Life Insurance

life insurance

Life Insurance, Education Policy, Savings Plan

A Life insurance policy, either an education policy or a savings plan; is a contract between a policyholder (You) and the insurance company, where the insurer agrees to pay the chosen beneficiary or yourself a sum of money upon maturity (end of the policy) or in case of critical illness, an accident-causing permanent disability and in case of death. Life insurance offers a disciplined saving plan towards a future goal with formulated benefit guarantee.

Education policy:

An Education plan is an Endowment policy meaning it has cash value living benefits. It pays the assured amount on the maturity dates. This policy ensures money is available at the planned time for the purpose set of your child’s education.

As a parent, the best gift you can give to your children is quality education. This requires planning for their school fees from a young age. However, unfortunate events like death, critical illness, permanent disability or financial constrain may hinder this dream hence the need for a life insurance education policy. An education policy can be defined as a school fees savings plan with life insurance protection.

How Can I choose an Education Policy Plan?

There are key areas you need to consider when choosing a child’s education policy:

  • What’s the target amount do I want to achieve/raise?
  • In how many years do I want to achieve this amount?
  • How much money do I save every month to achieve this goal?
  • What’s the age of my child and at what age or level of education do I require the policy benefits to pay?
  • What risks do I want to be covered within the policy eg. Accident, permanent disability, critical illness.

Why you need a life insurance education policy and the benefits of having an education policy.

  • It gives a guarantee that my children education will not be interrupted by an unforeseen misfortune like critical illness, permanent disability, financial difficulties or death.
  • I enjoy the benefit of planning the future education of my children by currently setting aside some contributions as premium in flexible monthly, quarterly or annual instalments in return for lump-sum benefits to pay school fees.
  • I will benefit from a 15% tax relief on the monthly premium contribution up to a maximum of 5,000/= per month.
  • In case of a critical illness or permanent disability e.g.; Cancer, stroke, kidney failure, heart attack or loss of sight, loss of limbs; the insurance waives premium.
  • There are partial maturity bonuses as a percentage of the sum assured and a lump sum at the maturity term of the policy.
  • The policy offers a soft loan after being enforced for a period of 3 years or more in case of an emergency.
  • This policy act as a family protector and gives me peace of mind.

Can I lose money in a life insurance policy?

To enjoy the full benefit of a life assurance policy, it’s very crucial to ensure the premium is paid for the whole premium term of the policy. Usually the 1st three years the policy has zero value in case of cancellation or lapse due to lack of premium payment. After 3 years, the policy attains surrender value or cash value.

What is Surrender Value or cash value?

This is the sum of money you as a policyholder will receive if you cancel your insurance policy before maturity but after three years of being active. This is usually a percentage of the amount you have contributed. The longer the policy has been active the higher it builds the surrender value.

Savings Plan Policy

This is a policy similar to the education plan. The main difference is that it will pay you one payment which is 100% of your contributions plus all interest earned within the term of the policy.

Factors that determine premium in Life Insurance Policy;

  • Age of the policyholder/life assured
  • Premium term chosen
  • Benefits added to the policy (riders) eg, Personal Accident, Critical Illness cover

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