Khota Paisa

Update : Which Child Plan? A Comparison of ULIP based Child Plans

Posted in Child Insurance by khotapaisa on July 17, 2009

Last time I did a comparative study of ULIP based child plan I considered only three plans. I got a lot of response asking me to consider other plans in market as well. So, I started a comparative study of all child plans I could come across. Well, a lot of things have changed since my last analysis.
Here is the result of my analysis. The calculations are based on annual premium of 25000/- for 18 years. For plan which don’t have 18 years policy period, the fund value is adjusted to 18 years.

Though the three child plans analysed in the last post remain competitive, we have a new entry in top three.

child plan new

Note :
This analysis only shows the cost of the ULIP plan. While selecting a ULIP, you should also consider various other aspects like insurance plan features, fund performance etc.

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17 Responses

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  1. Ajay said, on November 27, 2009 at 12:01 am

    Have you seen Birla Sunlife Child plan? I was being recommended this over HDFC and ICICI and was wondering what your take was

    • khotapaisa said, on November 27, 2009 at 10:35 am

      Hi Ajay,
      I don’t remember if I had considered this plan for comparison. Anyways, I did some calculations for this plan and the cost seems to be low vis-a-vis other child ULIPs, though it was not a detailed calculation. Since the charges in this plan are complex, I could do an exact calculation for you if you can tell me the insurance amount (or premium you want to pay), duration etc. If you actually go for it, go for lowest guaranteed maturity benefit & basic sum assured…use the enhanced sum assured facility.

  2. Praveen said, on December 3, 2009 at 4:51 pm

    I heard LIC plan have better returns at 1:20 return after a period of 20 years.. is that so.

    Its called LIC profit plus.

    Any thoughts.. it wiil be useful.

    • khotapaisa said, on December 3, 2009 at 10:00 pm

      There is no guarantee of return for any ULIP as the return is market linked. So, if you plan to buy an ULIP, you should have other reasons(like low cost) to buy it.

  3. Aristotle said, on December 7, 2009 at 6:19 pm

    Dear sir,
    Please tell me if the recently introduced child plan TATA AIG InvestAssure Superstar is a good plan to take for my child, she is 8 months old now.
    Thank you.
    Aristotle

    • khotapaisa said, on December 7, 2009 at 8:00 pm

      On the cost front, the plan scores average. There are though better options available. In any case, if you do buy this plan, go for Family Guard option & select Top200 fund option. The mortality charges seem to be on lower side so go for maximum sum assured option.
      I hope it helps you.

  4. Dr.Raviraj said, on January 8, 2010 at 5:12 pm

    Hi,

    Kindly suggest me which child policy I have to choose for my Son as he is now 1year old.

    i am very much confused with LIC and other private sector policies I am interested to invest 10000 in a year for policy. sugget me the best policy for next 10 years to cover him

    • khotapaisa said, on January 8, 2010 at 8:23 pm

      Dr Raviraj,
      Since your kid is 1 year old, why would you like to invest only for 10 years? I guess you can invest for at least 15-16 years. You can take a ULIP (any of the ULIP given in the comparison table in the post) for 15 years. I am not sure if 10,000/- per year is sufficient but then don’t worry about it if you can’t invest more now. As your income increases, you can invest more.

  5. Venkat said, on June 6, 2010 at 10:19 pm

    I have two sons 7 and 11 and ia m 44 yrs old. Please let me know which child plans is good for me?
    Also plese tell me which home loan insurance is the best for me as i have a loan of 30 lakhs with bank of baroda.

    • khotapaisa said, on June 10, 2010 at 1:38 pm

      Hi Venkat,
      Sorry for the late response. It’s nice to see that you are planninf for your kids and intend to cover your home loan for protection. For child plan review, you can visit the child insurance section of the blog. For you younger son, you may go for an ULIP. As for you elder son, ULIP is not a good option as he would be needing funds in the next 7-9 years. I would suggest you start putting money in a combination of recurring deposit & balanced fund for your elder son.
      As for the home loan protection, there are many loan protection term plans. You can check out few from LIC, ICICI etc. LIC is generally the costliest one, but then it gives you the peace of mind. So it’s all your call.

  6. Madan Mohan said, on June 10, 2010 at 2:49 pm

    Hi,
    As you will be aware, there is a tug of war between IRDA and SEBI for ULIPs. IRDA is going to change some rules of ULIPs from 1st July,2010. Based on it, Can you please suggest whether I should go for a child ULIP right now or should I wait till 1st July. My birthday falls on 1st July, so mortality charges will be higher for me after that. I have planned to take ICICI Prudential Smartkid maxima. Any comment on this will be also welcome. My child is 3 years old.

    • khotapaisa said, on June 10, 2010 at 6:35 pm

      Hi Madan,
      It’s good to see that you are planning for your child’s education early. As you said, you will be paying higher mortality charges on or after July 1. So, go ahead and get the policy now. Your selection of ULIP is fine. Don’t worry about IRDA-SEBI tussle. New products like ULIP will undergo changes over time. So don’t worry about the scheduled changes.

      • Madan Mohan said, on June 11, 2010 at 8:49 am

        Thank you very much for your suggestion.

  7. Ganesh said, on June 24, 2010 at 12:46 pm

    I would like to gift Rs.1 lac to my 2 yr old grand son who is born in U.S. Pl suggest a suitable plan so that this amount grows thro’ 15 years and benefit him at his age of 18 years. Pl note that this is one time investment only.

    • khotapaisa said, on June 24, 2010 at 11:09 pm

      Dear Mr. Ganesh,
      Your question is actually not as easy to answer as it appears.
      Given your long term requirement, single premium ULIP would be an easy choice. But that doesn’t fit well in your case.
      On the other hand, there is no secure investment (one time) available for 15 years. The only option you have is the single premium LIC child plan (non-ULIP) which would typically give you not more than 4%-5% return.
      Which one to go for? Well, though it would be tempting to suggest a ULIP, I would recommend you go for pure child insurance plan (say from LIC like Jeevan Kishore etc) even though it would offer you low return. At first, this may look like a bad advice (given I am against these kind of insurance plans), but if you consider various factor (applicable in your case), this would come out as a logical choice. But make sure that the proposer of the policy is kid’s mother or father.
      P.S.
      You may as well give the cheque to the kid’s parent and ask them to invest it as they deem fit.

  8. satyanarayana m said, on September 6, 2010 at 3:21 pm

    Sir,
    Please tell me which policy best my 4 yrs daughter. for marriage purpose single premium policy.

    From:
    Satyanarayana M

    • khotapaisa said, on September 6, 2010 at 8:52 pm

      Hi Satyanarayan,
      For single premium policy, I will need to look into the policies. I am sure that you have solid reasons for not selecting regular premium policy. It doesn’t matter whether it’s for marriage or education, you should get a ULIP based child plan.


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