Every parent has great hopes for their children’s future. But the rising cost of education and other expenses sometimes puts you in a situation that prohibits you from saving anything for tomorrow. This is why people are advised to make use of ULIP plans that are designed to help every individual save more and reap more. Considering child plans (ULIP) in order to secure your little one’s future is a great way to go about.

Benefits of Child Investment Plans

ULIP meaning Unit-Linked Insurance Plan is one of the best options available when it comes to securing your child’s future and education. ULIPs are beneficial since they offer you insurance as well as market linked returns. Here, a part of your premium would be used for life cover and the other part would be invested in equity or debt or probably both.

With a ULIP plan, you do not have to worry about going in for a separate life insurance policy or investing for the future. ULIP helps you cover both these needs which would naturally lower your premium amount. If you’re thinking why I should invest in ULIP then here are some of the benefits.

Start Small

With a ULIP plan, you do not have to pay large sums as a premium amount for your child’s insurance. Start off small with just a few thousand rupees. Later, you could gradually increase your premium amount, depending on your budget. This way you do not have to compromise on anything. You can use a ULIP return calculator to calculate your returns.

Choose Your Investment Portfolio

When you go in for a ULIP plan, you have the option of choosing your investment portfolio, as per your risk appetite. If you are okay with high risk and high return options, you could choose the equity-based funds. If you do not want to go for the high risks option, you could choose a debt fund or one that has a mix of both.

Switch from One Fund to Another

You could switch from one fund to another, depending on your needs. You also have the option of deciding where you want your premiums to be invested in for the future.

Invest More Through Top-up Premiums

With ULIPs, you can also invest more through top-up premiums. This is the amount that you pay over and above the basic premium amount. Top-up premiums help you increase your investment and also the sum that is assured.

Withdraw Funds

In case of an emergency situation, you have the option to withdraw funds that would be a part of your investment. ULIPs come with a lock-in period. But, beyond that period, you are allowed to withdraw funds.

Death Benefit

In case of an unfortunate situation, your child will be given access to the funds. This can be used for education or other financial requirements. There are different types of death benefits that are available, so you can choose the one that suits you the best.

Full Payment on Maturity

If everything has gone as per the plan and premiums are paid on time, you will receive the whole investment at market rates on the date of maturity. The money you receive can then be used for your child’s education and other needs.

Tax Benefits

The premiums that you pay for your child’s investment plan are eligible for tax deductions under Section 80C. Returns and pay outs received are also eligible for tax benefits under Section 10D.

ULIP plans are designed for investment and protection purposes and are ideal for securing your child’s future. They are also very affordable as compared to other investment options.