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Investing in an education policy
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yuleyule
#1 Posted : Thursday, November 27, 2014 9:31:58 AM
Rank: New-farer


Joined: 3/1/2011
Posts: 4
Hello all,
I have been thinking of investing in an education policy for my two year old boy, at least for his college education. However most of the products I have seen in the market do not come with a good rate of return given that my policy will run for 16 years. For example one by Britam would yield approximately Ksh. 380,000 beyond the total premiums I would have paid in the 16 year period, a rate that I feel is quite dismal considering inflation.
So, I just need to know if there is a particular education policy that gives substantial return.

Regards.
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rimuww550
#2 Posted : Thursday, November 27, 2014 9:56:05 AM
Rank: Hello


Joined: 11/14/2014
Posts: 2
i invested in one for my now 2.5year old...i will be getting something from the fifth year...i did lumpsum..but on a second thought im thinking it was not such a clever investiment...the rate does not match with such a long term investmet...should have fixed the money for one year in a bank or....something!
wait to buy or buy and wait.
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muganda
#3 Posted : Thursday, November 27, 2014 9:57:21 AM
Rank: Elder


Joined: 9/15/2006
Posts: 3,905
An education policy can be translated as - discipline + life insurance (if you die). Poor investment if you ask me.

So I'd say put the money monthly by standing order (exercise discipline)
into a market equity fund of your choice (e.g. Stanlib)
then buy a small life insurance package (if you don't have one)

Your children should appreciate their parents wisdom in time smile
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Swenani
#4 Posted : Thursday, November 27, 2014 10:11:54 AM
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Joined: 8/15/2013
Posts: 13,236
Location: Vacuum
muganda wrote:
An education policy can be translated as - discipline + life insurance (if you die). Poor investment if you ask me.

So I'd say put the money monthly by standing order (exercise discipline)
into a market equity fund of your choice (e.g. Stanlib)
then buy a small life insurance package (if you don't have one)

Your children should appreciate their parents wisdom in time smile


Education policy is not an investment it is an insurance!!!

Take an education policy as an insurance and keep on investing
If Obiero did it, Who Am I?
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Swenani
#5 Posted : Thursday, November 27, 2014 10:14:49 AM
Rank: User


Joined: 8/15/2013
Posts: 13,236
Location: Vacuum
yuleyule wrote:
Hello all,
I have been thinking of investing in an education policy for my two year old boy, at least for his college education. However most of the products I have seen in the market do not come with a good rate of return given that my policy will run for 16 years. For example one by Britam would yield approximately Ksh. 380,000 beyond the total premiums I would have paid in the 16 year period, a rate that I feel is quite dismal considering inflation.
So, I just need to know if there is a particular education policy that gives substantial return.

Regards.



If you think of investing do not take education policy, Education policy is an insurance and not an investment.

Insurance is supposed to take you oryour dependents where you/they were before incase of any eventuality not make you/them wealthier
If Obiero did it, Who Am I?
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tkzee
#6 Posted : Thursday, November 27, 2014 10:17:54 AM
Rank: Member


Joined: 7/13/2010
Posts: 160
Location: rift Valley-Naks
yuleyule wrote:
Hello all,
I have been thinking of investing in an education policy for my two year old boy, at least for his college education. However most of the products I have seen in the market do not come with a good rate of return given that my policy will run for 16 years. For example one by Britam would yield approximately Ksh. 380,000 beyond the total premiums I would have paid in the 16 year period, a rate that I feel is quite dismal considering inflation.
So, I just need to know if there is a particular education policy that gives substantial return.

Regards.


They always say insurance is not in the business of making money for you.Protection is their prime goal.Thats why most of their products give a low return.
''i can calculate the motion of heavenly bodies,but not the madness of people''-Isaac Newton
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Bykhovets
#7 Posted : Thursday, November 27, 2014 10:19:55 AM
Rank: Member


Joined: 5/17/2014
Posts: 231
Don't! Especially not from Britam. You've been warned! These investment and education policies are all a sham that make money for your agent and the insurance company. 16 years! Buy some shares instead.
"Occasionally I drop a tea cup to shatter on the floor. On purpose. I am not satisfied when it does not gather itself up again. Someday perhaps that cup will come together."
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mugz
#8 Posted : Thursday, November 27, 2014 11:01:18 AM
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Joined: 1/31/2007
Posts: 26
i was also considering the same thing...only that i knew opening an education policy was a no no! after reading this, shares here i come!
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Swenani
#9 Posted : Thursday, November 27, 2014 11:02:16 AM
Rank: User


Joined: 8/15/2013
Posts: 13,236
Location: Vacuum
Bykhovets wrote:
Don't! Especially not from Britam. You've been warned! These investment and education policies are all a sham that make money for your agent and the insurance company. 16 years! Buy some shares instead.


what if you die one month after buying shares worth 200k?
If Obiero did it, Who Am I?
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new investor
#10 Posted : Thursday, November 27, 2014 1:17:30 PM
Rank: Member


Joined: 11/26/2007
Posts: 118
yuleyule wrote:
Hello all,
I have been thinking of investing in an education policy for my two year old boy, at least for his college education. However most of the products I have seen in the market do not come with a good rate of return given that my policy will run for 16 years. For example one by Britam would yield approximately Ksh. 380,000 beyond the total premiums I would have paid in the 16 year period, a rate that I feel is quite dismal considering inflation.
So, I just need to know if there is a particular education policy that gives substantial return.

Regards.


Like someone said, insurance should not be taken as a substitute for investment. On the other hand, insurance is an important tool in ensuring your dependents are taken care of in the event of your absence or inability to work.
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anasazi
#11 Posted : Thursday, November 27, 2014 2:02:07 PM
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Joined: 6/8/2007
Posts: 675
Good point @muganda. Never thought of it that way!
Form is temporary, class is permanent
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mkeiy
#12 Posted : Friday, November 28, 2014 8:48:42 AM
Rank: Member


Joined: 1/27/2012
Posts: 851
Location: Nairobi
mugz wrote:
i was also considering the same thing...only that i knew opening an education policy was a no no! after reading this, shares here i come!


Why can't you do both? insure and invest in stocks?
I do both.

I have two policies from Britam and one from Pan Africa.

For Britam, you get annual payments from class one all through university and the sum assured on maturity.

The temptation of doing something else with the premiums' money and the fact that the future is always uncertain, it's good to ensure that kids will be okay long after one is gone.

How much does one earn from INVESTING in motor insurance?

#It'sInsuranceNotInvestment!
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radio
#13 Posted : Friday, November 28, 2014 9:41:54 AM
Rank: Veteran


Joined: 11/9/2009
Posts: 2,003
muganda wrote:
An education policy can be translated as - discipline + life insurance (if you die). Poor investment if you ask me.

So I'd say put the money monthly by standing order (exercise discipline)
into a market equity fund of your choice (e.g. Stanlib)
then buy a small life insurance package (if you don't have one)

Your children should appreciate their parents wisdom in time smile


@muganda, can you tell me a little more about this STANLIB Equity Fund. From their website, they have not mention the interest rates. Do you know how much interest rate they are paying?
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mjuaji wa stocks
#14 Posted : Friday, November 28, 2014 5:04:50 PM
Rank: Member


Joined: 1/16/2010
Posts: 672
Location: nairobi
If you want to be rich, invest ....... if you want to be poor buy policies .....

I do not believe in policies .... i am still to see a man who became a billionaire by buying policies .....

For my son and daughter, i am doing investments for them now ...... simple instruction ....

Pay current primary school fees

Buy 2 plots for your son and keep them ......

Akianza high school .... uza moja ..... pay all secondary school fees ....

Akianza university ..... sell the 2nd one and clear all university fees in one go ......

I can bet .... even if he were to go for parallel module ..... the return from the plot will be more than the policy return!

Convince me to buy a policy!

Chukua loan saa hii ..... let the policy premium become the monthly deductions!



God gave me the power to make wealth ... Blessed the work of my hands & enabled be A SELF MADE BILLIONAIRE ...... TO GOD THE FATHER OF MY LORD JESUS CHRIST; BE THE GLORY NOW & FOREVER MORE!
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sanity
#15 Posted : Friday, November 28, 2014 9:43:55 PM
Rank: Member


Joined: 1/24/2011
Posts: 407
Location: Nairobi,Kenya
mjuaji wa stocks wrote:
If you want to be rich, invest ....... if you want to be poor buy policies .....

I do not believe in policies .... i am still to see a man who became a billionaire by buying policies .....

For my son and daughter, i am doing investments for them now ...... simple instruction ....

Pay current primary school fees

Buy 2 plots for your son and keep them ......

Akianza high school .... uza moja ..... pay all secondary school fees ....

Akianza university ..... sell the 2nd one and clear all university fees in one go ......

I can bet .... even if he were to go for parallel module ..... the return from the plot will be more than the policy return!

Convince me to buy a policy!

Chukua loan saa hii ..... let the policy premium become the monthly deductions!





Thanks..Applause These are the wisest words I've heard in a long time...
Hope is not a strategy
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premio
#16 Posted : Friday, November 28, 2014 11:02:19 PM
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Joined: 5/31/2009
Posts: 226
i have from britam i pay 7000pm. what i know is that if i was to refuse ugali today my 6 years old girl will go through high school and campus bila stress even though i have just paid 21000 so far. whoever told u will be alive to sell your plots 10years to come didnt know. Insurance is protection protection protection investment nunua shares today ie KQ at 8 today might be worth 140 in 6 years so if u buy shares worth 200k do the maths
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Ndaragwa
#17 Posted : Saturday, November 29, 2014 6:37:12 PM
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Joined: 3/12/2011
Posts: 108
mjuaji wa stocks wrote:

.... Buy 2 plots for your son and keep them ......

Akianza high school .... uza moja ..... pay all secondary school fees ....

Akianza university ..... sell the 2nd one and clear all university fees in one go ......

I can bet .... even if he were to go for parallel module ..... the return from the plot will be more than the policy return!




Well said. With plots investment when kids are young ... you will easily pay tuition for the expensive university parallel module or overseas university if you so wish. But be disciplined, knowing you bought the plots to finance your children's education - not to finance other businesses or opportunities that come up with time!
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Amani254
#18 Posted : Sunday, November 30, 2014 7:21:30 AM
Rank: New-farer


Joined: 3/6/2014
Posts: 21
Mjuaaji wacha ujuanji!!!

Why are you comparing apples with nuts? A policy is a form of protection against a risk and that is different from an investment. Of course the same end is met holding all factors constant. Who says plots will forever be lucrative, they are for now and in the foreseeable future but long term, not so certain - money is shifting towards soft businesses.

I say if you can, do both a policy and investments. A policy safegaurds your child's education if you pop today, even before you accumulate enough to buy your plot.
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Boris Boyka
#19 Posted : Monday, December 01, 2014 8:14:47 AM
Rank: Veteran


Joined: 11/15/2013
Posts: 1,977
Location: Here
premio wrote:
i have from britam i pay 7000pm. what i know is that if i was to refuse ugali today my 6 years old girl will go through high school and campus bila stress even though i have just paid 21000 so far. whoever told u will be alive to sell your plots 10years to come didnt know. Insurance is protection protection protection investment nunua shares today ie KQ at 8 today might be worth 140 in 6 years so if u buy shares worth 200k do the maths

The agent lied to you. You only benefit 100% if you have paid premiums for over 5 yeras otherwise yr1-yr4 there are % less than that. Personaly i dont dwell much on " if i die my dependants....." things will sort themselves out.that insurance co. could collapse too who knows? or a rogue agent could make errors in documentation thus chaotic(seen it with my colleagues).
Everybody STEALS, a THIEF is one who's CAUGHT stealing something of LITTLE VALUE. !!!
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maka
#20 Posted : Monday, December 01, 2014 8:48:55 PM
Rank: Elder


Joined: 4/22/2010
Posts: 11,522
Location: Nairobi
Boris Boyka wrote:
premio wrote:
i have from britam i pay 7000pm. what i know is that if i was to refuse ugali today my 6 years old girl will go through high school and campus bila stress even though i have just paid 21000 so far. whoever told u will be alive to sell your plots 10years to come didnt know. Insurance is protection protection protection investment nunua shares today ie KQ at 8 today might be worth 140 in 6 years so if u buy shares worth 200k do the maths

The agent lied to you. You only benefit 100% if you have paid premiums for over 5 yeras otherwise yr1-yr4 there are % less than that. Personaly i dont dwell much on " if i die my dependants....." things will sort themselves out.that insurance co. could collapse too who knows? or a rogue agent could make errors in documentation thus chaotic(seen it with my colleagues).


Just don't get kids....
possunt quia posse videntur
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