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Benefits of ULIP as a Child Insurance Plan

ULIPs are one of the best child insurance plans as they provide benefits like waiver on premium, portfolio diversification, corpus for education and partial withdrawals.

  • 5,332 Views | Updated on: Jan 05, 2024

With so many investment

possibilities accessible, accumulating assets to guarantee your child’s future may appear to be a daunting task. A ULIP plan (Unit Linked Insurance Plan) outperforms other investments when it comes to saving for financial goals. It is a policy that provides both investment and life insurance, ensuring that your children can pursue their aspirations even if you are not around. ULIPs plan can assist you in building a corpus for your child’s education, allowing them to pursue their goals. The waiver of premium option is available on ULIP-based
kid plans to offer financial security in the case of the policyholder’s untimely death.

Many ULIP investment products take into account parents’ financial ambitions. It is critical to conduct an analysis of the top-performing ULIP funds to guarantee that you select the best plan. Using a ULIP calculator, you may compare child insurance plan and determine if it is a good catch for you or not.

What is ULIP policy?

A ULIP plan is a type of financial instrument that combines investments and life insurance into one package. When you buy ULIP, you must pay premiums on a monthly basis. A portion of the premium is used to provide life insurance coverage, while the rest is invested in funds that are either equity-oriented, debt-oriented or a combination of the two. Policyholders can decide how much and where to invest based on an appraisal of their financial commitments and risk portfolio.

It is best to begin your ULIP plan early in order to maximise your profits. This policy gives you the freedom to choose between funds as and when your financial needs change during your life. Whole life ULIP plans are also available, which are popular for their long-term benefits because the insurance remains active for the remainder of the policyholder’s life.

To avoid unpleasant surprises in the future, conduct the appropriate research, compare policies, analyse long- and short-term financial goals, and evaluate aspects such as ULIP plan prices to ensure that you acquire the best ULIP plan.

Benefits of ULIPs as a Child Insurance Plan

When it comes to saving for your child’s future, you’ll want to make sure you get the best child insurance plans in India. There is a common misperception that the best child life insurance plan is expensive and that it requires a large investment to be effective. However, you do not need to invest a significant sum to maximize your ULIP plan profits; instead, you should begin investing early. Furthermore, having tax-free ULIP returns is another perk that allows you to save more and gain more from your ULIP policy.

ULIPs are the finest child insurance plans in India for your child’s future because of several unique features:

  • Waiver of Premium Benefit
  • In the event of the policyholder’s death, the sum promised is paid to the specified beneficiary, while the insurance company pays the due premium for the remaining policy term.

  • Investment in a Diverse Portfolio
  • ULIPs allow you to diversify your portfolio and maximize your capital appreciation to help your child build a bright future. Furthermore, the ability to swap between funds ensures that you are invested in the best-performing ULIPs. The feature of auto fund rebalancing ensures that your assets are unaffected by market movements by specifying your investing preferences.

  • Corpus for Child’s Education
  • As ULIP plans are specifically created to assist in achieving long-term financial goals, they can assist you in creating a bright and productive future for your child without causing you any stress or financial pressure in the future.

  • Partial Withdrawal
  • If you want to help your child pursue their passion but don’t have enough money, the ULIP savings plan allows you to make a partial withdrawal based on the policy’s terms.

A child life insurance plan is a straightforward traditional investment plan with coverage tailored to a child’s needs. It can be used to protect the life of a parent or even a child, as long as the insurance is tailored to the child’s bright future.

- A Consumer Education Initiative series by Kotak Life

Amit Raje
Written By :
Amit Raje

Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.

Amit Raje
Reviewed By :
Prasad Pimple

Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors

In this policy, the investment risk in the investment portfolio is borne by the policyholder.

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