OREANDA-NEWS. April 09, 2013. SEB’s study about the need for child insurance showed that most often parents accumulate money for a child’s studies in an institution of higher education or for the downpayment on the first own home for the child.

SEB’s child insurance statistics indicate that if parents make monthly insurance contributions in the amount of EUR 30-35 for 15 years, they will have accumulated approximately EUR 6000 by the end of the insurance period, which is a rather large amount of money for financing the child’s education or the downpayment necessary for purchasing a home. Parents prefer child insurance to other solutions for accumulating, primarily because if something happens to the parent, the child will still receive the agreed insurance amount at the end of the insurance period.

“Many young people need a new dwelling away from their parents’ home, after starting independent employment. Often the rental payment for an apartment is about the same or even more than the loan payment applied for upon purchasing the dwelling.

However, it is often the case that young people do not have an available source for the necessary downpayment. Today, a small apartment in some districts of Tallinn or in Tartu can be purchased for approximately EUR 35-40,000. Upon using KredEx surety as supplementary security downpayment, own financing would be only 10 per cent, that is EUR 3500-4000 would suffice as a downpayment,” said Triin Messimas, Development Manager of Private Loans at SEB.

The longer the period planned for accumulating, the larger amount the child can count on in the future. According to SEB’s study on child insurance, long insurance contracts are concluded for their children by young parents who have faced the need to purchase a home just recently.