The Difference Between Education Savings and Education Insurance ~ Akademi Asuransi

Although often considered the same, it turns out that the definition and concept of education insurance is different from education savings. Education insurance is a financial product that offers financial protection for children’s education in the event of a risk. Meanwhile, education savings only offer benefits in the form of a means of saving money and low-risk investments that are intended for educational purposes.

Below are some of the basic differences between education savings and education insurance.

Education savings

Savings interest is only around 3-6% so it is more suitable to be invested in the short term between 2-5 years.
There are administrative fees charged to customers as well as regular bank savings.
There is insurance covered by the bank, but the sum insured is small.
The level of risk is small.
The process is easier.

Education insurance

The results from raising funds can be greater than education savings, because your funds are invested by insurance companies
If the insured dies, the heirs will receive dependents plus the investment returns. Suppose you are registered with a dependents policy of 100 million, with a maturity of 10 years of saving, but for some reason you die when the maturity of your savings is only 5 years. Then the heirs will get funds amounting to 100 million plus the investment value managed by the insurance company from the premiums you pay each month.
This investment is long term, because you will not get investment returns in the first 5 years, after the first 5 years you will get investment returns.
The acquisition cost charged is relatively large.
The risks faced are greater than education savings.

So, which one do you prefer?