How ULIPs Can Help You Save for Your Child's Future?

There is no bigger deal in financial investments than securing a child’s future. An investment plan is necessary for your child’s needs, like education, marriage, or career goals. A child insurance plan is a reliable financial model for your child’s interests. This article is a take on the concept of how ULIPs can help your child achieve their future goals. Different ULIP child plans are in discussion in the post. It also covers the features & benefits of such plans and the investment process.

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Investing in your child's future:A wise decision & a loving choice
  • Insurer pays premium in case of loss of life of parent

  • Create wealth for child’s aspirations

  • Tax Free maturity amount+

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  • Insurer pays premium in case of loss of life of parent

  • Create wealth for child’s aspirations

  • Tax Free maturity amount+

  • 12+ plans available

Nothing Is More Important Than Securing Your Child's Future

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What are ULIPS?

The concept of ULIP combines the factors of insurance and investment. ULIPs or Unit Linked Insurance Plans work where the policyholders have to pay regular premiums. A part of this premium comes under life insurance coverage. The rest of the amount is invested in the mutual fund schemes. Their coverage involves financial instruments like equity & debt. 

A ULIP supports you in growing wealth and secures you against financial emergencies simultaneously. ULIP based child plans help you protect your child’s financial needs. You make the premium payments like with a regular insurance policy. In case of unforeseen eventualities before the plan expiry, your child will receive a lump sum amount.

Unit Linked Insurance Plans find great scope in the insurance domain & the finance sector. ULIP child plans find extensive application in the strategic investment processes as well.

How Can ULIPs Help You Save for Your Child's Future?

ULIPs can help your child’s future in the following ways:

  • Some ULIPs offer a unique triple benefit plan. It is part of the death benefits of the policy. Here, in the situation of a parent’s death during the policy term, the insurer pays the future premiums on the child’s behalf. They will also provide a monthly amount to the family to provide for the child’s education. Additionally, the family/child receives a lump sum amount from the policy issuer. The three-pronged benefit is easy to understand. As a death benefit for the nominee child, the insurer will provide maturity benefits and premium waivers with the agreed lump sum amount.

  • The premium payments are available in different modes like monthly, quarterly, half-yearly, and yearly options. It offers you the flexibility to manage the current financial status as well.

  • You get to decide the maturity benefit with the vision you want for your child’s future.

  • The policy tenure can be from birth to when the child reaches a predefined age. It ensures financial security for the most vulnerable stage of a person’s life regarding finance.

  • Rider benefits are available on Child ULIP PlThe riders could be in critical illness, premium waiver, or accidental death. \

  • There could be a partial withdrawal clause. It helps you to withdraw an amount during a financial emergency.

  • ULIPs provide the choice of picking your investment type. It could be debt, equity, hybrid, or money market policies.

  • The feature of segmented payouts is available in Child ULIP plans as well.

  • The dispersal of funds is flexible. It helps the child to have financial security at all times.

  • The premium payment options are hassle-free. It enables your child to have a good time now as well.

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How to Invest in a ULIP Based Child Plan?

Before learning about the investment process, you should know a few pointers that help you with the ULIP child plans:

  • The most crucial thing is to start your investment early. If you can start investing as soon as your child is born, it gives you the maximum period until maturity to receive the insurance benefits.

  • The investment vision is long for any child insurance plan. Consider multiple economic variables like inflation, cost of living, rising living standards, education expenses, future career goals of your child, etc. Invest accordingly.

  • Irrespective of the policy you invest in, the terms and conditions should be clear to you. It will help you form an insight into the long-term investment plan.

  • Be aware of the benefits and features associated with the specific policy you purchase.

Now that you know about the investment factors, you can invest in a ULIP based child plan. You can select the ULIP policy as per your child’s financial goals and the pre-research criteria. Choose an adequate insurance coverage amount, the type of premium payable by you, and understand the issuer terms & conditions. Once the agreement is completed, you can start paying the premiums and secure your child’s financial future.

In Conclusion

Having an insurance plan securely in place is the best gift you can provide to your child. A child ULIP works with multiple benefits. You can guarantee the financial safety of your child if you timely invest in a ULIP. The only thing that you should ensure is to find the right suitable plan.

FAQ's

  • How can I purchase a ULIP child plan?

    You can purchase the plan online or offline. To buy it online, visit the website of the specific policy issuer you are planning to purchase the policy. For offline mode, you can visit the nearest branch of your preferred insurer, or you can connect with insurance agents.
  • How much amount should I invest in a ULIP child plan?

    It purely depends on the financial goals you have in your plan for your child. If you start early with the investment, you will receive enough time to register a premium balance. You can also rely on the potential career aspirations of your child to invest in ULIPs.
  • Is it possible to switch the fund before the policy maturity term?

    ULIPs offer the option to switch between your portfolio funds. It could be equity, debt, etc. The relevant thing is you have to clarify this information with your insurance provider before investing in the particular child plan.
  • How can I find the best ULIP plan for my child?

    There is no single best ULIP plan for your child. Make a list of your financial goals and search for a plan that satisfies those conditions. Always contact your financial advisors to make the right decision regarding this.
  • Is there a lock-in period for the ULIP child plan?

    A five-year period is usually the lock-in period for ULIP plTalk to your policy issuer about their specific terms regarding the lock-in period.

*All savings are provided by the insurer as per the IRDAI approved insurance plan.
*Tax benefit is subject to changes in tax laws. Standard T&C Apply
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
#The lumpsum benefit is calculated if policyholder invested ₹10000 monthly for 10 years in the fund with a policy term of 20 years. This Point To Point past performance data of last 10 years has been used to illustrate a scenario for the customers benefit. It is assumed that the past 10 years returns would have also been delivered in last 20 years. This is not guaranteed and not in anyway indicative of what the customer may actually get 20 years from now. The investment is subject to market risk and the risk is borne by the policyholder.
+Returns Since Inception of LIC Growth Fund
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.

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