In this plan there are endowment and money-back policies available. In an endowment policy you have to make a payment for the premium amount yearly and at the end of the policy tenure you get back a huge amount. These are your sum assured and bonuses. As this plan invests in debt market the returns are low.

A money back policy is designed in such a way that you make annual premiums and at various intervals you get some amount back so you can provide for your child’s needs at different stages. These payouts are already decided or in built in the policy, so you cannot fix the period or amount. This kind of policy also invests your funds in debt markets.

ULIP:

 You can choose from various funds like equity or debt funds and even a mix of both. This plan gives you better returns as the funds are market linked. You also have a choice of switching between funds and choosing your portfolio depending on the risk one can take. You can choose at what age you what funds for your child’s needs.

Hence before investing in an insurance policy for your child take a look at all the policies available in the market. As in traditional endowment plans the returns given are annually based on the bonuses declared by the company. If you cannot afford to take a high risk an endowment policy is the best.