Child Education Insurance Policy
Dads looking for online cheap insurance quotes typically search for cheap car insurance or discount home insurance. But they should also be looking for a kind of insurance that could be incredibly valuable to the upbringing of their young children: child education policies.
A child education insurance policy is a type of life insurance that helps to save and pay for the cost of higher education when the child turns a legal age, usually at 18 years old. The money from such a policy can be used to pay for college or university and other education expenses. The parents or legal guardian(s) own the policy while the child is the one who is life assured.
A child education policy can help children get a head start in saving for college with just a little help from their parents. Contributions to the policy are typically based on regular and flexible deposits depending on financial circumstances and income. Incremental savings accrued by the insurance will grow and compound over time and so the earlier you start the higher the pay out.
When choosing a child education policy, there are many facets to consider. The final cost of your child’s education will depend on a variety of factors. Will your child go to an in-state or out-of-state college? Local or abroad? Public or private? What program and for how long? Will your child have aspirations to pursue postgraduate education?
There are two main types of child education policies available to parents:
1) An “endowment policy” will merge a savings element with protection coverage. Endowment policies are divided into participating and non-participating plans. For non-participating endowment plans, policies do not participate in the fund’s profits but benefits are completely guaranteed. Participating endowment policies are the opposite: only a part of the insurance benefits is guaranteed because the insurance company participates in the fund.
2) “Investment-linked policies” will allow parents and legal guardians to invest the policy’s funds in whatever investments they want.
While endowment policies are safer, investment-linked policies are more aggressive and involve higher risks and no guarantees on monetary returns. One key option that comes with a child education policy is the payor benefit rider. If you opt for the payor benefit rider, your child or children’s education fund will be protected in case you can no longer pay premiums due to death, illness, or disability. The payor benefit rider can be a convenient and simple way to insure your child education policy and grant you and your children peace of mind over education costs.
Next time you are searching or browsing for online insurance quotes, think of your children and consider a child education policy. It may well be the best gift you give your child.
By Erika Stewart