Remember your daadi [granny] saying: “Hamare zamane main cinema kee ticket 1 rupaye main miltee thee” 

This is precisely the theme of what we are discussing here. How do we all plan for our kid’s future?

Are the expenses for higher education going to keep rising, like it has risen in the last 10 years? How do we beat it? 

Education expenses worldwide are on a rise. Quality Schools are not available in quantity and hence command a high price [of course they employ the best professors too]In the competitive world we are in, everyone wants his child to study in the best school [not in his locality], but in the world. 

Forget going abroad, the cost of admission to get an MBBS degree has skyrocketed 25 times in the last 10 years. 

Benefits:

These policies provide Death Benefit except HDFC which provides 2 options – option (1) Death Benefit option (2) Critical illness benefit. 

In the unfortunate event of death of parent (Life assured), in ICICI, Birla and HDFC the plan will make a lump sum payment of Sum Assured to the nominee and the policy will continue, with the insurance company contributing future premiums till maturity. On Death, In Kotak, the company will pay the sum assured plus the unpaid premiums to the customer. This is a negative, as the main purpose of the plan is defeated when the entire fund is released on an uncertain date. 

Costs:Coming to the charges of each fund, Birla has the lowest allocation charges, but the very high policy administration charges compensate for the same. On a fair basis ICICI Smart Kid has the lowest allocation charges of 20% in the first year compared to the other products being reviewed. HDFC’s charges are the most obscene at 60% of the first year premium, which is a sure negative for most of us.  

If the allocation charges are simply added for a 10 year period, the following would be the total charges: 

ICICI                : 48 %

HDFC                : 69 %

Birla                 : No charges

Kotak               : 49 %  

Premium Allocation Charges means company is going to deduct some portion from your premium every year. This helps the company pay commission to the agents and also takes care of overheads.A higher allocation charge provides a higher commission to your agent/broker, so beware if your broker is being very forceful on a certain product. (Allocation charges explained– if prem. Allocation charge is 30% for the 1^st yr. & 2% for the 2^nd yr & onwards. If your prem. Is 50000, then only 35000 less other charges will be allocating as your fund value in the 1^st yr. & so on as per 2^nd yrs & onward charges) 

ICICI    : 48 %

HDFC    : 69 %

Birla     : No charges shown.

Kotak   : 49 % (approx. in 10 yrs.) 

Administration charge:

Administration charges are moderate in all companies.

CONCLUSION From our scrutiny we would recommend Birla Child Dream Plan Kid as a cost effective and efficient investment for your kiddo. Though the allocation charges are not transparent, when you take an illustration and compare, you will find that Birla gives the maximum lead.  FInally it depends upon the no. of years you invest + what kind of features you want + your risk appetite.

We liked the transparent brochure and comparatively fair and lower charges in the plan.

To get more information on the child plan specific to your requirements, please put us an email to inquiries@insurancemall.in