Did you know your term insurance can secure your child’s educational needs?

April 10, 2020
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Craig Fischer
Posted in Finance
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The primary aim of many insurance policies can be to safeguard the future of your loved ones. Amongst the available insurance products, term insurance can fall under the same category. While a regular term policy can only look after your family, the term plan launched recently can provide you with survival benefits as well as fund your child’s educational needs. Therefore, let’s get better clarity on what a term plan is today in detail:

What is term plan?

A term plan is a sub-subject of traditional life insurance that looks after the financial well-being of your loved ones, such as your parents, spouse, and children in your absence. If you want to extend the term insurance benefits to your family members, you should include them as the nominees under your policy. On adding the nominees, the insurance company can provide a payout called death benefit in your absence.

The primary aim of a term plan can be to offer financial security to the members of your family. Apart from financial protection, a term plan can also allow you to secure your child’s education needs. How? Many insurance companies have availed a child education cover as the variant under a term plan that can fund your child’s educational needs. Therefore, let’s get better clarity on how term insurance can meet your child’s educational needs with the following steps mentioned below:

Choose an adequate sum assured value

The selected sum assured amount can allow you to fund your child’s education. Therefore, see to it that you evaluate your child’s needs, consider the fees, and choose an adequate sum assured value that can suffice him in the long run.

Pick the right add-on covers

Riders can play a significant part in your term insurance since it can enhance the based policy. Check with your insurer about the available types and make a selection accordingly. Moreover, choose only the relevant riders based on your requirements. If you buy excessive riders, the term insurance premium can increase.

Select the policy tenure

If you want to cover your child under term insurance even in your absence, opt for a long-term tenure. Ideally, you can select between 15, 25, and 35 years of duration for your term policy.

Consider the premium payment frequency

Since you could be the primary policyholder, you might have to pay the premium until your child settles financially. Therefore, choose the premium payment wisely based on your current financial status and convenience. As a policyholder, you can make the premium quarterly, monthly, half-yearly, or annually.

By now, you might be aware of how you can buy term insurance to satisfy the educational needs of your children. As a parent, fulfilling your child’s educational needs can be one of the primary purposes of purchasing a term policy. However, there are other benefits under term insurance that can make it a value-added inclusion to your financial portfolio. Let’s understand the top two key advantages of a term plan mentioned below:

Comprehensive cover

Under term insurance, you can receive death benefits as well as survival benefits under a single plan. While a death benefit can protect the needs of your family in your absence, the survival benefits can allow you to lead a smooth retirement period in the future.

Competitive premium

A term plan can be one of the most affordable forms of an insurance product. Although it is relatively cheaper than other insurance products, you can use the following ways to buy it at a minimal price:

Buy a term policy when you are young

Since you can be physically fit at a young age, your insurer can charge you with a relatively low premium.

Opt for an online term plan

An online term plan can be purchased directly from your insurer’s website. When you buy a term policy from your insurer’s online portal, you wouldn’t be eligible to pay the additional commission or external charges of the insurance agent. Hence, the term policy can be available at a cheaper rate on the online platform.

To sum up, the term insurance benefits can go beyond the financial protection of your loved ones. Therefore, identify your financial requirements and choose the right type of term policy that can align with your goals.