Education Insurance Awareness Essay Example for Free

Education Insurance consciousness EssayAn Overview In 1965, Yarri proposed the go for of brio indemnification to insure against lifetime uncertainty resulting for the mortality put on the line of individuals. Premature death of a family passing play go off bring serious pecuniary consequences for the surviving family members because the family heads earnings atomic number 18 lost forever leaving unfulfilled financial obligations, such as dependents to support, children to educate, and a mortgage to repay. Life policy allows individuals and families to sh atomic number 18 the risk of premature death with many others and to palliate the financial loss from the premature death of the rimary wage earner (Garman Forgue, 2006). The purchase of life redress is star of the most important purchasing decisions for individuals and families (Anderson Nevin, 1975) and it is a critical cistron of a long-term financial syllabus (Devaney Keaton, 1994). 2). Introduction to Child Education Insurance Policy A child pedagogics policy is a life insurance product specially designed as a savings tool to endure an amount of gold when a child reaches the age for entry into college normally 18 days doddery and above.The funds can be utilised to partly meet a childs higher pedagogy expenses. Also, if purchaser opts for a payor benefit rider, an reading policy provides the assurance that, in the event of an untimely demise of the parents or healthy guardian, the child will have access to funds to help finance his or her pedagogy expenses. Under a child education policy, the child is the life assured, while the parent or legal guardian is the policy owner. 3). Types of child education policies useable in life insurance market. There are two main types, i. . an endowment or investment-linked policy. The difference between the two lies in the structure as swell up as the nature of investments. 3. 1) Endowment policy is an endowment policy combines a savings c omponent with protection coverage. Endowment policy may be either participating or non-participating. As the number implies, non-participating policy do non participate in the life insurance funds profits only if all insurance benefits are fully guaranteed. On the other hand, for participating policy, a portion of insurance benefits are guaranteed.However, the ultimate amount of benefits at maturity is not guaranteed as these depend on the public presentation of the insurance companys participating life insurance fund. 3. 2) Investment-linked policy is an investment-linked policy combines the elements of investment and protection based on your requirement as the policy owner. It offers flexibility as you are able to increase or top-up your full stopical premium contribution as your income improves. If you wish to be more aggressive with the instruments of investment, an investment-linked policy will as well as allow you to choose the types of funds your money will be invested in.However, like any other identical investment, there are higher risks involved and there are no guarantees on the returns, which may be higher or lower than projected. 4). Research Background An increasing trend of education expenses to enter college or university nowadays, a lot of parents using financial sources such as Employee Providence Fund or curse on borrowing from Perbadanan Tabung Pendidikan Tinggi Negara to afford the study expenses of their son after leaving secondary school for a higher level of study.As an alternative source of financial protection against high education expenses, parents can purchase an education insurance starting from their children young age. Compare with withdrawal of lump sum of money from EPF (Employee Providence Fund) or furbish up borrowing from PTPTN (Perbadanan Tabung Pendidikan Tinggi Negara), a parents just pick up to pay for a tiny amount of premium and parents as a payer can be covered by insurance in case death or total permanen t disablement occurred by paying for an free insurance rider in the particular education insurance policy.Therefore, this research carried out to examine the level of awareness among parents in Sibu Region towards education insurance provide by insurance companies in Malaysia. This thesis aims to examine both the type and amount of life insurance purchased by households.To this end, comprehensive models of households demand for life insurance were developed, which included demographic variables (age, education, employment status, health status, number of children, marital status, and race), economic and assets variables (income, homeownership, debts, as well as portfolio elements such as liquid assets, certificates of deposit, mutual funds, bonds, stocks, individual retirement accounts, annuities, other miscellaneous financial assets, and nonfinancial assets), and psychographic variables (attitude toward risk, attitude toward leaving a bequest, and ones expected life expectancy).T he effects of these factors on either term or cash value life insurance purchased by households were examined separately. Research target area General objective To examine the parents awareness towards education insurance. Specific Objective 1). To go over whether parents had purchase education insurance or not for their children at their young age. 2). To identify from which channel of selective information that made parents aware of education insurance. 3). To identify whether insurance industry playing an effective role in promoting education insurance in life insurance market. ). To examine parents interest towards education insurance products administered by insurance company in insurance market. 5). The main purpose of this study is to examine whether demographic factors lick the purchase of education insurance among parents in Sibu Region. Research question 1). Do you know there is education insurance product in insurance market? 2). Had you purchased any education insura nce from any insurance company for your children? 3). Had any insurance agent approach or introduce and give ex imageation to you regarding education insurance? 4).Are you willing to purchase any education insurance for your children? 5). what type sources of information you call for to enhance the knowledge regarding education insurance? Problem statement Financing childs education is one of the major investments that any wise parent is prepared to undertake. A sound university education is not only among the basic requirements to establish a good career it can also form the infrastructure of your childs intellectual maturity for life. We all start learning since birth and the brief period of academic education in our lives represents another landmark in a life-long learning process.But prone the high equal of education and the competition to enter well-known universities, it is necessary to have an investment plan to fund our childrens brief sting of three to four years in uni versity. With the limited places available in local universities, many Malaysian students have wisely invested in university education abroad. Faced with the uprise costs of overseas university education, how can parents save and invest to finance the tuition fees, let alone the nutrition costs.The depegging of the ringgit from the U. S. dollar last year is a welcome move for many Malaysian parents because under the whippy alternate rate system, the ringgit is likely to appreciate over the long term. This will help Malaysians reduce the cost of overseas education in popular countries such as the U. K. , U. S. and Australia (Charles Goh, www. fimm. com. my/pdf/investor/articles/09). One of the biggest worries for parents nowadays is how to fund their childrens education, which does not come cheap.In addition, as with everything else, education expenses, is it in foreign and local colleges/universities, private prime and secondary schools are expected to trend upward in future (Elaine Ang, http//thestar. com. my/ September 18, 2010). The trend is upwards as far as education costs are concerned. In predicting the future, we can only use assumptions such as cost and inflation factors in child education planning. The general increase for local studies is about 3% per year and foreign about 5% and this applies to a general business gradation of three years (Mike Lee, CTLA Financial Planners Sdn Bhd managing director, 2010).An average increase of between 5% to 7% annually in education costs for studies locally and in countries such as Britain, United States, Australia, Canada and Singapore excluding foreign exchange rate fluctuations. Moreover, there are certain years where the increase can be in a lump sum instead of percentage depending on the circumstances. (Matthew Gan, E. T. Education Services Sdn Bhd managing director, 2010). Some of the common mistakes parents make when saving for their childs education fund are starting too late, saving without place and not considering foreign exchange fluctuations for those who aim to send their children overseas.It is important to determine what the education costs are in current value and identify a suitable savings and investment vehicle. Some parents acquiret even have a clue how much education costs (Yap Ming Hui, Whitman Independent Advisors Sdn Bhd managing director, 2010). render and invest your money as early as possible. Let your money grow with your child, school fees for basal and secondary education range from RM15,000 to RM17,000 per annum with an average 10% increase in fees every two years (Rina Thiagu-Kler, Marketing manager Sri KDU, 2010).Because of less study and difficulties to obtain data regarding education insurance demand in Sibu Region. A brief interview conducted with Mr. Ten Kim Loong, Unit Manager of Kumpulan Elite Ten from Etiqa insurance sanction on 2nd December 2011 where he indicated that most of the insurance product demanded by household deep down Sibu r egion is medical card and personal accident policy, it is because the premium affordable by policyholder, moreover among the clients approached did not know what policy to purchase and how much sum insured should be enough for protection need.A discussion session also conducted with Mohamad Faizuli Bin Abd Karim, a financial planner from Takaful Ikhlas Sdn Bhd reveal that among the prospects that approached by him saying that they are not interested in any of insurance products and they worried the premium hire can become an extra expenses as per we noticed the living standard and price of basic need good are very high nowadays. The Breakdown of Schooling Expenditure As shown in shelve 2, the average cost of schooling overall was found to be RM1,782 per student per year. The cost in agricultural areas which averaged RM1,590 was about 22 per cent lower than urban areas.