Insurance can ease the education cost burden

By Flavia Mpagi

Just after you had breathed a sigh of relief on paying your children’s school fees for their first term, they are now back home for holidays and the cycle continues. After the release of senior six results , many parents are hoping their children’s tertiary education will be sponsored by government because if not, then they will be looking at an additional 3 or 4 years of paying school fees; that’s if one can afford it.

Blame it on the rising cost of living, but the ridiculous prices currently charged by education providers, makes one almost want to start up a day care, kindergarten, primary and secondary school all rolled into one – no matter the space or lack of it. Gone are the days when school fees at Gayaza High School cost shs. 300,000 – and it is not that long ago or so I’d like to believe! Whatever the reason though this is a worry that cuts across society.

Forced to live from hand to mouth and often from one salary to the next, obtaining access to the best education for our children has become an uphill task. Although tertiary education more often than not remains the ultimate goal, today’s demands result into those distant dreams taking a back seat.

For those who need to balance books before committing to raising a child in today’s uncertainties, you just might want to hold onto those dreams. A number of endowment policies, which are a type of life assurance saving schemes, offer exciting and practical means for funding anything from that coveted university education, wedding or even start-up costs for that business idea you’ve been nurturing in your mind.

This policy pays out on a fixed date, also called the maturity date; or on an early death, thus also providing life assurance cover which ensures that the financial burden on dependants is reduced upon suffering the untimely loss of a dear one.

Rhona had always wished for her son to pursue his university education in Canada, so shortly after his birth, she took out an endowment policy that would payout Shs. 100 million plus interest on his 19th birthday; just in time for his university.

Yearly, half-yearly, quarterly or monthly premiums are usually payable for the duration of the contract and are determined by the required sum at the end of the insurance period, the age of the applicant, health and income among other factors.

For a monthly premium of shs. 362,000 payable for 20 years, a 25 year-old could be paid as high as shs.200m and the same amount could be payable in 10 years for a monthly premium of shs. 767,000. A 30 year-old could be paid shs. 100m in 10 years for a monthly premium of shs. 435,000 and for a monthly premium of shs.1.2m a 35 year-old could be paid shs.100m in just 5 years. (These figures are taken from one of the life insurance companies in Uganda)

Securing a child’s future and doing everything to help them realize their dreams is every parent’s wish. This is becoming increasingly difficult with the increasing cost of education and the reducing number of children sponsored by government for tertiary education. However, if planned in time, endowment policies can help one to realise these dreams.