It is a basic duty of every parent to ensure the future life of their children in a secure way. At present many parents are thinking about investing for their child’s future benefits & it is the right ways also. But the main query every single parents are having is what's the best long-term investment plan for children?
Let us discuss about the possibilities & get a fair view regarding this matter by examining top best long term
Investment plan for children.
INSURANCE PLANS including ULIP :
The first thing gets in mind while considering a child’s future investment is insurance. There are many insurance companies who will offer you to invest in “child plan”, which is merely a ULIP [unit-linked insurance plans]. You will be feeling secure by thinking that this child plan will cover your child’s life as well as providing assured amount plus bonus for future education & expenses. It is because that these plans not only give you proper risk coverage but also it provides enough tax advantage. The main advantages are given by a child insurance policies are:
1) The claims are only made out for the children.
2) Provides secure & committed returns through out the policy period.
3) Final claims are made only at the determined date.
4) The risk cover is provided under the child plan policy, so dual beneficial for the children as it provides enough flexibility regarding withdrawal of funds.
However some people advised that these child plans are not good enough for making an investment as because of the premiums are quite high. It is narrated that 30% of your premiums goes under fulfilling costs along with the commission of the agents & only 70% of premium amount gets in Insurance Plans. Thus many people prefer Mutual Funds rather than child insurance.
INVESTING IN CHILD MUTUAL FUNDS:
Another proper answer of the question “what's the best long-term investment plan for children?” is Mutual funds. There are several Mutual fund schemes to serve your risk, you need to chose the best one with combined plan of equity investment & debt. It is a wise decision to go for a children mutual fund scheme which can provide both high growth & diversified equity funds in the long term basis.
The main advantages are:
1) A proper identification of the child as a investor.
2) Much lower expenses than the other mutual fund plans.
3) Tax advantage as it will be charged only at the time of maturity.
