- September 25, 2018
- Education Insurance
- Parents NoticeBoard
Why you need to save for education! Part 3
I believe in always doing what’s best for the kids. If it is possible to give them the best education, then never shy away from taking that opportunity. It will give you a good night’s sleep.
If you choose education insurance, then you should know there are two types of Child Education Policies.
Endowment policy and investment linked policy.
An endowment policy comes in two:
Participating policy and non-participating policy.
For the participating policy, a portion of insurance benefits are guaranteed and the total amount of benefits at maturity is not guaranteed. This is because it depends on the performance of the life insurance company’s fund.
The non-participating policy however does not participate in life insurance funds profits but all the insurance benefits are guaranteed.
The investment linked policy combines elements of investment and protection based on your requirement as policy owner.
1) Flexibility - you can top up as you progress.
It makes aggressiveness possible since you can invest higher amounts as the investment period progresses.
2) Freedom - It allows you to choose funds for investment.
However, with policies the only risk involved is that there is no guarantee on high returns or high interest for your savings. Policies will secure your funds and give you a fixed interest.
If you want higher interest it depends with your provider, because your funds will be used to invest in various capital generating ventures, which have fluctuating returns. They can be higher or lower than what your policy provider projected.
Atleast, you get to choose if you want to risk your funds to get higher interests or be content with a specific flat rate interest.
Investment linked policies could be tricky make sure to be alert.
Find here the list of Kenyan insurance companies with education plans and if joining us for the first time, catch up on part 1 and part 2 for the whole experience package.
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