Education has long been regarded as the foundation for a better future, a sentiment deeply ingrained in our society. It is a belief that has been passed down through generations by parents, teachers, and leaders alike, emphasising the pivotal role education plays in shaping individuals and communities.
The value of education and its far-reaching impact are universally acknowledged. Parents make significant sacrifices to ensure their children have access to school, governments introduce policies aimed at promoting education, and employers invest in building a highly skilled workforce. These collective efforts have contributed to Kenya’s impressive literacy rate of 81.5%, one of the highest in Africa, according to the Kenya Bureau of Statistics.
While this figure is commendable, the cost of education to many families is high, with cases of guardians ending up in debt to facilitate access to education becoming a reality.
A study by a local digital loans operator reveals that every start of a new term in January, May and September reports the highest education loans taken to fund the purchase of uniforms, school shoes, books, CBC materials and to meet transportation costs. Another study by FinAccess Household Survey reveals that for many low-income households, the money for education is often supplemented by loans at 43 percent.
This leads to the crucial topic of long-term planning for our children’s education. Such planning not only ensures that children have access to quality education but also alleviates the financial strain on guardians. One of the most effective tools for achieving this is through an education insurance plan.
Education policies offer a range of benefits, with some providing a dual option that includes savings and a life insurance cover to protect the parent’s long life dream of educating a child. For instance, in the unfortunate loss of life of a parent, or when a parent suffers permanent disability, or critical illness, the policy ensures that a child’s education is secure, allowing them to continue learning without disruption. Insurance covers the school fees expense for the entire period that the parent had specified while purchasing the education plan, making it easier for the family to meet life expenses at the time.
As an example, CIC Life has an education solution called Academia which guardians can access with a monthly premium starting from as low as KShs 2,000. The CIC Academia policy offers a premium waiver in the event of a guardian’s death. In such cases, CIC takes over the premium payments for the remainder of the policy term, ensuring that the savings originally intended for the child’s education are still available. In the unfortunate case that the child passes away, the guardian has the option to either designate another child as the beneficiary or file a claim to receive a refund of the premiums paid.
Education policies also help families prepare for the rising costs of education by providing a structured savings plan, ensuring that funds are available when needed. This kind of foresight reduces the financial burden on them and prevents the need for last-minute loans or withdrawals from other investments, which could compromise long-term financial goals. It also offers peace of mind by creating a clear, predictable path for financing a child’s education, while providing the benefits of earning interest on money saved.
Furthermore, many education policies come with the added advantage of tax benefits, which offer financial relief to families. The premiums paid toward these policies may be tax-deductible, meaning families can reduce their taxable income and, ultimately, pay less in taxes. This makes investing in a child’s future education not only a smart financial move but also a more affordable one. With the tax savings, parents can free up extra funds to cover other household expenses, making it easier to balance immediate needs while securing long-term educational goals for their children.
A study by the Association of Kenya Insurers entitled ‘Insurance Awareness, Customers’ Needs and Satisfaction in Kenya’ reveals that despite education policies being part of personal policies, it continues to attract many parents keen on securing the future of their children. It favourably competes with motor insurance, a mandatory requirement for anyone owning a vehicle while medical insurance is largely promoted by employers seeking to attract and retain the best employees.
As we strive for a more secure and prosperous future, I strongly urge parents and guardians to prioritise education policies. These are not just financial tools; they are investments in our children’s potential, ensuring that even in the face of life’s uncertainties, their dreams remain intact and their future secure.
Meshack Miyogo is the Managing Director of CIC Life Assurance
