We have seen a slew of Child Plans launches last few years. All these plans try to market the product , reminding the parents of their obligation to provide their kids with the best of education and about the expenses involved for the marriage .
Are these products really worth buying
Most of the child plan in the market are a combination of An insurance cover for the parent , with child as the nominee , along with this the promise to invest the rest of the money in equity,debt or some other asset class .
What i find surprising is that, these child plans would have atleast about 2% of recurring charges , along with some premature charge of about 2% .
If you see closely , it is possible for a Individual Investor to form this bouquet of investment on his own from the products available in the market .
Individual Investor with little bit of discipline can form a bouquet of
- Term Insurance Plan ( buy policy online here or compare policies here)
- SIP in a combination of Balanced Fund and Diversified Equity Fund ( Get the best rated MFs here )
- Buy some amount of Gold ( ETFs, know more here )
- Reduced charges
- Flexibility to move to some other funds, if the performance of your invested fund does not lives up to the mark.
- Encash the investment whenever the child needs the money .
Have some discipline , avoid packaged child plans and form the child plan bouquet yourself .I'm sure you would find that planning for your child, sure is child's play .
Image : FreeDigitalPhotos.net,Photographer: Admin
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