funds is surely a better choice. The only “drawback” in this strategy is that generally investors stop their SIP when they see all red on dalal street. Also, whenever they need of any money, they eye on their mutual fund investments as that does not have any lock-in period.
In case of ULIP – child plan, you will not stop paying premium in any market situation. Also, you can withdraw any money out of that as that goes in lock-in period till your child attains the age 18.
Ask yourself, if you’re a disciplined investor, go for term insurance + mutual funds. Otherwise, go for ULIP. You need to pay some charges in ULIP to become discipline investor.
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