Education Savings, Insurance education, or self Savings

Insurance Education

Insurance education and education savings has the same characteristics, they both have the function of protection and investment are both extracted adjusted to the schedule of school children.

Insurance education serves as an investment by managing and invest some of the premium you pay. In return, the insurer will provide some funds with the amount of the amount and timing of payments has been agreed in the policy.

This insurance also provides protection function by taking the risk of death over you, that is promised a certain amount of money if you experience death. Usually the sum assured provided tailored to children's education expenses that have been agreed in the policy. Polis becomes free of premiums, the availability of funding education is also guaranteed, and keep it running. You also can add a rider that provides benefits if there is a risk of total or partial disability, accident or critical illness.

Some things you should consider when buying insurance education:

1. The insured is the parents, not children, because that is protected is the availability of a sum of money to save for education expenses from income parents. So, whether parents or not, education funds should remain available.

2. The target is the availability of funds for education, not the magnitude of the sum insured. Should set a target to go to school where and how much will it cost needs to take into account inflation. Useless insured money (compensation) is high, but insufficient funds to schools. School funding needs are real needs, while new liquid compensation if the conditions are eligible, for example if a parent dies.

3. Note also the due date of payment of funds for education. Do not let the payment date falls after the children finished school.

4. Make sure if the parents are exposed to the risk of death or permanent disability, premium payments automatically suspended while all the benefits of education funding must still be paid as scheduled due date.

Education Savings

RESP is a savings product from banks that have characteristics similar to insurance education. With education savings, you save a certain amount of money on a regular basis. The amount of your monthly savings target is calculated from the education fund will you take later. To ensure the future availability of funds for education, the bank worked with insurance companies to ensure your deposit although there is a risk of death.

How much should you set aside savings each month will depend on how your needs in the future. For example for your children's education fund, do the calculation of how the funds are needed and when it will be used. Next, calculate roughly how much to save. Then make also a reserve fund in your savings of about 3 to 12 times your salary. No need to insist that the education fund and reserve fund should be formed immediately. Set aside just naturally so you reach your savings goal, without having to sacrifice your life now.

If there is a risk, then there is only pass the savings bank that you do during the time period you set earlier. There is also a bank that provides reimbursement of up to 300 times the monthly savings. In general, replacement only happens when you die. Because the type is savings, not insurance, you can not add a rider to protect the risk of total or partial disability, accident or critical illness. When do you need protection for the risk of the above, you should have insurance that protects it.

Independent Savings

If your choice is to prepare the education fund by saving on their own, then you should consider the risks that might occur that might impact on not achieving the desired goals of education funding. Some of the risks that should be considered, namely layoffs, illness, accident, disability and even death. You can also prepare for education funding in the form of other investments, but be sure to have a high level of liquidity.

When you select a standalone savings, when you're not biased work for example, you can stop the advance of savings to fund education until you return to work. This can not be done when you choose an insurance or education savings, where the premiums or savings must still be paid according to policy or agreement that has been made.

However, it should be remembered, when you stop the independent savings to fund education as long as you do not have jobs, will result in not achieving the expected targets of education funding. Therefore, after returning to work you need to enlarge the amount of savings, so as to cover the shortfall due to delays saving because it does not work.

Some financial planners advise families, if you save money on their own education, you should take life insurance that has a sum assured in such a way, so if there is a risk of death, the spouse or heirs can get the sum assured of the company's service insurance as needed.

It needed a comprehensive plan, to be able to view all future funding requirements and needs protection to keep the risks that might occur. Because of the complexity of a comprehensive family financial planning, then you can request assistance from financial planners consulting existing family. That way you can look at your family's finances in a broader sense, not only to the extent of planning education fund for your children.

After understanding all three forms of investment for the education of your child, now living you choose, which one is best: insure, open education savings, or savings independently.