Endowment life insurance is a unique type of insurance coverage that’s often associated with a college savings plan. As a client, you decide the amount you want to save every month and the specific period you want the policy to ripen. Depending on your monthly premiums, you get a particular payout, referred as an endowment, after the policy matures. The funds can be used to pay school fees, college tuition, purchase textbooks and much more.
- It’s risk-free
Endowment life insurance coverage usually doesn’t have any investment risk or any interest rate risk. However, when you select virtually safe investments, you risk not raising enough cash for your child’s college because of their low returns. To fully accumulate money for college, make a leap into endowment policies that are sure to yield huge returns.
- It doesn’t measure against financial aid eligibility
When determining about which insurance policy to choose for your child’s college, it’s important to pick one that won’t affect their financial aid eligibility. Endowment life insurance policies don’t count a child’s financial aid eligibility like many college funds coverage do. In the end, this gives people more bang for their “college investment” buck.
- It has a high protection value
Many endowment plans provide added protection value to customers. The protection is given for a small fee, charged from the premium you’re paying. Also the higher the security value, the higher the price of protection. A tip: choose an endowment plan with a small protection value to get huge returns after it matures. Those with a high protection value usually yield small returns for your endowment policy, which can likely end up hurting your ability to pay for college.
In other words, an endowment life insurance policy is an excellent way to save for college. The coverage promises a risk-free, guaranteed return on a particular date which is dependent on your fixed monthly payment. Moreover, the policy isn’t measured against your child’s financial aid status or eligibility—which is awesome! If you’re still uncertain, refer to the three reasons above why you should have an endowment plan policy in the first place.