As a parent, there is hardly anything more important than ensuring the future of your child. But let’s face it, life is unpredictable, and we never know what might happen to us tomorrow. Therefore, it is necessary that your child’s future is protected against the vagaries of life.
Child plans are specific insurance plans which help parents save for their child’s future expenses in a systematic manner. Broadly, these plans can be categorized into two sections – child education plans and child insurance plans. An education plan is primarily for the ongoing education of your child- from school to university – with predetermined maturity milestones and funding made available at definite periods. On the other hand, a child insurance plan provides full-term amounts, or compensates the child on maturity and allow them to continue their studies in case something unfortunate happens to the earning parent.
Unit Linked Insurance Plans for children are unique insurance products which offer a mix of both education and insurance plans. Those looking for higher returns in view of the spiraling cost of higher education, along with a life cover for the parent, should consider buying ULIP child plans.
Understanding the key differences
Most child education plans are generally short term and offer quarterly or annual payouts on the maturity of the sum invested. As opposed to this, child insurance plans are relatively long-term investments, the maturity tenure is generally pre-determined and it covers the risks involved with the unforeseen death of the parent.
The difference between child education plan and child insurance plan is about differentiating between education benefits and term benefits. A child education plan is only for covering the education cost of your child and has a limited scope when it comes to related benefits. If you want to cover all the expenses of your child then you need to invest wisely as maturity benefits from child insurance plans can be used for any expenses, including that of your child’s marriage.
ULIP to the rescue
However, maintaining two separate policies may not be feasible for most of us. This is where ULIPs can come to your rescue. The child unit linked insurance plans provide life cover to the parent along with investing the premiums in the funds as per his/her investment objective. In case everything goes as planned, the fund value is made available at the end of the policy term for taking care of the child’s future requirements.
A part of the premium in ULIP child plans is used as life cover and the rest can be invested in top-rated funds of your choice at Finserv MARKETS. The policyholder can switch between various funds under the tenure of the policy, get tax benefits and has various options of surrender.
To sum up, responsible parenting is considered extremely important for every child’s growth. It involves making prudent choices for a comfortable and secure future for your kids. Investing in ULIP child plans can prove to be the key in achieving your child’s dreams of a good education, a career and financial stability.
Also read in detail about the ULIP tax benefits you can avail with various insurance plans available on our platform.
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