How Child ULIP Plan Can Help You Save For Your Child’s Future

A child completes your life in every way. As a parent, it is the most wonderful experience. You cannot deny the fact that it also means an added financial responsibility. Today, the cost of raising a child is an expensive affair, considering the increasing education costs, tuition fees, marriage, and other expenses.All of this can take a toll on your hard-earned savings, which can lead to financial stress in the long run. It is especially helpful to be ready for the financial obligations by investing in a child insurance plan like the Unit Linked Insurance Plan (ULIP).

• A Unit-Linked Insurance Plan is both an investment and insurance benefits policy.
• Under this plan, a major part of the investment is into equities, and the rest is in debt.
• The premium you pay is partly used for investments, and the balance amount is used for providing an insurance cover.
• As a policyholder, you decide the funds you want to invest based on your risk appetite.
• You also have the flexibility to switch between equity and debt
• The term period ranges from 10 to 15 years because the longer the investment horizon, the more you can reap the benefits as an investor

Saving for your child’s future is a priority for every parent. With inflation increasing at a faster rate, the cost of education and other expenses will take a toll on your finances once your kid grows up. In case your child wants to take up a specialisation course overseas, you would have to consider the education inflation rate, as well as take an estimation of the foreign exchange against the Indian rupee. Thus, it is better to build a corpus that may help a little in contributing to your child’s milestones.Here are some of the ways how ULIP can help you to save your child’s future:

• ULIPs can help you to accumulate the wealth required for securing your child’s future.
• The plan provides a death benefit, wherein your child as a beneficiary will receive a lump sum in case of an unfortunate demise of the parent. In such a situation, the insurer waives off future premiums.
• The insurer provides monthly income to the family in case of the death of the parent
• The plan offers a sum assured when the policy matures
• ULIPs provides maximum flexibility where investors can withdraw the entire amount in five years. Besides, investors can opt for closure of the policy after five years without any charges or penalty
• You can save any amount as there is no restriction on the maximum deposit in a year
• As a policyholder, you can claim tax deductions of up to Rs.1.5 lakh under Section 80C of the IT act .

If you plan to buy a child plan in the near future, you can choose to invest in a ULIP. You must evaluate the risk factor to make an informed decision. Investment in ULIP is always a wise choice as it will help you build a huge corpus to save for your child’s future.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.