Why you must have a child investment plan

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• Child Investment Plans

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Why You Must Have a Child Investment Plan 
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The rising cost of education is troubling Indian
parents. More than 60 of the respondents in an
online survey by ET Wealth listed this as their
biggest worry. This was followed by lack of
knowledge, not saving enough and starting too
late. We hadn't included the biggest worry-the
risk of their own untimely death-as a choice.
We should have. According to the National Crime
Records Bureau statistics, an Indian dies in an
accident every 90 seconds. 
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It's a terrifying thought for any parent-leaving
his family without adequate means to lead a
comfortable life. The only way to get over this
worry is to take a sizeable life insurance cover.
Financial planners swear by term plans, arguing
that these policies are the best way to cover the
risk of early death. They certainly are because
they offer a high cover at a low cost and give
out a lump-sum amount to the nominee if the
policyholder dies. But the policy ends right
there.  On the other hand, a child investment
plans offers a lump-sum payment on the death of
the policyholder, but the policy does not end.
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All future premiums are waived and the insurance
company continues investing this money on behalf
of the policyholder.  The child gets the money
at specified intervals as planned under the
policy. In this way, the parent ensures that
his child's needs are taken care of even if he is
not around. Almost all life insurance firms have
child plans in their portfolio of offerings.
Some of these are market-linked policies, which
allow policyholders to invest in equities and
debt, while others are traditional plans, which
invest only in debt.
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• child plan is eligible for tax deduction under
  Section 80C, while any income from the plan is
  tax-free under Section 10 (10D). Critics of
  child plans argue that these policies come at a
  very high cost compared to a simple term plan.
• They say that instead of allocating a huge sum as
  premium to a child plan, a parent can buy a term
  plan of the same amount for himself and invest
  the balance money in mutual funds. On maturity,
  he will have a bigger corpus 
• Source http//economictimes.indiatimes.com/wealt
  h/insurance/analysis/why-you-must-have-a-child-ins
  urance-plan/articleshow/30943498.cms
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