INTERVIEW QUESTIONS INSURANCE ENDOWMENT PLANS DETAILS

Question: Which is a better option to invest in child insurance policy? ULIP or Endowment?

Answer: Insurance is usually taken against a person who is the earning member of the family. The reason is that if something happens to the earning member of the family, the dependents can survive with the insurance money.

Taking insurance for child is not right. What you are looking for is investment for your child so that when he or she grows and is ready to go to college, you can fund education. For this, you need to invest and not insure.

There are good mutual funds where you can start investing in SIP mode. Mutual funds are mainly for three types, equity, hybrid, and debt funds. Equity funds are risky but perform well in long term. Debt funds are low risk investment and can provide you an annual return of about 7% to 10% over the term. Hybrid funds are mixture of debt and equity.

Even after this, if you want to go for insurance, endowment policy will be better than the ULIP. ULIP is generally riskier than endowment policy.

Insurance is usually taken against a person who is the earning member of the family. The reason is that if something happens to the earning member of the family, the dependents can survive with the insurance money.

Taking insurance for child is not right. What you are looking for is investment for your child so that when he or she grows and is ready to go to college, you can fund education. For this, you need to invest and not insure.

There are good mutual funds where you can start investing in SIP mode. Mutual funds are mainly for three types, equity, hybrid, and debt funds. Equity funds are risky but perform well in long term. Debt funds are low risk investment and can provide you an annual return of about 7% to 10% over the term. Hybrid funds are mixture of debt and equity.

Even after this, if you want to go for insurance, endowment policy will be better than the ULIP. ULIP is generally riskier than endowment policy. Source: CoolInterview.com

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