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1. Why do you need a Child Education Policy?

One of your most important responsibilities as a parent or guardian is to ensure that your child gets the best possible education to pursue some of his/her goals in life. Yet, the cost of higher education is ever increasing and has put a financial strain on you and your family. That is why it is important to start planning for your child's education as soon as possible, because the earlier you begin, the more time you allow your money to grow. The child education policy ensures that whatever happens to you in the future, your child will still have the means to pursue some of his/her goals in life.

2. What should I look for when choosing an Education Plan?

• Consider how much money you want to set aside for your child’s education.

• Make sure that the premium is affordable.

• Choose a policy that gives you flexibility so you can gradually increase the savings in the future.

• Ensure that you opt for the payor benefit rider.

3. How much Education cover do I Need?

The first step in determining the amount of coverage you need for your child education plan is to have a goal in mind. What are your goals for your child's education? The following are some of the factors you may need to consider in determining the level of coverage:

• Place of Study: Studying locally or abroad? If abroad, is there a likelihood that it would cost more? Where would that be?

• University of Choice: A top-notch university will cost more;

• Length of Study: The longer duration, the higher the incidental expenses.

4. If I buy a small policy now, and want to increase my savings later, how can I do so?

The flexibility to increase the amount of savings will depend on the type of policy you purchase. An investment-linked policy allows you the flexibility to increase savings via top-ups anytime, while a traditional endowment policy tends to be less flexible. However, some endowment policies do offer the option of top-ups as well. Check with your agent on the terms and conditions attached to the top-ups and how much of the top-ups would go to the savings or investment.

5. How will I make withdrawals when the time comes?

Look for a policy that allows flexibility especially since costs for education are often incurred over a period of a few years. There are endowment policies which will allow you to receive part of the insurance benefits before maturity, for example, payment of 30% of the insurance benefits three years before maturity, another 30% two years before maturity and the remainder upon maturity. If the policy is an investment-linked plan, withdrawals can be made through redemption of units at anytime.

6. What are the criteria of education policies to qualify for income tax deduction?

Education policies which meet the following three criteria qualify for annual income tax deduction of up to Kshs.30,000:

• the education policy must be taken up by the parent/legal guardian;

• the policy must mature when the child reaches the age of between 18 to 25;

• Payor benefit rider must be opted throughout the life of the policy.

7. I do not have any children, but would like to buy a policy for my niece. Can I?

No. Only a parent/legal guardian can effect the policy for a child. However, you can still arrange to buy and pay for the policy where you are the insured and name her as a beneficiary. You may also buy and pay for the policy where with the co-operation of the parent(s)/legal guardian. In this case, you will have to give up all control over the policy to the policy owner, i.e. the parent/legal guardian.

8. What happens to the policy in the event of early demise of the child?

In the event of early demise of the child, the death benefit would be payable to the policy owner (parent/legal guardian) and the policy will terminate. However, depending on the type of child education policy that you have purchased, the full death benefits are only payable if the child dies after a certain age. You may wish to check the terms and conditions of the policy to know when you are eligible to receive benefit payments.

9. Can the policy be transferred to any one of my other children?

No. The life assured remains the same throughout the term of the policy and benefits are not transferable to anyone else.