There are many child plans in the market and each claims to be better than the other. In this scenario choosing a child plan can be a confusing job. Here are some important points which must be considered before choosing one for your child :
1. Chose a child plan only when your term of investment is at least 10 years otherwise the returns will be lower.
2. Make sure that insurance cover is on the parent and not on the child. Plans which have insurance cover on the child must be avoided.
3. Your plan must include ' Waiver of Premium ' benefit. ' WoP ' or ' Waiver of Premium ' means that in case of death of the parent all future premium payments will be discontinued but the maturity value will be paid out as decided by the parent.
4. If the parent does not wish to have an insurance cover then child mutual funds must be considered. Also note that unlike ULIPs returns on mutual funds are tax free if invested for long term ( more than 1 year ).
Read - Child Mutual Fund Vs Child ULIP
1. Chose a child plan only when your term of investment is at least 10 years otherwise the returns will be lower.
2. Make sure that insurance cover is on the parent and not on the child. Plans which have insurance cover on the child must be avoided.
3. Your plan must include ' Waiver of Premium ' benefit. ' WoP ' or ' Waiver of Premium ' means that in case of death of the parent all future premium payments will be discontinued but the maturity value will be paid out as decided by the parent.
4. If the parent does not wish to have an insurance cover then child mutual funds must be considered. Also note that unlike ULIPs returns on mutual funds are tax free if invested for long term ( more than 1 year ).
Read - Child Mutual Fund Vs Child ULIP
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