ULIP includes both investment & insurance factors, providing policyholders with dual benefits, i.e., securing their family’s financial future with financial growth. Unlike term insurance, ULIP offers a part of the premium to be paid towards life insurance & the rest towards investment. One can opt to invest in debt, equity, or both depending upon the level of risk & your objectives, making it an ideal investment option. It provides a flexible option to switch between the funds anytime during the policy tenure.
Every parent wants to provide the best education to their children, for which a huge corpus of funds is required. When it comes to securing your child’s future, a ULIP-based child plan is considered to be a great option, as it helps secure your child’s financial future. ULIP-based child plans help in meeting future financial obligations, such as a child’s higher education, a child’s marriage, etc. If you want to go for the Best Child Education Plan, ULIP can be a good option, as it offers the dual benefits of insurance & investment.
Reasons to Buy a ULIP Child Education Plan
Provided are the reasons a parent should opt for a ULIP Child Education plan:
- This plan will provide financial security to the parents, further helping their children to pursue higher education.
- If the child opts for higher studies, the tuition fees will be included as well.
- This plan helps to cover future educational expenses when a child requires the funds.
- It offers financial support to the children even after their parent’s sudden demise.
- It offers high returns, taking the inflation factor into consideration.
Things to be Considered Before Buying a ULIP Child Education Plan
Provided are the things a parent should keep in mind before buying a ULIP Child Education Plan:
- Policy Features
One should choose a ULIP after considering its features, policy tenure, frequency of payment of premium, etc. The plan should meet the timelines of your future financial obligations.
- Risk Portfolio
Consider the riders available, insurance funds offered, risk tolerance level, etc.
- Insurance Claims Settlement Possibility
Look for an insurance provider company that has a high claim settlement ratio.
- Careful allocation of Funds
The policy coverage & the investment tenure should meet the future financial objectives, healthcare requirements, career objectives, marriage, or any other life objective of the children.
Eligibility Criteria
Provided are the eligibility parameters that should be met to buy a ULIP Child Education Plan:
- In the case of the policyholder, i.e. parent or guardian, the minimum age to enter the plan should be 18 years.
- In the case of the policyholder, i.e. parent or guardian, the maximum age to enter the plan should be 60 years.
- In the case of a beneficiary, i.e. a child, the minimum age to enter the plan should be 0 years.
- In the case of a beneficiary, i.e. a child, the maximum age to enter the plan should be 18 years.
- The maturity age for the policy for the child ranges between 18 & 25 years.
- The maturity age for the policy for the parent is 70 years.
- The policy tenure ranges between 10 to 30 years.
- The minimum amount of sum assured ranges from 10 times the annual premium.
Documents Required
Provided is the list of documents required to buy a Child Ulip Plan:
- Address Proof: Passport, Driving License, Voter ID, Aadhaar Card, etc.
- Income Proof: Bank Statements, Income Tax Returns, Salary slips, etc.
- Age Proof: Passport, Aadhaar Card, Driving License, Voter ID, etc.
- Identification Proof: Voter ID, PAN Card, Aadhaar Card, etc.
Benefits of a ULIP Child Education Plan
Provided are the benefits of the ULIP Child Education plan:
- Build Sufficient Corpus for Child Education
This plan helps meet all the expenses related to education by building enough corpus funds.
- Collateral to Raise Loan for Higher Education
These plans can also be held as collateral to raise the loans for higher education.
- Dual Benefit
While the Best Life Insurance Policy in India may provide protection only, the ULIPs offer the dual benefit of insurance & investment, allowing wealth growth & securing a child’s future.
- Gives Higher Benefits over the Inflation Growth
Education-related expenditure grows 10-12% annually, but in the long run, the best equity-linked child educational ULIPs reap benefits higher than the inflation factor.
- Financial Support for Medical Treatment
This plan offers partial withdrawal of funds, offering liquidity during medical emergencies after a lock-in period of 5 years.
- Waiver of Premium benefit
In case of sudden demise of the policyholder, the amount of the sum assured will be paid to the nominees, & the premium for the remaining period gets waived off & hence paid by the insurance company.
- Tax Benefits
- This plan offers a tax deduction on the amount of premium paid, a maximum of up to INR 1.5 lakhs per annum u/s 80C.
- Get a tax exemption on the amount of interest paid on educational loans for up to 8 years.
- If the amount of premium paid per annum under this plan is up to INR 2.5 lakhs, the maturity proceeds thereof will be exempt from tax, except for death benefits.
- Corpus for Child’s Education
This plan helps to build a bright future for children, hence relieving the financial stress of the policyholder.
- Investment in a Diverse Portfolio
Under this plan, the funds are invested in a diverse portfolio, which helps maximise your capital & build a brighter future for your child.
- Dual Payouts
The amount of the sum assured is paid in case the insured dies. &, the fund value is paid at the time of maturity of the plan.
Conclusion
Each child’s ULIP plan offers different benefits according to their income & lifestyle, securing the child’s future. These plans offer financial security, tax benefits, wealth creation, etc., by combining insurance & investment, which help parents meet their child’s educational requirements. Whether it is school fees, higher education expenses, or any extracurricular activities, this plan covers all.