HOW DOES EDUCATION INSURANCE WORK? IS A BIG QUESTION

Education insurance resembles life insurance in many ways, but is tailored specifically at ensuring the future educational needs of your children are met. Generally, this means that a lump sum will be paid out to your children on an agreed date in exchange for your monthly premiums.

A good education insurance policy will generally take into account factors such as inflation and tax to ensure that your children get the right pay-out to complete their education. Some policies even include extended benefits, such as paying towards your child’s marriage or providing a lump sum for the child to use outside of education needs.

Some education policies will pay out on an agreed maturity date, regardless of your health status. This is generally when your child reaches the higher education age. As such an education policy can be viewed as an alternative to creating a ‘college fund’.