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Medical Video: Child education plans/ Life insurance for children
The sweet bitter experience of being a parent has its own way of changing one's life on a scale that is not playing. Now, you are responsible for the lives and welfare of others. For that, you will make sure you get everything the best for your beloved little one.
One topic of parenting that should not be ignored by parents - both new and skilled enough - is planning the child's future. Parents must begin to consider what type of insurance insurance is needed to ensure the child's future smoothness.
Because there are so many types of child insurance offered on the market, it's natural for you to feel confused and overwhelmed when you first find out what you have to do. Frankly, many of us adults who are still confused in determining which life insurance policies are good for themselves, let alone determine plans that concern our children's long-term future.
In this article, we hope to help make it easier for you to learn about children's educational insurance that you might consider.
What is child education insurance?
Child education insurance is an insurance product specifically intended as a savings medium to provide a supply of funds for children's education costs, as well as protection for term life insurance for children.
In other words, the insurance company as the guarantor will pay the insurance money (claim) from your insurance savings if you die, while your child still has to complete his education. Insurance funds will still be given if parents die without having to pay premiums anymore.
The funds raised can be used to fund the expenses needed around the university and higher education. With this insurance, the child is the guaranteed party, while you or your partner are the insured (policy holder).
Why is child education insurance important
The cost of education is increasing every year. The need for access to a higher level of education and the costs that follow it will place a financial burden on you and your family. That is why it is important to start planning children's education as early as possible, because as soon as you can get started, the more time available to develop your savings.
Child education insurance policies will provide the funds needed by your child to pursue education as high as possible, while ensuring that whatever happens in the future, he still has the means to fulfill his life goals.
Educational insurance for your child will be registered in the name of one of the parents who is the main breadwinner in the family. Every month, you will pay a large amount of premium, which is arranged based on several considerations by the insurance company.
You should enroll your child in education insurance when he is a child, because the smaller the age, the smaller the premium that must be paid. In addition, the age of parents is also a consideration in calculating premium costs. If you enroll in education insurance when you are still young, the insurance will assess that you have a serious intention to educate your child up to college, and chances are the amount of premium you pay will be greater and continue to run for a period of time the longer one.
Choose the best child education insurance
When considering the choice of an education insurance policy, always:
- Make sure you get education insurance from a bona fide and trusted insurance provider.
- Make sure you consider the facilities and benefits, and disadvantages, of each choice of your insurance company.
- Consider the amount of money you want to set aside for children's education planning.
- Make sure that the premiums offered are affordable for your financial capabilities.
- Choose policies that can give you flexibility, so you can increase the amount of savings gradually over time, or disburse insurance claims quickly and easily
- Make sure the programs offered are in accordance with the benefits promised. That is, the value of insurance savings must be in accordance with the estimation of your child's school funds.
- Make sure that you consider the payor benefit rider option.
If you choose an education insurance policy with a payor benefit rider option, the policy also guarantees that, following the death of the policy holder, the child receiving the insurance claim will have access to funds to help him finance the study.
The following are the main choices of education insurance that you can make as consideration, quoted from Pay attention:
1. Unit Link (education insurance)
Unit link insurance is the most common type of educational insurance. This insurance is a combination of insurance and investment benefits. In addition, this service also provides various additional facilities, such as: chronic diseases, income replacement, health insurance, and various other facilities.
The premium that has been paid by you as the insured party will be invested by the insurance company in another form, henceforth the investment unit will be managed by an investment manager in various investment instruments (equity, bonds, or money markets, for example) that you have chosen before. The results obtained from the investment unit will be used to fund insurance costs and other costs, and the difference will be the property of the Insured who will be disbursed in the form of education funds.
Some things you should know about unit link insurance:
- Premium costs will increase every year, and most likely this will not be listed or explained in your education insurance proposal. In general, insurance proposals will only include the amount of fees in the first year only. The reason is, these costs will be deducted through the investment units that you have each year.
- Cutting insurance costs will be adjusted to the investment performance you choose from the start. In other words, the return on investment funds will be uncertain, while the large nominal discount determined by the insurance is certain. In short, if the investment market drops, you will be required to bear additional funds because the investment returns are not enough to cover insurance costs. If not paid, the policy will be lost, so that all the benefits will also be forfeited automatically.
- Every additional insurance will be charged an insurance fee. This fee will automatically reduce the portion of your investment by cutting education funding.
2. Term life and mutual funds
When considering this type of insurance, understand that there will be a separation between life insurance and investment. Protection for the heirs of your insurance (your child) will be carried out by buying term life, while other funds will be placed in mutual funds.
In short, you as a policy holder are required to be able to take care of mutual fund investments independently. You can start to learn and understand the procedures for investing in mutual funds first before starting to apply for this insurance. In addition, you are also required to purchase term life insurance for which the premium is expired.
Some things you should know about this insurance:
- The investment results that you get will be higher, because the pieces applied are much smaller than the unit link
- The ease of choosing an investment manager, because there is no bond to one particular company.
- Term life insurance is a type of life insurance that provides the highest value of coverage with the lowest premium value.
- Ease of mutual fund investment. You can do mutual funds and monitor them online, with the lowest nominal investment starting from Rp. 100,000
To choose the best education insurance for your child, there are a number of tips that you can follow or take into consideration. Most importantly, learn the value of protection and investment. These two things are factors that must be considered when choosing education insurance.
It is important to know how much protection or protection in the form of Sum Insured is obtained if you or your spouse as the Insured dies, has an accident, or has permanent disability, so that the child can still attend school without worrying about school fees. The investment that accompanies education insurance, even though it is more risky than education savings, promises a higher potential profit, which is more in line with the high increase in education costs. Learn more about the types of investments that might be offered accompanying an educational insurance product.
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