We celebrate Children’s Day on the 14th of November, but Universal Children’s Day is observed on the 20th of November. This year, take a moment to reevaluate the financial decisions you are taking for your little one.
If you are a new parent or are planning to become one, you know exactly how difficult financing a child’s education is getting these days. Parents start thinking about it even before the child is born. Our parents usually went the fixed deposit or the gold ornaments away. However, these are not enough now. Keep your worries at bay as there are such diverse options available in the market
The two major factors to keep in mind for your broad financial planning are readily available finances and financial security in case of an eventuality. There are multiple ways to go about financing- education loans, loans from family, investments, etc. But who would prefer the burden of a loan when you can plan in advance with investments?
As far as security is concerned, there are plenty of life insurance policies available in the market. Life insurance protects your entire family’s well-being in case of your unfortunate demise.
But there is a simpler way to get the best of both worlds – ULIPs.
What are ULIPs?
Unit Linked Insurance Plans are the ideal crossover between investment and insurance. They work like a regular insurance plan for which you pay premiums. Your premium payment is divided into life insurance and an investment in funds, such as equity funds, debt funds, or a combination of both. This combination entirely depends on your risk appetite. For starters, you can check out the Child ULIPs available on Finserv MARKETS, which offer a number of features like partial withdrawal of funds, fund boosters, and more.
Child plans are basically ULIPs with a two pronged approach: (1) help you invest in financial instruments that will generate a substantial portion of returns to help build a sizeable corpus for your child’s future (2) in the event of the policyholder’s demise, ULIPs help you provide financial security to your children, helping them grow and reach new heights, even without you by their side.
Why should you go for a child education plan?
- Alarming rise in costs of education
The current educational inflation rate is a good 10%-12%.This means that the cost of a degree or post-graduation will be more than double what it is now in another 10 years. Scary, isn’t it? For a working-class family, it becomes essential to plan ahead in order to ensure that their child’s dreams are fulfilled. One of the most important ULIP benefits is that finances won’t stand in the way of your child’s aspirations; they can be anything they want to an engineer, a doctor, an artist, or anything else that they have set their hearts on.
In sickness and in health
If the parent passes away while their kids are still young, one of the ULIP benefits is that they don’t have to compromise on any aspect of their lives financially. In case of death, the insurance provider will step in and take care of all future premiums.
In times of need
ULIP plans also allow partial withdrawal in case you need to pay urgently for a sudden educational expense. You can rest assured that you don’t lose your entire policy while doing so, and your child continues to remain protected.
Small and easy investments for larger expenses
Since you are investing relatively smaller amounts on a regular basis and still achieving two goals at once, financial planning becomes more convenient. At the end of the day, you gather a lump sum with added earnings and ensuring your child doesn’t have to compromise on their dreams.
ULIP plans are exempt from tax under Sections 80C, 80CCC, 80CCD of the Income Tax Act. This makes financial planning even easier as you don’t have to worry about investment during filing of returns.
Management of investments
Hassles are truly minimized when you go for ULIPs. Fund managers from the company will take care of the investment part of your plan, while the insurance part will take care of itself; and you have the time to take care of your child’s dreams. This is just one of the many, many ULIP benefits.
Flexibility of changing portfolio
You have the option to choose a preferred type of investment right at the start, while also having the option of switching from equity to debt or a mixed portfolio at any point.
Be it Children’s Day or any ordinary day, make a lifelong promise to your children that their dreams will be taken care of, in your presence or absence. Invest in a ULIP Child Plan at the earliest. If you want a plan that offers additional benefits like loyalty additions and return enhancers, you can check out the ULIPs Child Plan available on Finserv MARKETS.
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