Homepersonal finance News

    Here's how you can plan your child's future with ULIP

    Here's how you can plan your child's future with ULIP

    Here's how you can plan your child's future with ULIP
    Profile image

    By Anshul   IST (Updated)

    Mini

    The biggest hurdle that most parents face while planning and saving for their kid’s future is funding higher education, typically post-graduate or master’s studies.

    The biggest hurdle that most parents face while planning and saving for their kid's future is funding higher education, typically post-graduate or master's studies. While most parents are quite aware of the fact that they would require a huge corpus for funding education, many parents are unable to choose the right investment option.
    In such a situation, Vivek Jain, head-investments, Policybazaar suggests individuals to start by investing in child ULIP scheme and gradually move to de-risk the policy to safer funds before the maturity term.
    Also read:
    Unit linked Insurance Plan (ULIP) for child enables an insurer to choose the type of fund to invest such as money market, hybrid, debt, and equity. It gives three benefits, along with higher insurance coverage, contribution in the equity market and disciplined investment.
    "The biggest advantage of ULIP based child plans is that they come with the waiver of premium rider wherein in case of the sudden death of the parent of the child, all future premiums are funded by the insurer himself. Unlike other child plans, the policy does not get discontinued, and rather it continues in the same manner. The insurer on behalf of the parent pays all the future premiums till the policy term," Jain explains.
    With this, the money keeps growing and the child does not fall short of the corpus at maturity of the policy.
    As per Jain, this is one prominent reason why ULIP based child plans are one of the most sought after investment products in the market.
    Under some ULIP based child plans, the dependents even receive a lump sum amount on the death of the parent along with regular income to meet the everyday expenses.
    As a parent, Jain suggests, it is equally important to adopt a well-planned strategy for choosing between short, medium, and long-term funds as and when required.
    Few ULIP based child plans come with unique triple benefits.
    "First, under ULIP based child plans the future premiums of the plan are paid by the insurer on the parent's death. Second, monthly income is also provided to the family in order to fund a child's education on the death of the parent. Third, a lump sum payout is also made to the family on the parent's death to meet the daily expenses," he illustrates.
    Disclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.
    arrow down

      Market Movers

      View All
      CompanyPriceChng%Chng