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How to Invest for Children’s Education using ULIP?

By Finserv MARKETS - Dec 20,2019
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What is ULP, Child Plan ULIP

November 20, 2019 was a historic day. It marked 30 years of the CRC (Convention on the Rights of the Child). CRC is a framework for child rights made by the UN.

In the backdrop of perpetually rising prices, it becomes paramount to invest in your child’s future early on. Your savings won’t be sufficient for bigger expenses and emergencies. A highly recommended option is a Child Unit Linked Insurance Plan.

What is a ULIP?

A Unit Linked Insurance Plan provides the double benefit of insurance and investment. One part of your premium is utilized for life insurance and the other is invested in funds based on your risk appetite. If you are looking to invest in ULIPs, you can check out those available on Finserv MARKETS. They offer a plethora of value-added benefits such as partial withdrawal of funds, rider options, and much more.

What is ULP, Child Plan ULIP

What is a child plan ULIP?

A ULIP is an insurance plus investment plan that you can use to secure your child’s future financially. In case of your sudden demise, your child will be given a lump sum amount. Simultaneously, with their investment instrument, you can ensure that a sizeable corpus is available for major expenses like education and marriage.

What is a Child Education Plan?

A ULIP Education Plan is designed specially to take care of your child’s education in case of a financial emergency. You can use the fund through partial withdrawal when necessary.

Why child plan?

Educational expenses

Our children have dreams and it will only break our hearts if we cannot fund the education required to fulfil their dreams. The reality in India right now is that education is increasingly becoming more and more expensive. According to studies, by 2025, an engineering degree will cost around Rs.30 lakhs and an MBA degree around Rs.50-60 lakhs. Investing for your child early on is key to financing courses like these. Additionally, your child plan can also work as collateral for educational loans.

What is ULP, Child Plan ULIP

Habit of saving

You are not as worried about savings before you plan for a child. If you invest in your children’s future early on, you will find that managing your savings becomes easier in the future as well, and you can plan better for the larger costs that come ahead.

Big returns with small investments

Your regular premiums will be relatively small in amount. On compounding, they will mature into a significant amount. If you invest in your children’s future with ULIPs, it will make your life much easier when you have crucial expenses like college fees or medical expenses ahead of you.

Save yourself from the debt trap

If you don’t plan much in advance for major child-related expenses, you are bound to take loans at rising interest rates. Save yourself from this eventuality by investing smartly at the beginning itself.

Yes, you can save tax as well!

Under Sections 80CCC, 80C, and 80CCD, ULIPs are exempt from tax. Right from the initial investment up to maturity, you can save tax every step of the way. This is an additional benefit over and above the insurance and investment benefits.

For a healthy and happy child

Although we take utmost care of our children, they are always susceptible to diseases. In case of a major illness, a child plan, along with health insurance, will ensure that your child gets the best possible medical treatment.

Protect your child even after you are gone

Children are dependent on us for a lot of things. When a parent or guardian passes away, the child suddenly faces undue financial stress. To protect them from this situation, a child plan provides a lump sum and does not require any premium payments thereafter.

There is never enough that you can do to invest in your child’s future. A child ULIP is only one of the first steps in this direction. If you haven’t considered one already, you should do it on priority. You can opt for the Bajaj Allianz Child Plan, available on Finserv MARKETS, which offers flexibility in investment portfolios, and approximately 25% returns for a 5-year period of investment.

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