With more than 50% of Kenyans living below the poverty line, it pays to save up for an education cover. Even with free primary education, students who get into public schools may only make it so far. Secondary education becomes a problem when money checks into the equation. According to the Kenya National Bureau of Statistics (KNBS), at least 700,000 students will sit for their Kenya Certificate of Primary Education this year. The Bureau estimates that only 64% of  graduates  will attended secondary school while the rest  will either fail or their parents will not be able to afford the fees.

In such cases, academic insurance can be used to secure a student's future. The cost of school fees can at least be reduced based on monthly premiums paid by the policy holder.

Affordable Monthly Premiums

The average amount charged for academic insurance in Kenya is KES 2000 a month, according to the Kenya Insurance Review. Companies like British American charge a minimum monthly fee of KES 3000 while CIC Insurance charges KES 6000 and Old Mutual charges at least KES 7000. For a minimum of KES 2000 a month, parents can apply for Pan Africa’s Flexi Academic Plus or the Flexi Educator plan.

Slow Maturity Rate

Academic insurance policies may seem like an unnecessary investment in a third world country but Pan Africa Life begs to differ. The insurer has offered education insurance for the past decade and those that invested are about to reap the benefits. Given that such policies take about 10 to 20 years to mature, it pays to start investing ahead of time.

Returns

Both of Pan Africa's academic policies have a return rate of at least 5%. The Academic Plus package takes 9 years to mature while the Educator plan takes 10. CIC Insurance gives a return of 15% of the assured sum 5 years to the date of maturity. Additional returns of 15% are given 4, 3,2 and 1 year prior to the maturity date. Old Mutual applies the same method only that it's returns start from 6 years to the maturity date of the policy. This means that the policy holder gets another 15% of the assured sum at every interval.

Flexi Academic Plus, which was launched during the first half of this year, is available for any parents between the ages of 18 and 65. With this policy, the holder is entitled to four equal annual payouts of an assured sum plus benefits at the end of the 9 year maturity period. The pay outs depend on how much money has been invested in the scheme. In other words, the more the money invested, the bigger the returns.

Basic Requirement

The Insurance Review reports that education insurance policies should be a basic requirement in every household. Certain factors remaining constant, it takes about 8 years for a student to complete their primary education. Due to the 9 to 10 year waiting period, Pan Africa notes that it is better to start saving as soon as the child is born. According to the Review, planning ahead ensures that policy benefits are felt as soon the maturity date is realised.