Insurance Policy

What's An Education Policy?

It appears that these days, “insuring” the children's education is an option for many parents. Despite the generally cautious attitude about spending, education saving plans are highly valued and will be maintained as far as possible.

Almost all the major insurance firms here offer some form of education policy. Some, like NTUC Income and Prudential, offer specific policies for children's education, while others like John Hancock, GE Life and AIA tailor endowment policies to fit their client's needs.

An education policy is essentially an endowment policy, where the owner pays premiums for the term of the policy, which may be from 10 to 24 years, and receives a lump sum at maturity. Some of the policies pay out a sum of money once every few years, normally three years.

This payment comes in handy if you require some funds during the term of the policy, eg, if you want to send your child for those extra courses (piano, computer, etc). In fact, some companies, like John Hancock, have tie-ups with child education and enrichment service providers.

The main benefit of such an endowment policy is the coverage and payer security that it provides. If the parent dies, is permanently disabled or is struck with a major illness, all future premiums of the policy will be waived, and the child gets the amount insured at the end of the policy.

Who offers what

Saving for School-1

Insurance Policy-2

Endowment Policy-3