Kotak e-Term Plan
Kotak e-Term Plan provides a high level of protection to your loved ones in your absence.
Kotak Guaranteed Savings Plan
Kotak Guaranteed Savings Plan is a savings and protection plan that helps you achieve long-term financial goals and provides an insurance cover against any eventuality.
Kotak e-Invest plan is a complete Unit-Linked Insurance Plan that can be customized as per your goals and needs.
Kotak Health Shield
Kotak Health Shield Plan helps secure your finances in sudden medical expenses such as Cardiac, Liver, Neuro, and Cancer (all early and significant illness stages/conditions of cancer), along with offering protection for personal accidents - in case of accidental death or disability.
Kotak Lifetime Income Plan
Kotak Lifetime Income Plan gives you the security of your income continuing throughout your life and in your absence throughout your spouse's lifetime!
Accumulating a corpus to ensure a safe and secure financial future for your child might be an arduous task, and indeed it is one of the tough ones when we talk about our role and responsibilities towards family. However, with proper financial planning, like opting for various investment plans that are designed specifically for such purposes, this should become easier for you and your child’s financial stability in the future.
When you start exploring the investment options for your child in the market, you will find many options, but plans like ULIP investment for education, ULIP investment for higher education, Guaranteed Savings Plans, and traditional plans like Public Provident Fund, Sukanya Samriddhi Yojana, etc. are some of the most popular and best options that you have.
Modern plans tend to have more benefits, and if managed correctly, they will certainly help you in reaching your financial goals within the desired time and then contribute additionally to your savings.
In this article, we will discuss ULIP for children, the benefits of ULIP as an investment for children, and how one can plan ULIP investment for higher education for their child, among other topics related to ULIP investments for your children.
Unit Linked Insurance Plans, also known as ULIPs, are among the most popular and subscribed plans nowadays. ULIP offers policyholder the benefit of insurance and the opportunity to invest in market-linked securities - thus, providing a great opportunity for the investors to have their life secured with insurance, while remaining invested in the market to mint money as it grows.
Many people think that investment in the market is very risky. But, when you are investing in ULIP, you must understand that you are investing only a part of your premium for investment in the market-linked securities. Also, these securities have varied risk profiles, and you can opt for these as per your risk appetite. If you have a high-risk appetite and want a higher return in a short span, then you may opt for equities. However, if you like to invest your money more safely and make stable growth over time, then bonds may serve the right purpose for you.
As a parent, one of the most important financial goals for you is to ensure that your child gets the best quality of education and that money is never an issue in their growth years - especially when the fee of higher education is skyrocketing these days and the semester fees increase marginally every year, it is tough to pay such a hefty amount without proper financial planning.
However, choosing the right option from innumerable savings schemes available in India can be a hectic task and thus discouraging too. In such scenarios, ULIP is a great option, as it has a lot to offer, even as a savings plan for your children. Other than habituating you to follow an investment discipline, ULIPs also offer many other benefits that can be useful for parents when investing in a child’s future.
When you are planning ULIP investments for higher education of your child, you must know all the benefits of ULIP investments. This helps you in understanding how ULIP is a much more feasible and better option compared to other market-linked products.
Here are the best features of a ULIP investment for children:
In case of an unfortunate demise of a ULIP policyholder, the nominee of the policy will receive the sum assured while the premium that is due will be paid by the life insurance company for the complete policy term.
This feature ensures that your child will not have to bear the extra monetary burden of paying a premium for policy in case of your absence. Moreover, he will get the complete sum assured amount once the policy reaches maturity, ensuring that his financial needs for higher education are met as planned by you previously.
One of the golden rules of investment is diversification. ULIP offers you an inbuilt mechanism where you can diversify your investment into various market-linked securities like debts, equities, bonds, etc
Additionally, the fund switching option ensures that you can manipulate your portfolio as per market trends and needs to accelerate your investment growth.
When you start ULIP investments for the higher education of your child, then other than developing a habit of disciplined investment, you also learn how to stay invested for a minimum span of 5 years. This, other than helping you build a decent corpus for your child’s education, gives you a taste of the benefits of long-term investment for wealth creation. Additionally, if you want to withdraw the money invested in ULIP, then you can withdraw it easily after five years to meet any emergency requirement.
ULIPs allow partial withdrawal. So, if you require an emergency fund in between the investment period, then you can withdraw a partial amount as per policy guidelines and support your child financially as and when required.
The maturity benefits and proceeds amount of the ULIP policies are tax-exempted as per Section 80C deductions, and thus, in addition to savings income tax for you, through ULIP, your child will receive a complete lump sum amount at the end of the policy term without any tax-deductions.
So, ULIP investment for higher education of your children is a great way to accumulate a decent corpus for them. ULIPs not only ensure an investment to match the market inflation but also secure your child’s future by offering a very beneficial life insurance protection for their financial future.
In this policy, the investment risk in the investment portfolio is borne by the policyholder.