Thu, 07 Dec 2023

How to Plan for Your Child's Education with ULIPs?

07 Sep 2023, 15:08 GMT+10


New Delhi [India], September 7: Giving our children the best education to secure their future is essential as a parent. To do that without worrying about the financial constituents requires thorough financial planning. When you start financial planning early, it will guarantee your child's education and a successful future.

Utilize the power of compounding to secure your child's future by considering investment options like unit-linked insurance plans (ULIPs). ULIPs are a great investment tool to support your child's educational goals since they provide a unique combination of investment and insurance, making them an all-inclusive financial tool.

Understanding ULIPs

ULIPs are a type of financial instrument that combines the advantages of insurance coverage with the potential for investment growth.

Unit creation is integral to the idea of ULIPs. In a ULIP, the premiums you invest are split into two parts: one for life insurance and the other for investment in various assets such as debt, equity, stocks, and the like. When the ULIP provider receives the premium, it will be used to purchase units at the current net asset value. The number of units created will depend on the premiums we can afford.

Dual Benefit:

Their biggest attribute is the dual benefit of being able to finance your child's education through insurance as well as the chance to gain profit from investments that ULIPs provide. This will allow you to grow your wealth and, at the same time, secure your child's future.

Assessing Education Expenses

Every facet of financial planning requires a thorough analysis. When it comes to estimating your child's future educational expenses requires taking into account various factors such as current course fees and inflation rates into consideration. There is always the additional cost of lodging, books, supplies, and extracurricular activities.

Estimating future educational expenses has become much easier using online school calculators or simply consulting financial advisors. To curate a substantial education fund to cover the cost of education in the future, start planning and investing as early as possible. Keep track of the goal, and modify the investments by conducting routine assessments.

ULIP Calculator for Education Planning

You can use the ULIP Calculator, a financial planning tool, to analyze how much to invest in Unit-Linked Insurance Plans (ULIPs). Curating a personalized investment strategy is best by considering risk tolerance and inflation. The calculator offers a visual expression of prospective outcomes as it allows flexible input adjustment.

Benefits of ULIPs for Education Funding

*  Potential for Market-Linked Returns: ULIPs allow you to earn higher returns through investments in equity, debt, or balanced funds.

*  Flexibility to Switch Funds: ULIPs allow investors to switch between funds based on market conditions, optimizing investment performance.

*  Life Cover for Financial Security: Life insurance coverage ensures your child's education funding remains secure in case of the parent's demise.

*  Tax Benefits: ULIPs offer tax deductions on premiums and tax-free maturity proceeds, making them tax-efficient for education savings.

Aligning ULIP Investment with Education Timeline

A smart way to ensure that funds are available for your child's future is by aligning your ULIP investments with the education timeline for your children. To align ULIP investments with an education timeline, follow these three steps:

1. Start with determining the exact education timeline.

2. Choose the ULIP plan that is most beneficial for your needs.

3. Monitor your investments regularly and make modifications as and when required.

Monitoring and Review

You must continuously monitor your ULIP investments to ensure that your investments are on track to reaching your goals. Adjust your investment strategy, as there might be constant changes in the market conditions.

It is important to monitor your investment as it helps keep pace with inflation and mitigate risks. As a parent, you can secure your child's future education by making necessary adjustments.

Tax Benefits of ULIPs

Take advantage of the tax benefits under Section 80C and Section 10(10D) of the Income Tax Act. Under Section 80C, the premium paid towards ULIPs is eligible for a deduction of up to Rs. 1.5 lakh from taxable income. The maturity proceeds from ULIPs, received upon policy maturity, are also entirely tax-free under Section 10(10D).


Plan for your child's education by determining the education timeline, assessing risk tolerance, starting early, and choosing appropriate investment options within the ULIP. Reviewing and adjusting the investment will help you reach your goal in time.

ULIPs for your child's education planning offer the benefits of insurance coverage, investment growth, and the potential for wealth creation and tax benefits.

Accelerate your financial planning by being proactive and investing early in ULIPs to secure your future. ULIPs provide an all-inclusive solution for education funding, offering financial security, growth potential, and tax benefits-all of which contribute to a bright future in education for your child.

(Disclaimer: The above press release has been provided by VMPL. ANI will not be responsible in any way for the content of the same)

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