Insuring dreams – how to ensure financial security for child’s education
What does it take to give your child the best education and ensure the realisation of aspirations and dreams? It’s a question that gives parents sleepless nights and nightmares. And often there are no right answers. All you can do is to be prepared financially as best as possible and to the best of your abilities. Or is there something more you can do?
How about insurance? Yes, you can insure you child’s education? Sure there are no guarantees for anything in life, but that is why there are insurance plans. You insure your life, your health, car, home, travel, baggage, pets; so why not one of the most important things in your life, the education and thereby the future of your child.
There are a number of insurance companies that offer child education plans. Most offer particular features such as endowments, or lump sum payments at the end of an x number of years, investment linked schemes or provide insurance covers for children or parents. What is needed is a comprehensive, systematic, targeted plan that provides for the entire ecosystem of the child’s education. Such as AVIVAs child plans – the Young Scholar Advantage and Young Scholar Secure – 2 distinctive plans that provide for 2 different requirements.
To start with, painting a macro picture from which you can derive micro specifics do help.
The AVIVA site has a financial planner that helps you make a targeted plan, which takes into account factors such as inflation and increase in education costs. This will help you zero in on which plan is suited best for your requirements.
AVIVAs 2 plans cater to 2 different target groups. The Young Scholar Advantage is more than an insurance plan. It is a wealth generator – a market linked investment plan. This is for those looking to increase the base asset with systematic and astute returns through ULIPs. This plans offers extremely flexible features through which one could decide the tenure of investment, tenure of plan, decide what funds you want your money invested in to get best returns or switch funds for better returns. Though best to stay invested for the entire tenure, it also does allow the flexibility to make partial withdrawals for emergencies.
AVIVA Young Scholar Secure is basically a money pool of your premiums, which is provided to the child in timely pay-outs for when needed most – such as tuition fee for high school or to prepare for boards, college admission fee and money for higher education. Here, one is not looking to increase the pool with additional returns, but provides security for your money from any market or economic volatilities.
The insurance factor in both these plans is in preparing for exigencies, such as death or disability of a parent. A nightmare that is in the back of the minds of all parents. If the first x number of premiums is paid, then the child still stands to receive all benefits. All remaining premiums are waived off. Now this is one of the most reassuring factors of the plan, because it is something one can never plan or be prepared for.
Though one cannot predict or prepare for the entire future of one’s child, as Malcolm X, the civil rights activist said - “Education is our passport to the future, for tomorrow belongs to the people who prepare for it today,” - education is the one thing we can give our child as insurance for his/her future, and a good child education plan is the best way to ensure that.
– By Sushmita Arora