Education Insurance Planning in South Africa

Start investing in your child's education insurance plan today and make a difference to a better future - that is, to give them the best possible education opportunities in life.

 Education Insurance Planning - Start saving early in life
Education Insurance Planning - Start saving money early in life
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•  5 Tips for saving for your child's education (Dec 28, 2017)

A good education is one of the most important legacies or gifts that a parent can give their children.

Investing in an education insurance plan, is one way of ensuring your child gets the best education possible. It's never too late to start saving!

Unfortunately, more than 55% of urban South African parents, are not actively saving for their children’s education. This is a concerning fact, since education (including all of the extras) can become a rather pricy commodity to accommodate in a normal monthly household budget.

To afford a quality education insurance plan and set your child up for success in life, you need to start as early as possible, invest in a suitable savings vehicle, as well as to then stay committed going forward.

School fees are only one aspect of overall education expenses. However, over and above school fees, there are other expenses that push up the cost of education - eg. uniforms, textbooks, stationery, transport, extra lessons and extra-mural activities.

Three factors parents should consider as part of Education Insurance Planning:
1. Saving must outperform education inflation:
It’s crucial to choose solutions that provide returns that match, or even outperform education inflation over the long term.

2. Education can cost upward of R1 million on average:
If your child started grade R in 2018 (as an example), you can more or less expect to pay between R1337000 and R3100000 for public or private education respectively, over their school career. This rand amount more or less includes primary school, high school and a three year university qualification.

3. Considering 'how' to save, is just as important as 'how much' to save:
As a parent, first empower yourself with information. Getting a view of the potential costs is a key first step. But once you know, you need to take action. Consider how long you can save for, how much you can afford to save and how regularly. To help you establish the right strategy for you and your child, speak to your Financial Advisor. An accredited Financial Adviser can help you calculate how much you need to save, explore the various savings options available, as well as help to unpack the benefits associated with each type of investment.

Being a specialist niche area, there are a number of education insurance planning products available, where all available product options should be carefully considered. These options may be confusing...

In fact, the smartest thing you can do is -- Get a specialist broker to do it for you!

Also, note the following guidelines, tips and considerations applicable to Education Insurance Planning:

  • When to start saving: The earlier you start, the better - even around the time your child is born! You will probably be able to still absorb pre- and primary school fees in your normal monthly budget. However, high school, private schools, colleges or tertiary (university) education, including all of the accessories and extras (eg. cost of uniforms, sports gear, music lessons, some extra maths and/or science lessons etc), can become a rather daunting sum.
  • Why save for education: Because you want your child to succeed. There are hundreds of career options available nowadays, with more still to come, but it all comes with a price tag.
  • How much do I need to save for eduction: It is difficult to give guidance on the exact figures. However, because of high inflation, you need to invest your money in a savings vehicle where you can get inflation-beating returns, that provides capital growth (that’s growth for your money) over the medium-to-long-term.
  • Education Insurance Planning - Products: There are a couple of options to consider, eg Unit Trusts, Tax Free Plans, 2-in-One Education Saving Plans, specifically tailored funds, etc. An accredited Financial Advisor can also assist in giving expert advise.
  • Education Insurance Planning - Solutions: When it comes to solutions, there are various options available, depending on your time horizon, the level of flexibility you require, as well as and whether you want to invest regularly or through a once-off lump sum. You can increase your contributions over time to help your investment keep pace with inflation and achieve faster growth.
 Education Insurance Savings Plans Available
Investigate the various Education Insurance Plans available
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