Investing: Child’s play? Almost

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Child Education Plans  
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Investing Childs play? Almost
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Are you one of those parents who are uncertain
about what the best way is to save for your Child
Education Plans  or marriage? While you are
aware about the various investment options
available, you dont really understand the
risk-return proposition that these products
offer? You have been told that child insurance
plans are a good investment for long-term, but
alternative investments like mutual funds give
far better returns than the former? Lets look
at what child insurance plans have to offer
vis-à-vis alternative investments like mutual
funds, PPF and understand the pros and cons of
choosing either of them.
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What are child plans Child insurance plans are
basically insurance-cum-investment products whose
objective is to secure your childs future even
when you are no longer around. There are many
benefits associated with such plans. First,
child plans provide a cover on death and help you
save and plan for the childrens future expenses
for education and marriage.
Typically in such cases, the premiums for the
rest of the term are borne by the insurance
company.
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This feature is called the waiver of premium. On
the maturity of the policy, the maturity value is
paid to the child. Therefore, the payout happens
twice after the death of the parent and at the
time of plan maturity.
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For starters, child plans can either be
traditional plans or they can be market-linked
plans, also known as child unit-linked insurance
plans (Ulips). Traditional or endowment plans,
which only invest in debts, are usually more apt
for conservative policyholders.Child ulips
invest primarily in equities, offering you higher
fund value than traditional plans. You can choose
any of the two options and even switch between
the two, when your risk appetite changes. Should
you buy? This is the dilemma most parents face.
Are they really worth it, given that there is an
alternate path to secure your childs future
financial needs where you can separate investment
and insurance by investing in mutual funds or PPF
and buying a term policy?
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Find out more information on Child Education
Plans https//www.bajajallianz.com/Corp/child-in
surance-plans/child-insurance-plans.jsp
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