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Education
Plan
Education plans
should have the following features:-
-
Education fund
at child's college age -- which allows you to withdraw funds when
your child reaches certain ages such as 18 or 21 years old.
-
Payor benefit
(should
 either
one or both parents die or become incapacitated, the plan runs by itself)
There are 2 ways to fund your child's
education plan:
-
Insurance Education Plan
-
Unit trust
Insurance Education Plan
Insurance education plan's features
normally have payor benefits. One significant advantage of such plan is
that should the contributor die or be totally and permanently disabled,
the future payments due until the plan matures are immediately waived.
The beneficiary will receive the benefits as defined in the plan, i.e.,
the child's education fund is secured no matter what happens.
Another advantage of using insurance
education plan is the tax deduction.
Education Planning through Unit
Trust
However, if you choose to fund your
child education by investing in unit trust, remember to complement it with
an equivalent term life plan, so that should the payor die or become incapacitated,
the there will still be a fund for your child to continue pursue his or
her education dream.
The investment portfolio must also
be monitored closely and rebalanced every year, so that as the child's
age grows closer to his or her tertiary education age, the fund should
be rebalanced to more conservative portfolios.
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