A suitable plan for a new born child?

Dear Mr Tan,

I'll like to buy some insurance for my son to save for his education. Which one would you recommend? Living or Education or investment linked products such as Ideal Plan?The return for education products are not so attractive but investment linked products carries a risk. My son is 1 mth old.

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My reply:

I recommend an investment linked plan. If you are investing for 20 years, the risk will average out, and you should be able to get an attractive return, which is better than an education plan (life insurance policy).

There is the risk that the stockmarket may be at a low point at the time that you need to draw out the money. In that case, you can draw out in installments over three years or wait for a better time. You do not need to take out all of the funds at one time.

Because you have the flexibility to choose the right time to realise your investment, you can turn "risk to your advantage".

Read about it in this FAQ

Ideal plan for a child