One of the most important concerns for every parent is their child’s future. Therefore, it is crucial to look for good investment plans in order to secure their future. A unit-linked insurance plan (ULIP) can be helpful to achieve this goal.
In this article, we will discuss why ULIPs are a good option for securing your child’s future.
A lot of parents try to find ways to accumulate sufficient funds to ensure they can meet various expenses to secure their child’s future. Education fees, healthcare costs, etc., can cost a lot of money, and a good investment plan can help a person build the funds to pay for such expenses.
A ULIP is a great option that can help parents secure their child’s future. ULIPs are insurance policies that provide the benefit of life insurance as well as investment. When a person invests in a ULIP, a part of the premium is invested in investment instruments, and the other part goes towards life cover. Therefore, the policyholder can ensure his/her beneficiaries get financial assistance in case he/she passes away during the tenure of the policy. Furthermore, a parent can build a substantial financial corpus for his/her child’s future expenses.
Benefits of ULIPs
- It Can Help in Building a Financial Corpus
In order to secure their child’s future, a lot of parents try to save money to fund education. However, savings alone might not help as education costs are rising every year. But investing money in ULIPs can help parents earn significant returns. Therefore, they can build a huge financial corpus.
- It Can Provide a Waiver of Premium Option
The waiver of premium option is one of the most important benefits of ULIPs. This benefit is provided by the insurer in case the policyholder passes away during the tenure. In such a situation, the future premiums are paid by the insurance company. Therefore, securing the child’s future.
- It Can Offer Sum Assured
As ULIPs also offer life cover, they can provide the policyholder’s family with the sum assured if he/she meets with an untimely demise. This sum assured can be used for the child’s future expenses. Furthermore, it can offer monthly income to the child to meet regular expenses.
- It Can Offer Tax Benefits
Apart from life cover and investment benefits, ULIPs also offer tax benefits. Under Section 80C, premiums paid for purchasing a ULIP are eligible for a tax deduction up to Rs. 1.50 Lakh.
- It Allows to Switch Funds
ULIPs also allow the policyholders to switch funds. Investors can switch between equity and debt easily. Therefore, it can help increase their returns.
When Should A Parent Start Investing?
ULIPs can be beneficial if a person plans to stay invested for a longer tenure. Therefore, it is recommended that parents start investing after their child is born. By investing in a ULIP, the policyholders can get life cover that can be helpful for their child. Furthermore, as a person stays invested for a longer term, he/she can build a significant financial corpus.