Published: April 16, 2021 | Updated: May 5, 2021 | Posted by: Rouselle Isla | Personal Finance
Sending your child to college may seem unaffordable if you compute all the expenses. Whether you’re planning to enroll your child in a public or private school, education in the Philippines is not cheap.
But there are educational plans available to help you develop a disciplined savings plan that will pay for your child’s education. And there are many life insurance companies offering some of the best educational plans in the Philippines. Let’s explore them in this guide.
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An educational plan is a savings, insurance, and investment plan that helps parents save funds for their child’s college education.
The savings and investment portion of an educational plan builds up a fixed fund for a certain period, and the insurance portion provides life protection for the payor, usually the parent, during the term of the plan.
Should anything happen to the payor that results in permanent disability or death, the payor or the beneficiaries (in this case, the child) is guaranteed a payout.
Upon the educational plan’s maturity, the payor can use it to pay for the child’s college education.
Yes, especially if you want to make sure your child gets a quality education without worrying about the financial burden.
It’s every parent’s dream to see their child finish college. But the sad reality is that not all Filipinos can afford the cost of education in the Philippines.
Furthermore, tuition fees today will not be the same 10 or 15 years from now. Because of inflation, tuition and miscellaneous fees, as well as the cost of goods and services will continue to rise. It can be financially challenging to pay for these things when you’re also growing older and future earnings are not guaranteed. This is where educational plans can help.
Educational plans can help secure your child’s education. The sooner you get one, the more affordable the premiums and the higher the payout will be.
You can also add riders to the educational plan to meet your child’s needs. Riders provide insured parties with additional coverage options at an extra cost. Simply put, your child will still be able to go to college even when you’re no longer around.
With an educational plan, you don’t need to worry about where you’re going to get the money to pay for your child’s tuition. Maturity benefits are usually enough to cover your child’s entire college education.
Educational plans are not cheap. They usually eat up a huge portion of the family budget, especially if the plan has a lot of riders or add-ons.
Also, educational plans will not cover all the school fees. There will still be things that you’ll need to pay out of pocket, like food and transportation allowance, dorm rent, and other miscellaneous expenses.
And since educational plans are an investment, they also carry an amount of risk. Hence, there’s a chance that you’ll earn more or just receive the face amount, which is the gross total amount stated in an insurance agreement or policy.
Wondering about the best options out there for securing your child’s college education? If you want to know what the best educational plan in the Philippines is, check out this list of recommendations.
With Manulife’s Education Builder, you can build your child’s education fund by investing in professionally managed funds. It also comes with life insurance coverage that protects your child’s future and covers their college education no matter what happens.
Pros: You can choose how much and how long you’ll pay for the plan, as well as how you want to receive the payouts. Depending on your needs, you can also choose the education riders you want to add.
Cons: As this plan is investment-linked, projected returns are not guaranteed and will depend on market conditions.
With AXA AcademiX, you can grow and maximize your investment to help pay for the quality education your child deserves. In case of untimely death, your child is also guaranteed to receive cash benefits until they graduate.
Pros: An educational plan like this can give you peace of mind and security. It’s also flexible enough to meet your needs and gives loyalty bonuses for long-active policies.
Cons: The long-term payment plan may be difficult to commit to. Returns are also dependent on market conditions.
Back to the main article: Study Now, Pay Later: How to Get a Student Loan in the Philippines
The AXA Academic eXentials plan is a straightforward and easy-on-the-pocket educational plan that comes with guaranteed benefits. Pay the monthly installment plan for five years and decide when you want to receive the cash benefits.
Pros: It’s an affordable and easy-to-understand educational plan. Therefore, it’s easy to buy. Just pick a plan that you can afford, accomplish the form, settle the payment, and you’re done.
Cons: When it comes to benefits, it offers only the basics.
The Future Scholar plan from Philam Life is a life insurance product with an investment component. It offers guaranteed education benefits at affordable premiums starting at PHP 20,000 annually.
Pros: This is an affordable product if you want to ensure your child’s education in the future. It provides life protection and offers guaranteed cash payouts when your child turns 18.
Cons: The issue age for parents is up to 55 years old only. And the PHP 20,000 minimum premium payment is only for annual payment modes. For monthly, quarterly, and semi-annual modes of payment, the minimum premium is PHP 30,000.
Related article: What is the Best Life Insurance in the Philippines?
The Wealth Secure Education from Insular Life offers disciplined savings in monthly, quarterly, semi-annual, and annual terms. This helps you build that college fund for your child by receiving more competitive earnings.
Pros: It has a flexible payment plan that will suit different budgets and help you save more.
Cons: This is also an investment-linked plan, which means projected returns depend on market conditions and are therefore not guaranteed.
Wealth Assure Education is another plan from Insular Life. This is an investment-linked life insurance plan that can help you build funds to pay for your child’s education.
Pros: It can help grow your money in a short period while also providing you with life insurance protection as you build your fund.
Cons: Like the Wealth Secure Education, this is also an investment-linked plan. Projected returns are not guaranteed.
This savings plan and life insurance product from Sun Life helps you save up for your child’s education while also giving you and your loved ones financial security. It provides guaranteed cash benefits, so you won’t worry about paying for your child’s education needs in the future.
Pro: This is a flexible plan that combines life insurance, savings, and educational plan. A plan like this can help address any kind of financial emergency or need in the future as well.
Con: The long-term payment commitment can be daunting for some Filipinos whose financial capability can change anytime.
This investment-linked life insurance plan allows you to pay for your child’s education while enjoying life protection. It also offers different investment options to help grow your money over time to pay for school expenses and secure your family’s future.
Pros: It’s a flexible plan that you can use not only for your child’s education but also for other financial goals and even emergencies.
Cons: Just like the Sun Dream Achiever, it’s a long-term payment commitment that may not be suitable for Filipinos who prefer short-term payment periods.
This protection and savings plan from Sun Life provides double life insurance coverage and cash benefits, which you can use to fund your child’s education needs.
Pros: You enjoy lifetime guaranteed cash benefits and living benefits that can be helpful in different financial emergencies or expenses.
Cons: The grace period for this type of plan is only 30 days.
Aside from enjoying life protection, the PRULink Elite Protector helps you save, invest, and build funds faster to meet all your major financial goals, including paying for your child’s education.
Pros: It’s a flexible savings and investment option if you have medium to long-term financial goals, like funding your child’s college education, purchasing a house, or even building a retirement fund.
Cons: Since this is an investment-linked product, projected returns of investment are not guaranteed. The investment is affected by market conditions. Additionally, if you want to build your funds faster, you’ll need to top up more frequently and pay higher premiums.
Educational plans in the Philippines are long-term financial commitments. Getting one means making sacrifices and putting away a certain amount of money to pay for the premiums.
This is why it’s important to get a payment option that matches your paying capacity. Whether it’s monthly, quarterly, semi-annually, or annually, choose a payment plan according to your financial capability.
Also, consider an educational plan’s grace period and reinstatement policies. In case you miss a payment, find an educational plan provider that will help you continue your plan without too much hassle.
Insurance providers have different standards when it comes to payouts. Some offer fixed payouts a few years after you purchase the plan or immediately after your plan starts. Others also offer payouts when your child reaches a certain age.
Sometimes, there will be emergency situations that will require you to make a partial withdrawal on your policy. It will be good to have this option on your educational plan as well.
Getting an educational plan in the Philippines is already a huge step in securing your child’s future. But if the budget permits, you may also want to avail of additional layers of protection.
Additional benefits like hospitalization, critical illness, disability, accidental death, or premium waivers further ensure that your child will be financially taken care of when you’re no longer around.
Choose a plan that will let your money grow over time. It will allow you to earn more than what you pay for while also giving you a comfortable cushion against unexpected emergencies. It will help you achieve your fund goals faster, too.
You want to choose a plan that will cover your child’s entire high school or college education, or both, depending on your needs and preferences. The best way to do this is to get an educational plan while your child is still very young (as young as 7 days old) so that you can pay for at least 10 years with premiums that are still affordable.
Made up your mind about getting an educational plan for your child? If you’re ready to avail of a policy, here are some important steps to take to make sure you’ll get the right one.
When started early, educational plans in the Philippines can help parents save money. The longer you allow your investments to grow, the bigger the potential returns can be.
Should you fall on hard times and find it hard to pay the premiums, don’t let your policy lapse. You can charge premium payments to your credit card in the meantime. But settle them right away to keep credit card balances from piling up and becoming unmanageable debt.
We hope you’d be able to choose the right product from the best educational plans in the Philippines listed above. Consider your budget, your needs, the insurance provider, and the plan’s benefits. And don’t be afraid to ask questions from your financial advisor so that everything is clear to you.
Rouselle is a quirky midlifer who loves the hustle of writing. She is also passionate about books, food, and film. When not busy typing away on her laptop, she’s busy collecting life moments and indulging in guilty pleasures. Follow Rouselle on Linkedin.