As soon as you become a parent, you start planning to get the best for your child. From diapers to their higher education, you think about each and everything that secures your little one.
Financial investments too find their place in your head. You start looking for options that can fulfill all your goals, especially the higher education of your child. Interestingly, over the time financial investments have improved and customized themselves as per the growing demands of the customers.
Now, there are plenty of investment plans that can secure your child’s future and fund higher education. One such plan is Unit Linked Insurance Plan. In this article, you will get to comprehend this investment plan better and how it can help you in accumulating funds for your child’s higher education. Read on!
What are ULIPs?
If you are not much aware of the financial tools for investment, you might want to know what exactly is a ULIP plan. As mentioned above, ULIP stands for Unit Linked Insurance Plan which brings together the features of both insurance and investment.
For a ULIP plan, you will have to pay premium either monthly or annually. While the small amount of that premium goes into your insurance, the other part is invested into various options based on equity or debt to match your long-term goals. The goals can range from children’s education, marriage or your retirement plans.
How Can ULIPs Help Secure Your Child’s Future?
Here are some benefits that ULIPs offer to secure your child’s future:
Life Cover
This is the first and basic benefit that ULIP plans offer. As mentioned before, ULIPs are coupled with life insurance. This means that they will provide financial security to your family in the event of your untimely and unfortunate demise. Your beneficiary, i.e., your family will receive both the sum assured and fund value that your investments will gather.
At the time of buying the ULIP plan, it is essential that you must understand the future needs of your child’s education along with the inflation rate. This will help you choose the right target which can fulfill all the needs of your child’s education when the time comes.
Flexibility of Portfolio
There is no doubt that by introducing the investment benefit ULIPs become doubly advantageous. But what is more interesting about this investment feature is that you can decide where you would like to invest your money.
However, this can only happen if you carefully monitor your plan and notice if the progress can meet your future requirements. In case the investments are not suiting your long-term plans or are facing downfall due to market conditions, you can shift them between equity, debt and balanced fund options. For instance, if there are some issues in the stock market, you can opt to transfer your investment to debt and gain promising returns.
In a nutshell, the flexibility of the investment portfolio can help you accumulate enough funds for your child’s education.
Greater Returns with Less Risk
If you have started planning for your child’s future earlier and have long-term goals, ULIPs are ideal for you. The reason behind this is the volatility of the stock market. As ULIPs are linked to the stock market, its fluctuations can result in poor returns for short-term goals. However, the situation changes when you opt for a long-term investment. Your investment can digest the market risks and offer higher returns to you. This is also the reason that ULIPs are quite popular when it comes to achieving long-term goals like financing your child’s higher education.
Partial Withdrawals
At times, you would wish to withdraw a portion of your investments to finance your child’s education. ULIPs offer you this benefit but only after the specified lock-in period [5-years].
Various financial institutions have different terms and conditions for this. For instance, if you are buying Future Generali Big Dreams Plan, you can instruct the insurer in writing to withdraw partial funds after the lock-in period of 5 years. You can make unlimited free partial withdrawals under this plan. For more information, you can visit the official website.
Summary
Securing your child’s future is directly related to offering them quality education. Therefore, it is essential that you have enough funds to fulfill these needs. ULIPs prove to be the right companion for you in this journey of wealth creation. No matter what your child wants to be, a ULIP plan will ensure that his/her dreams do not remain just dreams but become a glorious reality.