How important is an education policy in Kenya? Well, a wise man once said, “Your child will keep building castles in the air; you better start buying bricks for the castle today.”

As parents, we love our children and a responsible parent meets the most obvious obligation towards their child/ren’s welfare. Securing their education is among the key responsibilities parents find as the most important. The Bible in the book of proverbs says that a wise father leaves an inheritance for his children’s children . The greatest wealth and inheritance you can leave for your children is good education.

Education insurance plans serve two purposes, savings, and protection. Therefore, the best coverage plans protect the child’s future school fees and cater to the unexpected accidents or demise of your beloved child/ren; God-forbid.

Education Policies Unveiled

These unique customized plans offer various benefits such as building a fund for the child’s educational future needs, a life cover, and the optional additional life riders such as a critical illness cover or a personal accident cover. Customized unit linked products provide a perfect opportunity to invest your saving in various money making vehicles like the stock market, or government t-bills and t-bonds.

Features of an Education Policy

Premium Amount

This is the overall cost of the policy where there’s a savings component, insurance costs, and administration costs loaded to produce the final sum for clients paying either monthly, quarterly, semi-annually or annually premiums, depending on the contract signed.

Sum Assured

Determines your savings component and is the protection paid out in the event of a calamity occurring before the maturity of the policy.

Policy Term

Defines the Period of the contract. Most education plans range from 10 years to 30-year plans. The best time to pick out an education plan for your child is a few months after birth, to take advantage of their early years at home. Once they start junior school from year 6, part of the fund will be readily available to pay for his/her school fees.

Waiver of Premium

This is an additional rider cover. Some are inbuilt, depending on the insurer you choose to save with. In case your policy offers optional riders, it is advisable to select it to safeguard your child’s future savings. Where untimely death occurs, the beneficiary receives a sum assured amount as stipulated in the contract. The policy continues with no extra premium required.

Partial Withdrawals

Some education plans allow partial withdrawals as early as the fourth year. Depending on the type of policy that you have, a partial withdrawal may be made from the sum assured (endowment plans) or from the guaranteed investments (unit linked plans).

Riders and Benefits

Come as add-on coverage to the education policy. Some of the most common riders include:

  • Waiver of premium
  • Death
  • Disability
  • Critical Illness
  • Personal Accident

Benefits of Education Policies

Education plans offer security in that you will no longer have to worry about future school fees funds.Clearly, if you planned well, a long-term policy that extends to the university level is the best gift you can offer your children.

Provides extra security if a calamity befalls your family. The plan may continue, and scheduled funds will be released as planned regardless of whether the parent is alive or gone (waiver of premium rider applies)

Long-term compulsory savings, an extra boost from invested funds churns out handsome profits in the long run.

A shadow photo of a student in a graduation gown. The topic: Why you need an education policy in Kenya.

Types of Education Policies

Unit Linked Plans

ULIPs offer investment options to clients over a variety of funds to choose from. The policyholder is allowed to switch funds to maximize the best possible returns for an invested policy. Over time, Ulips fluctuate with market trends but make a handsome return at maturity of the policy.

Endowment Plans

Provide a specified sum assured from where the partial withdrawals are taken out periodically. Some endowment plans offer with profit cash outs while others give guaranteed face amounts equal to the sum insured, periodically as per the term of the contract. The final payout at maturity comes with an accumulated bonus earned over the years.

Let Us Help You

At Bismart , we pride in helping parents achieve a bright future for their talented children. Contact us today for a comprehensive overview of the available options in the market.