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Finding the best child education insurance is a way for parents to prepare for their child’s school fees, which always increase every year. For parents, education funds always make you nervous. Because the number is large, it drains the pocket and the desire to provide the best for children.
How to choose the best education insurance that is good and reliable? What is the best child insurance option? Is Unit Link suitable for education insurance, child insurance?
When a new child was born, I looked for information about school fees. Between shock and disbelief at the fantastic cost of entering schools in Jakarta.
According to research, the average increase (inflation) in the cost of education is 10-15% per year in Indonesia. With this high rise, parents need proper planning.
I learned that education fund planning is very important. Planning is important because education funding must be started as early as possible so that savings are not burdensome.
One of them is choosing insurance for children’s education, insurance for children.
The type of education insurance for children that parents believe, with the help of insurance agent promotions, can help meet the funding needs for children’s school fees.
I’ve been in this position too. Received many educational insurance offers.
Almost all insurance companies offer this type of child insurance. U name it, starting from Prudential, Manulife, Allianz to banks such as BCA, BRI, Danamon and others.
And I’m confused which one to choose. Because everyone says, their products are the best.
Choosing the Best Child Education Insurance
From experience, I learned that, as a prospective education insurance policy holder, parents must seek a lot of information, listen to second opinions and study the offers carefully, in order to get the best child insurance product that can meet their needs.
Here are 5 tips for choosing the best child education insurance, getting a good education insurance:
1. Amount of Funds According to the Target of Education Costs
The purpose of taking out children’s education insurance is so that when children enter school, parents have sufficient savings to pay for school fees.
In order for the funds from the child’s education insurance to be sufficient, according to the educational needs of the child, parents need to do the following:
First, have an idea which school your child will go to. Because by knowing which school to go to, parents can calculate how much it will cost to enter the school.
Second, find out how much the increase in school fees at the targeted school is. Because the important information that parents need is the school fee later when the child enters.
Third, calculate how much school fees will be when the child enters school. This is a simple calculation in excel using the Future Value formula.
2. Understand the Risks of Education Insurance
In education insurance, insurance companies will invest premium payments made by parents into certain investment instruments.
This instrument is chosen by the parents or assisted by an insurance agent.
How to determine a good education insurance?
What is important for parents to understand is that every choice of investment instrument has risks.
That means, it is possible that the fund target listed in the child education insurance proposal, which was submitted by the agent and read by the parents, was not achieved.
How big is the risk?
The risk depends on the type of instrument selected. Stocks are the highest risk instrument, while the money market is the lowest.
The important thing is to choose an instrument that matches your risk appetite or ability to accept risk. If you can’t accept fluctuations in profits, don’t take high-risk instruments. Vice versa.
Below is a risk table presented by one of the insurance companies, it can be seen that each investment instrument has different risks:
3. Don’t Easily Trust Insurance Agents
This in no way means I am hostile to insurance agents.
I believe in them!
However, the important thing to remember is “trust but verify”.
This means that all information about insurance for children submitted by the agent is verified or a second opinion is sought.
Now is the era of openness, transparency, parents can easily find information on the internet about education insurance for children as cross-checking material.
Why do I suggest being critical and skeptical of agents on proposals and educational insurance policies because after all the agent’s goal is closing purchases by paying insurance premiums.
In my experience, because they want to close, agents tend to convey good facts and information, while the actual risks faced by policyholders when buying education insurance are not clearly conveyed.
Maybe not all agents act like that, but based on experience, the majority do
do that thing. Therefore, it is always better to cross-check the information submitted.
Cultivate reading education insurance policies!
The insurance company provides a 14-day opportunity for the customer to read the education insurance policy and within 14 days the customer can cancel the policy without being charged (the premium is fully refunded 100%).
4. How much is the insurance coverage
In a child’s education insurance policy, the risk that is protected is a disaster for the breadwinners, namely parents, who cannot pay for school fees.
The existence of education insurance makes the continuation of children’s schooling guaranteed because there are insurance companies that continue to provide a living if there is a risk.
How much does the insurance company cover in the event of a risk?
This amount is reflected in the sum assured. Funds that will be paid if the insured in the insurance policy has an accident.
A good education insurance provides adequate coverage.
Check in the education insurance policy book about the sum insured (UP).
The problem is, many parents do not pay close attention to the amount of the sum insured when choosing education insurance. Focus more on how much funds can be withdrawn from insurance when the child enters school.
5. Not Only Education Insurance
If you pay attention, the education insurance feature consists of two main components, namely investment to finance school fees and insurance to protect children from the risk of their parents being struck by a disaster.
Both components do not have to be purchased through education insurance. Can be done in other ways.
First, make your own investment (without going through education insurance). There are many investment options that can be done, one of which is Mutual Funds.
The advantage of investing on your own is that parents don’t have to pay commissions to insurance companies. That is, the money invested can be greater by directly doing it yourself than through an insurance company.
Second, buy insurance to protect the lives of parents instead of the risk of death. The insurance purchased is pure or traditional insurance with no investment frills.
The advantages of pure or traditional types of insurance are low premiums with high sum insured. Very suitable for school children’s education fund.
