Are you concerned about financially securing your child’s future for goals like marriage and higher education? It may sound like a daunting task, but with right investment and planning you can achieve these financial goals.
Often the availability of too many schemes and plans add to our confusion and we find it challenging, but if you do your research and know your goals, it is easier to filter out the best product that suits your child’s needs. Additionally, it is essential to assess your financial goals, risk appetite, and investment horizon before deciding between a child plan and mutual funds. Schemes must be selected after considering aspects such as risk, return, flexibility in investment and redemption, tax efficiency, etc.
Some of the products like child insurance plans and mutual fund schemes are tailored to meet child-related financial goals. Should you consider them? What’s the better option for you: Child plans or mutual funds? Let’s compare both these options to help you make an informed investment decision.
Insurance companies offer two types of child insurance products, i.e., child endowment plan and child unit linked insurance plan (Ulip). The child endowment plan is a traditional policy with the option to get assured returns on maturity along with life risk cover for the parents. Such plans carry a very low risk and the return is also low. On the other hand, Ulips are market-linked plans and usually the return is higher than that of the traditional plan.
A child insurance plan constitutes two aspects – one, insurance, and two, investments. The child plan ensures financial protection to the child if the parents meet with an untimely death. Due to the involvement of the life cover benefit, a substantial
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