By Tensing Rodrigues
I am a working middle class woman and want to invest for my one-year-old daughter; kindly suggest some good investments. I would also like to know about the best life insurance plan for her, which includes health insurance along with money back investment.

Also, let me know if one time investment - half yearly or yearly - is good or monthly investment is good.
— Prajakta Desai
Congratulations for having thought about the financial future of your daughter so early; your investment will go a long way. Let us divide your need into three parts:
A saving plan to ensure the availability of a certain sum of money when your daughter reaches a certain age.
To make sure that this saving plan is not affected by any adverse happening to you (death or critical illness).
To provide for any medical expenses that you may require incurring for your daughter.
Putting the first and second need together, the best option for you would be to go for a ULIP. The ULIP must have two riders: the waiver of premium rider and Critical Illness (CI) rider. The first rider (WOP rider) will ensure that in case of an adverse happening, the insurance company will begin paying the premium on your behalf, and your child will get the targeted sum on maturity. The second rider (CI rider) will ensure that this happens not just on your death but also on your being diagnosed having a CI. This is important because a CI is as devastating as, perhaps more than, death. If possible you can buy an ULIP that does not pay SA on occurrence of the adverse event, but only triggers payment of premia by the company. This will keep your risk premium low.
The monthly premium should be equal to what you would like to save every month. This amount you can arrive at based on what sum you want to be available to your daughter in future; and, of course, how much you can save every month. For instance if you want ` 10,00,000 to be available to your daughter when she is 18, and you expect to earn a return of 10 per cent per annum, then you will have to pay a monthly premium of about ` 1,870. The ULIP should mature when your daughter is 18, so that the targeted sum is available to her then. Since the term of your plan is fairly long, opt for a fund for your ULIP where the money is invested in equities; over such a long period, equity is safe enough. Some funds provide freedom to the fund manager to vary the exposure to the equities depending on the market situation; this would be a better option. As for the last part of your query, it is always good to opt for a monthly premium than a yearly, half yearly or quarterly premium, when you are investing in equity. This gives you an opportunity to enter the market at different levels, thus reducing the short term risk from market volatility. Very important, the ULIP should be on your life, not the child’s.
It is better not to mix health insurance with life insurance. Buy a small health insurance policy for your daughter which covers normal expenditure on hospitalisation and medicines. Do not buy a very big policy; I feel even one lakh will be good enough. As NCB accumulates, this cover will grow; if necessary you can add to it as well.