The first thing that comes to your mind when you have your child is to give them a financially stable life, but we often end up starting late for the investment. Nowadays, along with the rising lifestyle expenses, we have rising education expenses. Such expenses can only be taken care of with proper financial planning.
Planning for your child’s future should ensure a smooth financial flow at every stage of child development. The key here is making a financial plan that supports Child’s development at every stage in your presence and also in your absence.
Normally while selecting any investment, we focus on avenues like PPF, but to let this plan continue, we need to fund the plans regularly. Such investments would lapse in lack of funds, which is the issue if the earning parent dies. To deal with these situations, one can choose a ULIP plan – an investment cum insurance plan.
ULIP plans are the ideal investment instrument that assures financial stability for the child in case of any uncertainties. And here are the reasons why ULIP plans should be considered as an investment option for securing the child’s future.
Flexibility in investment– You choose your ULIP policy based on your risk-taking capabilities. You can choose to invest in debt funds or equity funds or both according to your goals and your needs. You can also switch between the chosen funds and add top-ups to your existing plans.
So according to your changing needs for your child and your risk appetite at a different stage of your life, you can choose your fund option.
Transparency – These plans are transparent as you are aware of the intricate details of the charge structure, your expected returns and the value of your investment for the entire policy period before you choose a particular plan.
So, if you are investing for your child’s education, ULIPs are safe as you have a good idea about your investment and its potential returns. Along with this, you will know your investment portfolio with the regular updated NAV report.
Partial withdrawal facilities– One can enjoy partial withdrawal facility in ULIP plans, in case of any unforeseen circumstances. Also, one can withdraw funds after 5 years from taking the plan. So, in case of any emergency, one can easily withdraw from Unit linked account.
Too often, we tend to skip our investment and let go of our savings for some other purpose. In the case of ULIP, we need to pay the premiums regularly as missing any premium would lapse, and previous premiums would not be accountable.
With investment in ULIPs, one can enjoy the benefit of investing in market-linked products along with coverage. A dedicated fund manager is provided to every ULIP plan policyholder who tracks the investment and also allows the policyholder to select the desired fund for investment.
The benefits that ULIPs provide gives a clear understanding that investing in ULIP plans to secure the future of the child is a wise decision. Generally, within 30 to 60 days when the child is born, the primary earning parent should invest in ULIPs for a secure financial future.