Welcome to FundooMoney, your 24X7 buddy for all your money matters. Life insurance companies offer child plans to save for the future expenses of children, especially higher education. A variant of the child plans is children’s unit linked insurance plans (Ulips).They use your premiums to provide life insurance coverage and help you buy units in a fund of your choice as you invest for the child’s future. A major attraction of Ulips is that they help you invest in equities and benefit from its growth during the long Ulip term.
The question then arises is about the features you must look for, while buying such an Ulip. Here, we provide you with a list of such key features. So, stay tuned.
Securing child’s future needs Any child plan, especially a child Ulip should be able to ensure adequate financial support for your child’s major future needs such as higher education. You need to have an adequate life insurance amount or sum assured and the right policy term, so that the money is available when it is needed.
Uninterrupted premium payment The child Ulip needs to have features to keep the policy in force even in the event of untimely demise of the insured parent. The money saved by such a parent is unlikely to suffice for future needs. Life insurance companies have child Ulips a premium waiver feature where full premiums are paid by the company till the end of the policy term. Ensure that your child plan has this feature.
Regular financial support The child Ulip should not only offer premium waiver feature but should also offer a regular financial support in case of demise of the insured parent. In the event of loss of regular income such regular financial support helps the child meet regular expenses.
Investment growth You need to account for rising costs, especially educational costs, while buying a child plan. You need to have a savings target and the child Ulip should help you achieve it. To do that, you need your money to grow at a fast clip over the long term.
We hope you found this useful. What are the other features that one must look for in a child plan? Do share with us your thoughts in the comments section. For more such actionable personal finance information and regular uploads, subscribe to our channel. Also, visit our website, download our mobile app and stay connected with us on Instagram, Pinterest and Slideshare.
