educational insurance

Every year the number of dropouts from schools and colleges are in increasing trend. Even when the students are willing to continue their studies, they are forced to drop their further studies. The reason for dropping the studies can be several like death or incapability of the guardians and the financial problem. So, to secure the students from being unable to pursue further studies, the idea of education insurance has emerged.

 The insurance which is made to manage the amount for the education is known as education insurance. Generally, in this insurance, parents of any children should make insurance for fixed period of time for their education. Parents have to keep the child’s name as his representative. While insuring the children with regard to the education, the parent will need to pay some amount regularly to the insurance company which is also known as insurance premium. After the expiry of the contract or any accident to the parent, the children are given the insured amount which can be used for children’s education. This type of insurance is very much useful to secure the life of the children and the amount received after the maturity would be of great help to the children.

          Education insurance has existed since 1930 with the view of securing the life of the children. It benefits both the students and educational institutions since it may cover the money a student owes to an educational institution like school, college, university etc in case the tuition payer can no longer cover these costs. Education insurance can be obtained through educational institutions or directly from the insurance company. It also can be received as the part of a student loan. Such education insurance may cover the cost of the tuition in whole or even partly if a student has to withdraw from his or her studies due to several reasons.

          Education insurance falls under the category of life insurance as it secures the life of the children in terms of getting knowledge in future. This insurance is usually done for the children by their parents as parents take care of their children and are always concerned about the bright future of their children. With the help of the education insurance, the children will never have to sacrifice their further studies. Education insurance also satisfies or lessens the problems of the parents. It is because they have to pay some regular payments which is usually small amount and in return, the insurance company will provide lump sum amount of money after the maturity period or incase if some unfavorable accident happens with the parents. This will help them from seeking other’s help.

          Education insurance is the insurance which protects the student attending educational institutions    such as schools, college or universities from the financial loss. Students have to involuntarily withdraw from his or her studies due to the medical reasons and the death of the student’s legal guardian. So, the insurance company will either refund or cover the costs associated with attending the student’s institutions. Moreover, education insurance may also cover the loan of the student. In India, banks who are stung by bad loans after lending to the education sector are now buying the insurance so that they can cover the default risk. Under this, the bank will be entitled to receive the entire loan amount from the insurer if the borrower dies. This policy is in the favor of the bank. The student that may be of private school or college or university, he or she can find insurance coverage to help them guard against the losses. If the adequate insurance is covered, it will be beneficial to the student and the families.

          The cost of the higher education is increasing. So the need for access to the higher education and the cost will put the financial strain on the parents. So, it is important to purchase the education insurance policy. At the end of the maturity, the fund will be given which can be used to pursue further education and assures the mishap that happens in the future. This will also help the children to pursue his or her goal in life. As we have known that purchasing an education insurance policy is being essential in today’s world, we have to consider various things before we choose a policy. The amount to be set aside for the children’s education, reasonable premium amount, and flexibility in the education policy so that further savings can be increased are to be taken into consideration when we choose a policy.

          There is no meaning of being successful parent until and unless they secure the life of their children. So, education insurance can contribute lot to secure the future of the children at the right age. Such education insurance can also be used as the long term investment plan which will help to secure the children education. The education insurance acts as the saving tool to provide an account of money when the children reach the age for entry into the collage or at the end of maturity. The funds received from the insurance company can be used to pay for the children’s higher education expenses. Under this policy the life of the children is assured. However, the policy owner is the parent or legal guardian. So, the insurance policy in which the parent pays the insurance premium on regular basis to secure the children from getting education policies is education insurance.