All parents dream of securing their child’s future and providing them with the best of everything, from lifestyle to education. And, to fulfil those needs, they look for a good investment plan that provides them with valuable returns. So, if you are looking for the best investment plan that secures your child’s future and takes care of all the needs, you can consider investing in ULIP (Unit Linked Insurance Plan).
What is ULIP?
As the name suggests, ULIP is primarily a life insurance product. It provides protection against the uncertainties of life and, at the same time, allows you to grow your money and get market-linked returns. It also gives you the flexibility to invest in the equity and debt market based on your risk appetite.
If something happens to you during the policy tenure, the insurance company will pay the death benefit to the nominee. Your family can use the amount to take care of their everyday needs. Thus, you can be assured that your child and other family members never face any financial hassles even in your absence.
A child ULIP plan allows you to enjoy triple benefits. Along with insurance coverage, it also allows you to participate in the equity market and be disciplined towards your investments. These benefits ensure that your nominee child receives the sum assured. Also, the insurance company may waive off the future premium and pay the maturity value at the end of the policy tenure, ensuring that your child’s future dreams are fulfilled.
Let us look at some of the features of ULIP
You can pay the premium as a lump sum at the start of the policy term. If you don’t have enough cash, you can choose a regular premium payment mode, wherein you can pay the amount periodically. It can be every month, quarter, half-yearly or annually. The premium you pay depends on the sum assured you choose.
While buying a ULIP plan, choosing a policy with a high sum assured is better. If you are not sure how much is enough, you can follow the rule of thumb. The sum assured must be about 10-15 times your annual income. This will ensure that your child has enough financial resources to deal with the rising inflation. Generally, ULIPs offer a high sum assured, which means you can be sure that your child never has to compromise on their dreams.
Another significant feature of child ULIP plans is that you can choose the payout mode. You can decide if the child gets paid the death benefit in a lump sum or small instalments. This way, you can be sure that your child can pay their college fees, fund the marriage expenses, or have enough funds to start their own business.
In the event of your untimely demise within a specific duration of the policy, the sum assured will be paid to the beneficiary, and the premium for the remaining term will be waived off. Your family may receive the maturity amount at the end of the policy term, i.e., the returns earned from your investments as per the policy terms and conditions. If the insurer does not provide a premium waiver benefit, you can purchase the benefit as a rider. This way, you can ensure that your family does not face the burden of paying the premium.
With such fantastic features and benefits of ULIP, it can be a saviour in securing your child’s future. Make sure that you compare the different plans and choose the one that best suits your needs and budget.