Preparing the future of children is a duty of parents, including you, of course. One of them is planning for children's education funding from an early age, both in the form of education savings and education insurance.
You know, school or education costs increase every year. The high cost of making a head around 7, both the levels of PAUD, kindergarten, elementary, junior high school, especially college. If not prepared from now on, parents can be distressed when the need comes.
You can prepare education funds through education insurance products, in addition to education savings. Obviously the two are different, but now parents are starting to look at insurance education for the future of their children.
If you intend to buy or propose the product, make sure you understand child education insurance in detail, including the risks. This is important, considering the purpose of buying education insurance related to children's education plans in the future.
Do not let the education plan is interrupted just because you buy an education insurance product that is not right. Poor preparation. For that, let's review some of the risks of education insurance that you can consider before buying or applying:
1. Educational insurance is not savings
Remember, when buying insurance products, you will be charged a fixed premium every month. Similar savings plan in a certain period of time huh. But make no mistake, insurance education is not education savings. Generally, this education insurance is a unit link insurance that includes investment in it.
How it works, your collected funds will be invested by insurance companies into various investment instruments or portfolios that they think are appropriate and profitable.
You can get benefits or benefits from the turnover of these funds. These benefits are included in the education insurance benefits. However, you need to know, there must be a risk in investing. Risk of loss or partial loss, even of your entire insurance fund. So, understand this well, moms.
2. Many cost cuts
When you deposit education insurance premiums regularly every month, you will definitely assume if the total funds collected are as much as you have deposited. It might also think the funds will be much greater considering there are investment activities in it.
But make no mistake, many education insurance customers actually complain about this. Where the amount can be much smaller than the premium or funds that you have deposited so far. In fact, not all of your premium funds are rotated by insurance companies.
Usually for the first 5 years, this premium will be deducted with various fees or fees. The amount of this discount is quite large, so the funds invested are not too much. So do not be surprised, if a few years after buying education insurance, the funds collected will be far less than your total premium deposit.
3. Premium payment period is longer than the agreement
The tenor or short period of premium payment is often used as an insurance selling point for insurance agents. But after buying, you have to pay a premium with a longer tenor.
This is very possible, because investment will always have risks. If the investment is not profitable, then your premium payment period must certainly run longer than expected.
4. One chooses investment instruments
When you hang a child's education fund on education insurance, you certainly expect to benefit from investments made by insurance companies. But back again, no one can guarantee whether this investment runs successfully.
It could be that insurance companies choose the wrong investment instrument. The performance of the portfolio has deteriorated, so that instead of profits, there are losses or losses of funds. These conditions will definitely have an impact on the funds that you have invested in education insurance.
5. Not reading and understanding the policy properly
Buying education insurance products, you are planning something important for the future of children. But that desire may not be achieved, if you do not read and understand the entire contents of the insurance policy from the beginning.
An insurance policy is a legal document that contains various rules and other matters related to the education insurance product that you buy. It is important for you to understand every detail correctly, before finally deciding to buy.
Understand the Risks Early on and Choose the Right Product
Applying for or buying education insurance is one way parents plan for children's education funding. But do not just buy without finding out first about the ins and outs of education insurance.
Especially regarding the risks, because this is not a product ta
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