When I learned that I am pregnant with my first child, Sasha, the first thing that came into my mind is: will we (my husband and I) able to give our child the future that he or she deserves?
Well, I guess parents always think of a bright future for their kids, including sending him or her to the best school possible. That’s the burden we had to carry until we see our sons and daughters graduating. But, of course, it’s a burden that we, parents, are so willing to accept.
In the Philippines, however, quality education doesn’t come cheap. What’s worse, the cost of schooling is bound to increase in the coming years. And this may compromise our plans of sending our kids to the best schools like Ateneo de Manila University (ADMU), De La Salle University (DLSU), University of the Philippines (UP), or the University of Sto. Tomas (UST).
The annual tuition fees of these institutions today already range from Php50,000 to Php200,000. What more 10 to 20 years from now?
When she needs to go to college, we might have to shed at least ₱100,000 per year. Education is so expensive here in the Philippines. In 2014 alone, the Commission on Higher Education (CHED) approved a 6 to 14% increase per unit for 287 private colleges and universities.
I kept on hearing about educational plans. Could it be the answer? I want to know, too.
What are educational plans?
Educational plans are guaranteed cash benefits. The policyholder may use the money to cover tuition fees, textbooks, and other learning materials. They usually offer flexible payment terms such as 5, 10, 15, or 20 years. The guaranteed cash can be obtained annually when it’s time for your child to enter college.
Some educational plan providers even provide another guaranteed cash upon the graduation of the beneficiary (colloquially known as the policy bearer). The policy payor is the parent or guardian paying for the monthly contribution.
One good thing about these policies is the life insurance feature. For instance, the payor suddenly met demise, the educational plan will still be active without the need to pay for the remaining years of your chosen term. This means that even without you around, your kid may still have access to guaranteed cash to fund and finish his or her education.
How do educational plans work?
Obtaining an educational plan for kids not yet attending school is possible. Parents can apply for more than one educational plan. The monthly contribution will depend on your capacity to pay, although there is a minimum. The minimum is usually below Php2,000. Of course, if you want to send your kids to prestigious universities, you need to pay higher than usual.
Experts say that the best time to start applying for an educational plan is even before your child’s first birthday. An educational plan can be the best solution to the rising cost of education in the country. Nonetheless, it would be best to talk to the real experts.
Don’t worry because insurance companies themselves provide an in-house insurance agent.
What is the best educational plan?
We have so many choices, but there is no best educational plan based on what we’ve read. It’s up to you what you deemed best for your child, and for us, that’s the AXA Academix plan.
With this also, I am not in the position to tell you which is the best one. I chose AXA because it aligns with my value about education. Its website says, “Education is the best gift we can give our children. It is a treasure which cannot be taken away from them. Make most of the luxury of time, with years to save for their college fund and secure their future ahead.”
There are two options available: education fund with investment growth and education fund with guarantees. The first one covers the child’s expenses until graduation while also offering built-in protection benefits. The second one, called Academic eXential, is a more affordable plan that covers a guaranteed fund for the child’s education.
So really, your choice will depend on your financial situation.
Are educational plans worth it?
I firmly believe that there is value to preparing for your child’s future. That’s why my husband and I decided to get Sasha her educational plan. We have yet to obtain one for Adele, though, she is also a beneficiary under her ate‘s plan.
ate is the Tagalog word for older sister
Of course, while paying for the monthly premium, you still have to save. You shouldn’t think of having a college educational plan as a way to slack, thinking that your child’s education is covered. Well, we are just talking about the tuition fees and there are many other expenses. The price of each book alone, depending on the chosen course, can go as high as ₱1,000.
So, being prepared is the best way to combat the surge of educational expenses in the future especially if you have more than one child.
If you are a parent like me, you might as well approach a provider and ask about their educational policies. Just make sure that you are dealing with a reliable provider. Remember that it is your child’s future at stake here.
Making a mistake in choosing the right provider will only further compromise your child’s future and definitely, your hard-earned money.