A ULIP based child plan can help you financially secure your child's future and provide a comfortable life. These plans can help you fulfil their goals in life, such as higher education, marriage, and more. ULIP based child plans offer you the flexibility to invest as per your needs and provide you returns that can help fulfil your child’s financial goals. They also offer a life cover^{^} that ensures your child’s financial security in case of an unfortunate event.

What is Child ULIP Plan?

A ULIP child education plan is an investment tool that combines life insurance with market-linked investments. It allows you to prepare for your child’s education and long-term goals. It also has a life insurance cover^{^} that protects the child’s financial interests in your absence.

ULIP plans offer different investment options, including equity, debt and balanced funds, which allows you to build wealth while aligning your investments to your goals.

What are the Features of a ULIP-based Child Plan?

A ULIP based child plan can be ideal for long-term savings. These plans provide many beneficial features. Some of these are mentioned below:

Risk Diversification

ULIPs allow diversification by offering a range of fund options. You can spread your investment across equity, debt and hybrid funds to reduce risk and potentially enhance overall returns.

Fund switching option

A ULIP based child plan provides you with the option to switch between funds multiple times during the policy term. This enables you to take advantage of market opportunities. You can choose to switch to relatively secure debt funds when the market is volatile and to equity funds when the market conditions are good.

Market-Driven Flexibility

ULIP plans offer flexibility to respond to changing market conditions. You can top up your investment when market opportunities arise. You can rebalance your portfolio and make partial withdrawals¹³ after the lock-in period if you wish to liquidate your money based on market signals.

Multiple Switches Allowed

ULIPs allow you to switch⁵ between funds during the policy term. This lets you react to market shifts or realign your investments as your financial goals change over time.

Partial withdrawal^# of funds

ULIP based child plans provide you with the option to withdraw money from the plan during the policy term. This can help you meet various milestones of your child. This feature also helps you stay financially prepared for any emergency.

Access to Funds When Needed

After the five-year lock-in period, you can make withdrawals ^13,17 from your ULIP. This gives you access to funds for miscellaneous expenses for your child, such as school fees, extra-curricular courses and more.

Financial Flexibility

ULIPs offer flexibility by allowing you to choose your premium payment frequency, investment funds, switch options, top-ups and withdrawals. This makes it easier to tailor the plan to your financial situation and goals.

Tax^* Benefits

A child ULIP plan offers several tax^* benefits under the Income Tax Act, 1961. You can save on taxes through deductions on your premium payments under Section 80C. Additionally, you can make tax^*-free switches between debt and equity funds within the ULIP. The maturity proceeds are also tax^*-free, subject to the conditions under Section 10(10D).

Goal Protection

ULIP’s helps you plan for specific financial goals by combining systematic investments, diverse fund options and life cover^{^}. Features like ‘waiver of premium¹⁸’ and ‘family income benefit³’ option ensure that your goals are protected.

Safety switch option

As you move closer to your goal and your time horizon narrows, your risk appetite may reduce. For this, ULIP child plans enable you to systematically move from high-risk funds to low-risk funds a few years before the maturity date. Starting four to five years from your maturity date, you can choose to move all your investment into low-risk funds in a phased manner. This helps to protect your returns from the volatility of the market.

What are the Benefits of Buying Online ULIP plans for your Child?

Below are 5 reasons to buy an online ULIP plan as an investment for your child:

• Systematic investments: You can consistently invest to meet your child’s future needs, whether it is school fees, college tuition or post-graduation expenses.
• Affordable premiums: You can start with small, regular payments that grow into considerable savings over time without straining your current budget.
• Fund options: You can choose and switch between equity, debt or balanced funds to match your risk appetite, evolving goals and market conditions.
• Life cover: In addition to wealth creation, the plan offers life insurance. This provides financial security for your child if something happens to you.
• Simplified finances: With savings, goal-based planning and life insurance bundled in one plan, you can manage your finances more efficiently and with less hassles.

How can a ULIP meet your child's immediate financial requirements?

Although a ULIP based child plan is suitable for long-term goals like higher education, marriage, and more, it can be used as an investment to secure your child in the present too. ULIPs are essentially life insurance plans that protect your child financially in case of an unfortunate event. This acts as a safety net for your child at every stage.

Some ULIP-based child plans, like SmartKid Assure with ICICI Pru Signature Assure offer a waiver of premium¹⁸ benefit that waives off all future premiums towards the plan in case of an unfortunate event. In such a case, the insurance company pays all future premiums on your behalf so that the plan remains active and your child receives the benefits of the plan on maturity. This is in addition to the life cover^{^} provided by the plan. Hence, look for the best ULIP based plan for your child that can help ensure your child’s financial security at all times.

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