Educational fund

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Educational fund
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Educational fund is one of a few parts included in life insurance policy. Insurance company agrees to pay specified amount of educational fund and other benefits as a supply for child education once parent, who was responsible for earning money for family, dies. This conrtact provide a possibility to fair knowledge gain and continuous education for family's breadwinner child[1][2].

Life insurance ideology

Educational fund is all based on life insurance policy, which can be both term life insurance or permanent life insurance. Life insurance is a method to coverage family's basic expenses in writing contract with a specific insurance company. Insured person agrees to pay some premium amounts over time to provide special benefits in case that insured may passed away. It is necessary to choose specific and named beneficiary, who would get that money in terms of life insurance policy by realising the will of insured[3][4].

Basic ideology is of educational fund is to provide enough money, named as an educational fund, to cover all of expenses that must be covered to give window of opportunity to continue process of getting knowledge and education on college. This amount of money is tax-free in terms of life insurance policy[5]. There can be some additional points in contract, which may be defined as exclusionary conditions and it causes that providing money can be prevented. These may be statuated for example as:

  • The specific cause of death (suicide, war),
  • Death of insured occurs within specific time (within two years since policy have been contracted).

But in case all necessary points are covered, beneficiary is able to get money or even borrow a money from insurance company without paying taxes[6][7].


  1. M. J. Worth 2002, 3
  2. C. S. Clauss-Ehlers & C. R. Wibrowski 2007, 326
  3. M. J. Worth 2002, 3
  4. E. W.Patterson 1919, 198
  5. C. S. Clauss-Ehlers & C. R. Wibrowski 2007, 326
  6. B. D. Bernheim 1991, 920
  7. E. W.Patterson 1919, 198


Author: Krystian Prorok