For most parents, it is a source of worry to contemplate what would happen to their families, especially their children, in their absence. The cost of education has been consistently rising in the last decade and this has become a concern for many Indian parents. Rising retail inflation is also a cause for worry for many Indian parents who want to ensure a financially secure and airtight future for their children.
This is where life insurance can step in. Life insurance plans such as ULIPs (Unit Linked Insurance Plans) provide a lump sum payment in the event the policyholder dies. That is, children continually get the money allocated according to the terms of the policy. Such plans ensure that children are taken care of in the absence of their children and their future plans are not hampered cause of parental death.
ULIP is a life insurance plan that enables individuals to have the combined benefits of insurance and investment in market instruments. This plan integrates both protection and investment in its features and can be customized based on the particular needs of the policyholder. ULIPs were first brought to India by Unit Trust of India in 1971.
Today the majority of life insurance plans offer products at affordable pricing and multiple features. This can enable policyholders to attain maximum returns on their investments along with insurance coverage.
ULIPs from Canara HSBC Oriental Bank of Commerce offer individuals with plans for fulfilling their goals for their children. For example, with the Invest 4G ULIP Plan, you can make the most of your policy with perks like flexible fund options, a variety of plan payouts, loyalty additions and wealth boosters, return of mortality charges and much, much more. This plan can be considered as a long term investment to protect your children's future. Following are some of the benefits associated with this plan in detail:
With the Invest 4G plan, you can switch between equity, debt funds or a combination of both. You can redirect your investments to align with the market’s highs and lows and ensure your child benefits from the highest of returns.
As your child grows, so would, in many cases, their needs. Thus, you may require financial assistance constantly at certain intervals. In such cases, you can take advantage of ULIPs’ partial withdrawals and settlement options.
Having a contingency plan in the event of your absence is crucial. To ensure your child has the means to reach their potential, even in the face of your unfortunate demise, ULIPs offer a life insurance component. While a portion of your premiums is dedicated to investing in market instruments, another is used towards your life insurance policy.
ULIPs come with a rare EEE (Exempt-Exempt-Exempt) status. This means that everything from the principal investment amount to the accumulated returns and the maturity proceeds are all tax free. This gives ULIPs an edge over mutual funds, which are subject to the LTCG (Long Term Capital Gains) tax, while ULIPs are exempted.
While choosing a ULIP for your child, you should ensure maximum flexibility in fund management, an optimum amount of insurance coverage and flexible payout options. The best ULIP provide great investment options for market linked funds that eventually led to better returns. These funds can contribute greatly to fulfilling the insured individuals children's dreams, that could range anywhere between education related expenses to marriage costs.
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