This is a policy taken on the life of a person known as a policy owner for an amount known as principal assured for a specified period to pay the sum assured to the policyholder at the expiration of the period or to the beneficiary in the event of the policyholder dying before the expiration. This usually entails making yearly payments known as premiums for the specified period in the policy. The premium payment can be monthly, quarterly, half yearly, or yearly.
The system is relatively similar to a life policy, except it is meant explicitly for education. It is a gradual saving of the child’s education costs in the future today. Whatever premiums are paid too attracts dividends so that what is received at the policy’s expiration is more than the sum paid as premiums.
A personal pension scheme involves investing a certain percentage of one’s income with a fund manager. Usually, Insurance Companies collect the sum assured with accrued interest at age 45 or above or such arrangement to receive the amounts due in a period. The latter arrangement is usually known as an annuity.
Having seen the windows of opportunities of investments discussed above, the next stage is to look at those factors that will influence our decisions on the type of investment to channel our resources; such will include the following.