Gauteng, South Africa -- (SBWIRE) -- 03/06/2013 -- Making provision for your child’s future is a complex task but a little foresight and planning now will help ease the financial burden later on. When calculating future costs, you need to take into consideration the rising price of living and education. More importantly, you need to consider adequate life insurance for yourself in the event that something happens and you are no longer able to provide for your child.
It’s important to initiate a savings plan as early as possible to ensure you have sufficient funds for your children’s education. And to make sure you’re not just saving towards their education but also providing cover in case something should happen to you:
- When making provision for your children’s education should something happen to you (illness, injury or death), make sure not only to provide for the education costs (school or tuition fees) paid to an institution, but also to take into account the related costs including extramural activities, books, stationery, accommodation, cell phone allowance, groceries and all the other living and household expenses related to your child.
- It’s important to think about how long your child will need to be covered for. If you expect that your child will complete a three-year post matric qualification before entering the working world, you probably only require cover to age 21, but if your child is likely to carry on and do a postgraduate degree, you may need cover for longer.
- Think about the kind of academic institution your child will attend during each phase of their education – pre-primary, primary, secondary and tertiary. If your child attends a government high school, there could be a significant increase in cost once he or she graduates from school and starts tertiary education, so you may need more cover to kick in after your child reaches the age of 18 years. However, if your children will attend private high schools, the cost difference between tertiary and secondary education may not be as substantial.
How much is enough?
“Using BrightRock’s needs-matched solution one can easily calculate the potential costs. If, for example, you’re spending about R5 000 a month per child – say towards private school fees, extramural activities, after-care and other related costs – and this amount inflates yearly at consumer inflation (assumed at 5%) plus 2%, by the time your child reaches the age of 24, the total cost equates to a lump-sum investment of about R1.8 million today,” says Suzanne Stevens, Executive Director of Marketing at BrightRock.
BrightRock was started with the goal of creating insurance products that truly meets consumers’ and financial advisers’ needs. It offers truly individualised life insurance cover that’s built around your specific needs at the outset, and is specially designed to change with you as your needs change. And because BrightRock’s cover is flexible and changes appropriately when your needs change, it’s more efficient. This means both your cover and your premiums remain relevant, and more affordable, throughout your life. BrightRock (Pty) Ltd is an authorized financial services provider, underwritten by Lombard Life Ltd.