Factors That Affects The Cost Of Child Plans
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With a child plan, a child’s needs are taken care of even if the parents are not around. These plans offer guaranteed payouts for financing the child’s education and hobbies so they can lead a comfortable life ahead. Child plans are known to offer greater returns when compared to traditional investment avenues such as PPFs or FDs. That said, choosing a suitable child plan is not easy.
Considerations When Buying A Child Plan
Here are some things you should consider before buying a child plan;
1. Starting early with these kinds of investments secures the future of the child from early on. These plans usually have a long horizon to invest in, which helps investors periodically build their wealth. Hence, according to experts, choose a plan that encourages long-term investment.
2. Opt for a plan that suits your child’s needs and goals, as the goals and ambitions of every child are unique. This way, experts say you will have the proper financial planning in place to help your child fulfil their dreams.
3. For investors with a high-risk appetite, equity-linked plans are the ideal option with a considerable time frame of at least 10 years or more. This way your investment will grow, as long-term equities tend to give good returns in the long run. Also, see to it that the child plan has a balanced mix of both debt and growth funds along with risk cover.
4. For investors with a low-risk appetite, endowment plans could be opted for. If you do not like taking a risk on your investments, endowment plans will not only give cover but also ensure protection against volatile market conditions.
Conclusion
Before opting for a child insurance plan, you need to consider a range of events for the child such as their schooling, higher studies, hobbies, sports, etc. and make provisions for them. There are various options to choose from while opting for a child plan. Multiple insurance companies have been offering child plans. However, note that some of these plans are market-linked policies that allow policyholders to invest in both debt and equities. There are also traditional plans that invest the investors’ premium only in debt funds.
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