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A Beginner’s Guide to Choosing the Perfect Child Plan

5. Choosing the Perfect Child Plan
Now with the full knowledge of the cost of education at present and future, time period, inflation rate, and the final expected returns, selecting the right investment plan is important. Child investment plans can help in prudent financial planning for a child. A child plan is a ULIP based investment cum insurance plan that ensures a secure future for your child. Along with maturity benefit it offers you the benefit of life cover. Moreover, a child savings plan equips your child for a variety of milestone needs and, if chosen well, have the ability to ensure that your child’s future goals are achieved smoothly, with next to no hiccups. Additionally, it makes sure that unforeseen and untoward events do not derail your child’s life.

However, with a variety of child saving plans available in the market today, it can get tough to choose a perfect plan that best suits your child’s needs.
The tips given below will help you make an informed decision in choosing the right plan for your child.
• Invest in A Plan That Offers Premium Waiver Benefit
Most child investment plans offer premium waiver benefit, either as an essential feature of the plan or as an option. This benefit is particularly significant as in case of the parent’s demise; the insurance company waives off future premiums while continuing to fund the plan till maturity. This basically makes sure that the maturity benefit that was set for your child’s future remains intact as planned.

• Opt for An Adequate Cover
You can never know exactly how much your child will need for his/her education and other goals in the future. You can avoid this uncertainty by having a child education plan with an adequate cover so that you have enough to pay for your child’s college and other future needs without having to worry about the same constantly.

• Choose A Plan as Per Your Risk Appetite
You can pick the right child saving plan depending on your overall risk profile. For instance, if you have a high-risk appetite, insurers like Max Life Insurance provide an option to invest in high-risk equity funds in ULIPs. Opting for equity funds can help you achieve higher returns in the long run. However, if you have moderate to low-risk appetite, you can opt for balanced or debt funds. Further, child investment plans, specifically ULIPs, always give you an option to make switches from equity to debt and vice-versa. Choose a plan that offers this flexibility.


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ParentEdge is a bi-monthly magazine for discerning Indian parents who would like to actively contribute to their children’s education, intellectual enrichment and stimulation. The magazine’s premise is that learning is a continuous process, and needs to happen both in and outside of school; thus parents have an important role to play in shaping their children’s interests and intellect.

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