I'm to be. Understand that it is also important to buy investment/saving plan for kid's education. Any recommendation? Thanks.

Hi anon,

When it comes to children's education, you have two choices.

• You/Your child borrows from the bank when he/she goes to university, and pays off the loan with interest

• You prepare for it and don't have to end up borrowing

The 2nd option would be more desirable, and thus the question rises: how do you do so?

If you are risk adverse, is to get an endowment plan, which guarantees your capital and has upside potential. This ensures that funds will be definitely available when the plan matures. You can choose a duration that will be appropriate for the timeline in mind. Returns are low (expect 3-ish %, but then again, the risk is zero if you hold to maturity.

If you want to go down the investment route, there are plenty of ways you can invest, which I won't elaborate on here. But the thing you need to note is that investments will carry market risk since they are not guaranteed and an extended market crash during the year your child is going to university will mess up your plans. Of course, returns are potentially higher than a typical endowment, but the key word here is 'potentially', which you need to understand. You are at the mercy of the markets, no matter whether you invest on your own, or otherwise. Not all markets will recover in a V-shape like last year.

Thus, for a time bound commitment where the funds must be available at a certain point in time, it would be good to have a portion of the funds kept in something safe (guaranteed). If the market crashes, you have a backup plan, if the markets are roaring, you'll have more funds available, neither of which is a bad thing.

So probably a good way to balance this would be to have something like a 70/30 split whereby 30% of the funds set aside for education would be invested, and 70% would be saved in a safe instrument.

Your question also asks about "Insurance and saving plans for baby/kid", and I'd say that insurance wise, you'll want to get an integrated shield plan with a rider at a minimum. If budget allows, you can look at getting CI coverage to lock in insurability, but that's another topic altogether and if you need me to elaborate, let me know.

Hi Anonymous,

We do have clients who bought resale savings plans from us for their children's education needs. _Resale _savings plans are those that were given up by original owners by selling to us, and are then put up on our website for resale. Buyers who bought from us benefit from shorter time to maturity with attractive interest rates. For more information on how it works, you may reach us via our website or Facebook page.

Disclaimer: PolicyWoke is a resale savings plans broker.