ULIP for Your Child's Future

Last week Rohan was at his friend Sameer’s place, watching the FIFA world cup with him and his 12 year old son, Aarav. While they were enjoying the match, Rohan couldn’t help but notice Aarav’s knowledge about football. In fact, when this 12 year old threw a few stats at me, it made me doubt my claims of being a hardcore soccer fan.

Impressed with his football knowledge, later when the match got over, Rohan wanted to see how Aarav faired with the ball. So we decided to go downstairs to their society’s football turf. Believe me, the way this young lad tackled the ball was far more impressive than the soccer knowledge he displayed during the match. All this made me wonder if Aarav was one of a kind, or are all kids, these days, that talented?

Anyway, Rohan turned to Sameer and asked him how he planned to nurture Aarav’s talent. Not to his surprise, Sameer was clueless. He said he did realize that his son is extraordinary, but wasn’t sure if soccer could help Aarav build a career. Besides that, he was also unsure of what exactly he must do to help Aarav build a career in soccer, in case Aarav really wants to.

Rohan explained Sameer that a disciplined form of investment will help him to achieve this goal without any hindrance. When it comes to education, the cost of inflation is way higher than other industries. While making any investment you have to keep in mind the appropriate asset class which can help to overcome this inflation. With the current trend of inflation, assuming the cost of education for a professional course is Rs 10 Lakh today then after 15 to 20 years, it could go as high as 45 lakh.

One of the options could be unit linked insurance plans also known as ULIPs. ULIP is the best investment plan for long-term financial goals as it has a minimum lock-in period of 5 years. They provide an investor with the flexibility to invest in individual funds ranging from debt to equity funds.

The new age ULIP like Edelweiss Tokio Life Wealth Plus lets you switch between funds free of charge. It has high rated individual funds that can help you gain maximum benefits from the market’s performance. Edelweiss Tokio Life Wealth Plus has no policy and administration charge which means 100% of the premium amount is allocated to the fund value. It is the only plan where the company also invests with the policyholder in the form of additional allocations which increases at regular intervals. The additional allocation increases every 5 years for the first five years it is 1% p.a. of the premium paid, from the sixth to the tenth year it is 3% p.a., followed by 5% p.a. from the eleventh to the fifteenth year and lastly 7% p.a. from the sixteenth till the twentieth year. This magical touch to your investment helps your money compound at a rate which can offer you maximum returns.

As a parent, one of the main features that can attract you is the rising star benefit where if in case an unfortunate event of death occurs to the policyholder then the nominee not only receives a lump sum amount but all the future premiums are invested in the fund value immediately. So, your child’s dream still remains intact and unshaken because of a financial aid.

When it comes to financial planning for child’s future, parents should choose long-term investment schemes, so that come what may, they cannot dip into the corpus meant for children’s future.