Professional Documents
Culture Documents
voices
A good education savings plan can help you grow your funds with a regular rate of return, allowing you to have sufficient funds when it is time for your child to attend university. This is especially critical in light of rising fees at tertiary institutions here and abroad. For example, a fouryear Business course at the National University of Singapore could cost you more than S$35,000. And according to a survey conducted by insurance company Aviva in 2012, one in four Singaporean parents surveyed is not saving enough for his childs university education.
44% S$500
45%
<S$100 S$100 - S$499
23%
SOURCE: AVIVAS CONSUMER ATTITUDE TO SAVING FOR CHILD EDUCATION, NOV 2012
POSB MyEduPlan, a life insurance endowment plan, is one of the most flexible policies and has one of the widest age ranges in the market. It offers xed returns of up to 1.41 per cent per annum upon maturity and you
get a maturity benet at the end of the policy term. POSB MyEduPlan offers Fixed Cash Benets payouts that are aligned to your childs educational milestones. There are up to six such payouts, with a main payout at 19 or 21 (age next birthday). It is designed so that the larger payouts will kick in just when you need them most.
A good education savings plan can help you grow your funds with a regular rate of return, allowing you to have sufficient funds when it is time for your child to attend university.
Brandon Lam
HEAD OF CONSUMER INVESTMENT AND INSURANCE PRODUCTS
It matches your affordability level, risk prole and savings horizon. It ensures that your saving goals can be met under unforeseen circumstances.
POSB MyEduPlan protects you and your child from unforeseen circumstances. Apart from death and terminal illness insurance for your child, the addition of certain riders will result in future premiums being waived in the case of death, terminal illness or permanent disability of the policy owner.
University
Year 1 Year 2 Year 3
S$2,500
S$2,500
S$20,000
S$10,000
Mr Tan pays S$4,451 per year for 10 years. The total premiums paid are S$44,510.
Total Fixed Cash Benets = S$55,000 Total projected bonuses at maturity = S$26,719 Total policy benets = S$81,719
Find out the current costs of these items, then factor in the estimated rate of ination to determine these costs by the time your child is ready to attend a tertiary institute. Calculate the amount of funds you will have Work out the future value of your savings, life insurance policies and other investments by the time your child turns 18 or 21. To do this, you need to forecast the rates of return and any additional funds you intend to save. Work out the shortfall, if any, between the estimated cost for your childs education and how much you expect to have by the time your child is ready for a tertiary education. Choose a nancial product that meets your risk prole Before deciding on which product to put your money in, you should decide on your goals, the amount you are prepared to set aside, the required rate of return, and the amount of risk you are prepared to take. The most suitable nancial product is the one that best meets your criteria.
The above illustration is based on a MyEduPlan policy where Mr Tan male, 35 (age next birthday), non-smoker has chosen to pay an annual premium of S$4,451. This translates into total premiums of S$44,510 paid over 10 years, including premiums of EasyPayer Premium Waiver (compulsory). The total policy benets of S$81,719 consists of Fixed Cash Benets of S$55,000 and total projected bonuses at maturity of S$26,719 at 4.75% projected investment return. Total projected bonuses at maturity are non-guaranteed. Numbers have been rounded up to the nearest dollar value.
MyEduPlan provides you with cash benets aligned to your childs education expenses. ILLUSTRATION: ONG ZE TENG
education and the funds you will have by the time he starts attending university. Then, seek a suitable financial product that meets your goals (see sidebar). Placing your money in a basic savings account will not be sufficient. It is important to choose a comprehensive education savings and protection plan with stable projected returns so that you can slowly and safely grow your funds. A life insurance endowment plan is one product that meets these criteria.
MyEduPlan, for instance, is designed to provide you with cash benets that are aligned to your childs university education expenses. It also protects you and your child from unexpected events, giving you further peace of mind. The cost of attending university is becoming increasingly more onerous. To be prepared financially, start planning now.
This is the 11th story in a 19-part collaboration between TODAY and POSB.
Rising tuition and living fees, coupled with intense competition to get into the best universities, mean that a quality tertiary education does not come cheap.