Claim Settlement Ratio of 99.23%~

IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER.

How ULIP Prepares Single Parents Against Financial Uncertainties?

Being a single parent can be challenging. You have to give your child the love of a mother and a father. You have to guide your child, make it a responsible individual, and also give the important lessons of life so that your child grows up to be self-sufficient and knowledgeable.

Investment plans also act as tax-planning tools, as many avenues help reduce tax liability. There are different types of investment plans, and by choosing the right one, you can invest according to your needs and grow your savings.Read Less

Get in Touch to Know More
I agree and consent to the

Terms & Conditions, Privacy Policy

Get Your Life Goals, Done!

Tailored Life Insurance Solutions for your long-term Life Goals.

Written ByPalak Bagadia
AboutPalak Bagadia
LinkedIn Icon
Palak Bagadia, Associate – Digital Marketing at Bajaj Allianz Life, with experience spanning content and performance marketing, recruitment, employee engagement in the BFSI industry.
Reviewed ByRituraj Singh
AboutRituraj Singh
LinkedIn Icon
Rituraj Singh,With over 6.5 years of experience in the insurance industry, Rituraj Singh, Manager- Product & Brand Marketing at Bajaj Allianz Life Insurance overlooks new product launches, compliance, and brand projects, leveraging artificial intelligence and technology to enhance outcomes.
Written on: 7th July 2024
Modified on: 7th July 2024
Reading Time: 15 Mins
Share

Besides the moral and emotional responsibility, you have a financial responsibility towards your child too. Being a single parent, you are responsible for providing your child with the suitable financial resources while the child is growing up.

Moreover, you may also have to plan for a secured financial future for your child, which may not be disturbed if you are not around. Securing your child’s financial future in your absence is all the more important for single parents. While different investment plans may help you build up a corpus for your child, a unit-linked life insurance policy may give you the extra edge.

What is a ULIP?

A ULIP is a life insurance policy that aims to create a market linked investment corpus for your financial goals, in the present case, a corpus for your child. These plans invest your premium in different market-linked funds so that you can earn returns subject to market performance. You get the flexibility of managing your market linked investment as you see fit and even get liquidity through partial withdrawals subject to policy terms & conditions.

Why are ULIPs may be considered beneficial for single parents?

For single parents, ULIPs may be the preferred addition to their financial portfolio, especially while planning their child’s financial future. Here are some reasons why –

1. Insurance + investment = ULIP

The ULIP is a unique insurance cum investment plan that combines the benefits of market linked investment returns with insurance protection security. The ULIP plan allows you to invest in the market-linked funds and assures financial assistance to your loved ones when you are not around.

2. Secured financial corpus through ULIP based Child Plans

  • If your child's financial security is your sole concern, a ULIP based child plan may be your bet. The plan is designed to create a secure corpus for a child’s financial future. Commonly, depending from insurer to insurer, it comes with an option of Waiver of Premium benefit2 which waives off future premiums in case of death of a parent. Thus, the policy continues till the chosen tenure and the fund value keeps growing till maturity, as per market conditions. On maturity, the available fund value is paid.
  • The plan, thus, ensures an undisturbed corpus creation even if the parent dies prematurely. As a single parent, the child ULIP plan may allow you to secure your child’s financial future.

3. Wealth creation through market-linked returns

  • ULIPs have different types of investment funds. Each of these funds invests in securities that include equity, debt, money market instruments, etc. Moreover, the funds have a diversified portfolio and are professionally managed. You can use a ULIP calculator to estimate the returns from the same.
  • Thus, when you invest in ULIPs, you get to invest in a diversified portfolio of market-linked securities. These securities have the potential to deliver returns as the market grows but with risk component associated with it. You can use the ULIP calculator to estimate the expected corpus at conservative interest rates and plan for your child’s financial needs.

4. Flexibility of investment

  • With ULIPs, you get a host of flexible benefits to manage your money and investment. If you need funds for the small financial needs of your child, you may make partial withdrawals after the first five years of the plan are complete subject to plan’s terms & conditions.
  • Secondly, based on the changing market dynamics, you can switch between the available funds to optimize your market linked returns while minimising the associated risks and losses. This is subject to policy terms & conditions.
  • There’s also the option of additional investment through top-up premiums by paying additional premium and the settlement option that allows you to redeem your maturity benefit in instalments for extended returns, subject to policy terms & conditions.
  • So, with ULIPs, you can manage your investments and even draw on them when needed, subject to terms & conditions of the policy

5. Tax benefits

  • Lastly, the tax benefits of a ULIP serve as the ultimate cherry on the cake. The premium paid for the policy is allowed as a deduction from the taxable income. The limit is 10% of the sum assured, subject to a maximum deduction of Rs.1.5 lakhs under Section 80C. This helps you reduce your taxable income and, consequently, your tax liability1.
  • Secondly, switching your investment from one fund to another is also completely tax-free. You don’t pay any tax on the amount switched. The tax implications would be triggered only at the time of receipt upon withdrawal/maturity or surrender in accordance with section 45(1B) of the Income Tax Act, 1961.
  • Thirdly , the death benefit received from a ULIP is tax-free.
  • Fourth, the maturity benefit/partial withdrawal benefit you get is tax-free, provided that the aggregate premium paid for all the ULIPs bought on or after 1st February 2021 does not exceed Rs.2.5 lakhs and policy is satisfying conditions mentioned under Section 10(10D) of Income Tax Act, 1961.
  • These tax benefits can create a tax-efficient corpus, help you save taxes, and increase your disposable income when investing.

Conclusion

The love for a parent cannot be undermined. You love your child and want to give them the better life. However, that may cost money, and while you can toil hard to earn, you may need to secure your earnings too. The ULIP plan may help you do that. It not only allows you to create a tax-efficient, and market-linked corpus but also helps in ensuring financial assistance after your demise. A ULIP based child plan can be the preferred plan for securing your child’s financial future in your absence.

So, consider investing in the suitable ULIP and gift your child a secured financial future.

Source

1https://www.incometaxindia.gov.in/Tutorials/20.%20Tax%20benefits%20due%20to%20health%20insurance.pdf

2https://www.policybazaar.com/child-plans/articles/premium-waiver-benefit/

BJAZ-WEB-EC-01838/22

Life Insurance Guide -Ulip Related Articles

How ULIP Investment Can Secure Your Child’s Future

Over the course of life, you will have many long-term life goals. You may want to save up for the down payment on your dream home, or you may want to invest to meet your retirement goals. In addition to these goals

Read More
ULIP Tax Benefits - How ULIPs Help You Save on Income Tax?

A Unit-Linked Insurance Plan or a ULIP may be an effective way to tick off two elements from your financial to-do list, at once. For the uninitiated, a ULIP is a type of life insurance policy which provides life insurance coverage and

Read More
Why Should You Invest in ULIP?

Unit Linked Insurance Plan (ULIP) is financial tool that combines the benefits of life insurance and investment in one product. ULIPs provide you the option to invest in equity, debt, or a combination of both, as per your risk appetite.

Read More
5 Features Of ULIP You Didn’t Know

Unit Linked Insurance Plans (ULIPs) are fast emerging as one of the most preferred choice of investment for people who have different kinds of life goals. Straight from youngsters who have just started their professional careers

Read More
View More
Disclaimers:
Plus Symbol
Minus Symbol

#Survey conducted by brand equity – Nielsen in March 2020

~Tax benefits as per prevailing Income tax laws shall apply. Please check with your tax consultant for eligibility.

**Past performance is not indicative of future performance.

The above information is for general understanding and is meant to educate the general public at large. The reader will have to verify the facts, law and content with the prevailing tax statutes and seek appropriate professional advice before acting on the basis of the above information.

In this policy, the investment risk in investment portfolio is borne by the policyholder. Investment in ULIPs is subject to risks associated with the capital markets. The policy holder is solely responsible for his/her decisions while investing in ULIPs. The views stated in this article is not to be construed as investment advice and readers are suggested to seek independent financial advice before making any investment decisions. For more details on risk factors, terms and conditions please read sales brochure & policy document (available on www.bajajallianzlife.com) carefully before concluding a sale.

X
Disclaimer

*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.

~Individual Death Claim Settlement Ratio for FY 2023-2024

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

X
Terms & Conditions

I hereby authorize Bajaj Allianz Life Insurance Co. Ltd. to call me on the contact number made available by me on the website with a specific request to call back. I further declare that, irrespective of my contact number being registered on National Customer Preference Register (NCPR) or on National Do Not Call Registry (NDNC), any call made, SMS or WhatsApp sent in response to my request shall not be construed as an Unsolicited Commercial Communication even though the content of the call may be for the purposes of explaining various insurance products and services or solicitation and procurement of insurance business

 

Please refer to BALIC Privacy Policy

X
Disclaimer

%%Above illustration is for Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V03) considering Male aged 25 years | Non-Smoker | Policy Term (PT)– 30 years | Premium Payment Term (PPT) – 30 years | Sum Assured opted is Rs. 1,00,00,000 | Online Channel | Standard Life | 1st Year Premium is Rs. 6,238. 2nd Year onwards premium is Rs. 6,659. Total Premium Paid is Rs. 1,99,349 | Medical Rates | Yearly Premium Payment Mode | Death benefit opted is lumpsum payout and monthly installments (Lumpsum Payout Percentage : 45, Income Payout Percentage : 55) | Premium shown above is exclusive of Goods & Service Tax/any other applicable tax levied, subject to changes in tax laws, and any extra premium and is for illustrative purpose only. This is inclusive of all the discounts mentioned above.

##Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

@Term Insurance plan bought online directly from Bajaj Allianz Life Insurance has no commissions involved.

^^The Return of Premium amount is total of all the premiums received, exclusive of extra premium, rider premium and GST & /any other applicable tax levied, subject to changes in tax laws
Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

close
Ask for an Agent
Sign up for personal visit and tailored advice from our expert agents