A Guide to Secure Your Child’s Future with ULIP

Every parent wants their child to have the freedom to choose the best education without money standing in the way. In India, higher education costs are rising steadily, making early and disciplined planning essential. If you have the appetite for taking a risk, a Unit Linked Insurance Plan (ULIP) may offer a practical solution for building a corpus that can fund your child’s education.

What is a ULIP and How Does it Work?

A ULIP is a life insurance product that provides both protection and investment. Part of each premium pays for life cover; the rest is invested in equity, debt, or balanced funds chosen by the policyholder. After deducting mortality and administration charges, the balance goes into the selected funds.

ULIPs come with a mandatory five-year lock-in and usually allow a limited number of free fund switches each year. Parents can start with higher equity exposure when the child is young and gradually shift to debt or balanced funds as college nears to minimize risk. This design encourages long-term commitment, ideal for goals like saving for your children’s future, where staying invested for 10–15 years gives compounding a real chance to work.

Why ULIPs Suit Child Education Planning

India’s life-insurance industry is on a growth spurt. The total AUM reached ₹62 lakh crore in March 2024, up from ₹55 lakh crore a year earlier — a sign of increasing trust in long-term protection-plus-investment products.

The benefits of ULIP for child education planning include life cover that pays the sum assured or fund value to the nominee if the policyholder passes away, market-linked funds that offer the potential to grow faster than traditional fixed-return options (past performance is not indicative of future results), tax advantages under the prevalent rules, and the ability to switch from equity to debt as college nears. These features make investment in child education with ULIP a balanced choice for many families.

Four Steps to Use a ULIP for Child Education

Four simple steps help parents align a ULIP with education goals.

1. Estimate the future cost: Current private college fees for a four-year course often start around ₹8 lakh. Using the latest CPI education inflation figure of 3.49% (October 2025)[1], this could rise to roughly ₹12 lakh in 10 years, an illustration only.
2. Choose the right plan: Look for transparent charges, a good mix of equity/debt funds, and strong insurer credentials. The best ULIPs for kids’ education typically allow partial withdrawals after the lock-in and systematic transfers to reduce market-timing risk.
3. Decide premium and tenure: For a ₹30 lakh corpus in 15 years, ₹10,000–₹15,000 monthly at an illustrative 8% long-term return (before charges) is a common starting point. Actual outcomes depend on actual fund performance and overall charges. Use a ULIP calculator for estimating premiums and see how different amounts and timelines can work for your child’s education goal.
4. Review regularly: Check performance annually and shift to lower-risk funds 3–5 years before college begins. This disciplined approach supports creating a child education fund through ULIP while keeping the family protected throughout.

Conclusion

A thoughtfully chosen plan can help secure your child’s future with ULIP by blending life cover with long-term growth potential. Starting early, staying invested, and reviewing choices regularly give parents a realistic chance to meet rising education costs and inflation. When you’re ready, request a free quote or consultation today to explore the ULIP that best matches your family’s goals, time horizon, and risk comfort. Taking this simple step puts you firmly on the path to giving your child the academic freedom they deserve.

Frequently Asked Questions

1. How much premium should I pay for a ULIP for child education?

It depends on the target corpus, years left until higher education, and your risk profile. Illustratively, ₹10,000–₹15,000 monthly for 15 years at a reasonable long-term growth assumption may help build a meaningful corpus. Review affordability, fund choices, and charges before fixing contributions.

2. Is the fund value of a ULIP guaranteed?

No. ULIP fund value is market-linked and can fluctuate based on performance, allocation, and investment duration. Staying invested long term helps reduce volatility impact.

3. Can I increase the sum assured later?

Increasing the original base sum assured is subject to re-underwriting and policy terms. However, many plans allow for top-up premiums (which increase the fund value) or portfolio adjustments based on underwriting, eligibility, and policy terms.

[1] Source: https://www.pib.gov.in/PressReleasePage.aspx?PRID=2189186&reg=3&lang=2