Dear Sir I have taken TATA AIG's Star Kids policy, annual premium is Rs 50K applicable for 10 year. Is it a good policy to have or can I look at other instrument such as PPF for my kid. This is a regular insurance plan and not linked to MF. Also there is a substantial loss if we preclose anytime before 6 - 7 years. Pl. advaice
1 Answers
There is no insurance plan which is good for children future.
You need investment plans and not insurance plans to make a good sum after 15-20 years. Such insurance plans can only provide 5-6% returns.
You need to get 10-12% return to best utilize your investments and beat inflation. Even PPF would give you maximum 8-9% returns.
Best would be to invest into a mix of Equity diversified mutual funds, PPF/NPS and somewhat gold ETFs.
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