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Home > Customer Education > Life Events & Stages > Childrens Higher Education

Life Events & Stages

 
Introduction

As a caring parent you would always want your child to get the very best. To ensure that you fulfill dreams that you may have for your loved ones, financial planning for their secured future is very important.

With growing standard of living, the expenses for educating your child are rising. If your wish to start planning or saving for your child’s education expense in advance, it always helps to look at insurance as one of the investment avenues. It is a guaranteed product that delivers at the time your child needs the money.

Insurance and Your Children’s Higher Eduction
Like every parent, you must have dreams for your child with the best education. Life Insurance provides you with financial support for your child’s education in case of any unforeseen events. With proper financial planning, you can also grow your investments catering to even bigger dreams of your child.

The objective of an insured parent should be to provide for his family’s every day needs as well as provide for his child’s future expenses such as education and marriage. Many insurance policies provide money to you or your child when they are in the age group of 18-26 years.

How much life insurance do you need?
There are two ways of providing for your children
- You insure yourself for a large sum that provides for your children’s future expenses, along with the rest of your family’s expenses for the future.

- In addition, you provide for your child’s future expenses through an insurance policy (in addition to other investments that you may be making) that will ensure she/he receives money at the age you want them to, in your presence or absence.

Some questions to consider when calculating your level of life insurance coverage:
- What are your financial goals? In terms of your present requirements, your savings, your financial aspirations - in terms of buying a car, or owning a house if you are living in a rented home, etc.

- In order to reach your goals, what other financial planning strategies do you have in place? For example, if you are planning to buy a house after 2 years, then how much money will you need to make a down payment (if it is financed through a loan)? Can your investments be liquidated at that point in time?

- Do you want only enough insurance for your survivors to get by financially, or do you want to have enough to encompass higher education and/or spouse’s retirement requirements?

What should your children’s policy cover you for?
If you are the parent/guardian who is going to pay premium for your child’s policy, ensure that your policy offers you

- Waiver of premium - In the event of your death or an accident that disables you permanently, this clause is available to the insured parent, where no further premiums need to be paid.

- Money guaranteed at a certain age - The objective of a children’s policy is to ensure that the child receives a certain lump sum amount of money at a fixed age. Hence, if the parent dies at an early age, the policy should continue, where no further premiums need to be paid and the child should still receive a fixed sum of money at a particular age.

- Policy should not cease upon death of the insured parent or guardian - Few policies offer the sum assured plus the bonus for the term and discontinue the policy from thereon. Please ensure that if the objective of your purchasing a policy is to provide your child with money at a certain age, your policy does not discontinue in the event of your early demise.
 
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