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Plan your Child’s Education with ULIP

By Finserv MARKETS - Feb 5,2019
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Plan your Child's Education by Investing in ULIPs

Every parent dreams of providing the best education for their children. Especially in a country like India, where education is given paramount importance in most families. This becomes one of the most important aspects of parenthood. However, one may also note that as the years have passed, the cost of good education has only risen.

To reach this goal, the first thing one needs to understand is that the financial planning needs to start early. And in this post, we will look at how Unit Linked Insurance Plans can become the financial instrument to make your child’s education dream a reality.

What is ULIP?

Before we get into the details, lets first understand what a Unit Linked Insurance Plan is. It is a market-linked product that offers the dual benefit of an investment and a life insurance risk cover. Here, the policyholder pays a premium amount either monthly or annually. Out of this premium amount, a small amount of the premium goes towards a life insurance cover and the rest is invested in market instruments like stocks, bonds or funds (equity, debt or a hybrid).

What is a ULIP Child Plan?

A child plan works similar to a normal ULIP policy but is customized in such a way that it provides added benefits and features to ensure that your child gets the right financial support to fulfill his/her dreams with or without you being around. These benefits include a life cover, tax benefits and complete flexibility to invest in the funds of your choice, depending on your risk appetite and your child’s education goals.

How to Plan for your Child’s Education with ULIP Child’s Plan?

It all starts with proper research on how much amount you would require and in what year. Things to consider here would be the choice of education stream that your child may choose to take up, its current expense analysis, then understanding how the expenses have increased over time due to inflation. Based on this research, you will need to extrapolate the expense that you may require when your child reaches that particular age in the future.

This should give you a fair idea as to what kind of funds you will need at what time. This becomes your target amount. Next, you will need to determine how much time you have to accumulate/earn this amount. Suppose you have 15 years in all to reach this amount, you will need to calculate the monthly or yearly premium that you need to pay, to get there.

However, this is where the power of ULIPs can be put to use. Since you have the flexibility to choose the funds at any point in time. You can utilize market insights or keep a keen eye on market performance to determine an appropriate time to switch to a high risk & high returns fund. If you plan smartly, you can reach your goal in less amount of time with the same premium.

Benefits of ULIP Child’s Plan

  • Tackle the rising education costs due inflation
  • Enjoy dual benefits of investment as well as insurance
  • Though small in terms of amount, your regular investments when compounded will grow into a handsome amount upon maturity
  • Tax benefits under Section 80C and 10D of the Income Tax Act, 1961. Moreover, ULIPs are exempt from Long-Term Capital Gains Tax hence making them an attractive investment avenue

So why wait? Secure your child’s future and buy a unit linked insurance plan with Finserv MARKETS today!

Also read in detail about the ULIP tax benefits you can avail with investment plans available on Finserv MARKETS.

“Finserv MARKETS, a subsidiary of Bajaj Finserv, is a one-stop digital marketplace that has been created for consumers on the go. It offers 500+ financial and lifestyle products, all at one place. At Finserv MARKETS, we understand that every individual is different. And that’s why we have invested in creating a proposition – Offers You Value. A value proposition that ensures you get offers which are tailor made for you. We also offer an amazing product range and unique set of online offers across Loans, Insurance, Investment, Payments and an exclusive EMI store. Be it in helping you achieve your financial life goals or offering you the latest gadgets, we strive to offer what you are looking for. From simple and fast loan application processes to seamless and hassle-free claim-settlements, from no cost EMIs to 4 hours product delivery, we works towards fulfilling all your personal and financial needs . What’s more! Now enjoy the same benefits in just one click with our Finserv MARKETS App.”

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Bajaj Finserv Direct Limited ("BFDL"), erstwhile Bajaj Financial Holdings Limited is a registered corporate agent of Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited under the IRDAI composite registration number CA0551 valid till 10-Apr-2021. BFDL also renders services to Bajaj Finance Limited (‘BFL’) and Bajaj Housing Finance Limited (‘BHFL’) (referred hereinafter as ‘Lending Partner’) in sourcing of customers, providing preliminary credit support activities, fulfilment services and post-acquisition customer services related to lending business. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522