Education savings, or as any other savings plans, including into savings deposits which are financial products issued by banks. Therefore, education savings guaranteed by the Deposit Insurance Agency or LPS, which means that if you later case of the bank where you save a bankrupt, the value of your savings are safe.
On the other hand, unit-linked insurance product is not a bank and is not guaranteed by LPS. Is a unit-linked insurance product insurance company. If you find this service at the bank, then the bank merely acts as a sales agent unit link. In principle, the savings is the ideal place to maintain the integrity of the capital. In contrast to unit-linked insurance whose function is to focus on two aspects, namely as a guard at a savings or investment.
Later, education savings is a savings deposit products which typically have a term of 2 years and over. With education savings, you must deposit a sum of money every month on a regular basis until the maturity date. Another story with insurance education. Basically, this product is a combination of savings and term life insurance. The system works is to collect funds from customers and take advantage of the savings balance as collateral for the education of children. For example, upon entering elementary school, junior high school or college, the insurance company will issue a sum of money taken out of your own savings balances to finance the educational purposes. And if the old man dies, the savings automatically deposited and education expenses can still be guaranteed.
If you save money in a savings or education savings plans, the level of benefit or interest you earn interest necessarily compatible with the provisions in accordance with the agreement. So, by saving money on education or savings plan, you will earn interest income that has been set and the savings that you will not likely be reduced.
Instead, return or profit rate that you get on unit-linked insurance education is not defined or is not fixed. It is influenced by the performance of the investment and the risk of the investment itself. For example, if you choose a stock mutual funds as an investment instrument, the rise and fall of stock prices and capital market conditions will greatly influence the fluctuations in the value of investment funds in unit-linked insurance you.
Therefore, the return you get from unit-linked insurance can be low, remain, or even increase. There are other advantages offered by the unit-linked insurance is their chance to double the savings. Therefore, if you are the type of aggressive in investing, then there is no harm in also choose unit-linked insurance education as a vehicle collateral for the education of children.
From a research by ZAPFIN Research Division, found that the average increase in the cost of education in Indonesia reached 15% per year. Seeing the fact that the education savings only provide about 6% per year on the principal fund, the sense-it would be difficult to achieve educational goals with savings. Conversely, if you choose an insurance then there would be a factor in investment performance and market volatility that makes the return so uncertain because the value of shares can go down at any time.
Indeed, preparing education fund is not easy. But it would be better if you prepare as early as possible. If so far you already have an education savings, then the question is what investment vehicle you use, the time period is right or not, and so forth. In time, the success of your plan in setting up education funds, greatly depends on the strategy that you do early on. Therefore, if it should be necessary then to use the services of financial planners is highly recommended.
Before you drop a second choice among financial products, it helps you to know the profile of the product. For example, savings and insurance products has features that are very different in terms of protection and reciprocity. The value of the insurance protection or education savings plans generally below link unit. This happens because if you follow the education savings, you will automatically be exempt from the cost of premiums. The premiums paid by the banks, so that the amount of coverage is also limited. Meanwhile, the level of protection offered by the unit links tend to be higher because you also have to pay a premium. The level of coverage provided by this link unit depends by how much you can afford to pay the premiums.
If you are still free to choose a financial product that is appropriate to your financial goals, whether to choose a savings or insurance, then a brief description of the profile of both products you can learn the following:
Suitable for short-term savings education fund, which is generally 2 to 5 years.
Because savings products, then there is great interest, but only the administration fee.
Although savings products, but still there is a combination of insurance benefits, namely life insurance only, does not include health insurance. In this case, if the insured dies, the heirs receive funds amounting to nominal those stated in the contract, as well as protect against the risk of death resulting in the cessation of routine deposit savings can be anticipated.
Flowers are usually given the range of 3% to 6%.
Used as a long-term savings, generally a period of time ranging from 10 years to save.
This product gives more protection benefits, so not only have the benefit of life insurance, but also health insurance, which in case of disease risk and to be admitted to hospital, the hospital costs covered by insurance companies.
Due in part to investment, the allocation of a given interest rate much greater than the savings on education which ranges from 15% – 23% per year.
One interesting feature is the protection against the risk of death in the cause of your deposit insurance premiums is suspended child education funds not received in full, then the insurance company guarantees the education fund will still be given. By taking insurance education means your savings and take out a life insurance simultaneously. For parents who want to buy life insurance and a separate children’s education fund education insurance product would be ineffective in the preparation of children’s education fund.