Academic insurance is something that most people desperately need. Year after year, millions of parents find it difficult to meet the cost of education. Students are often sent home because their fees have not been cleared. Others find it impossible to graduate based on the fact that few academic institutions are willing to give them the time to sort out their finances. Coupled with other expenses such as food, housing, transport and healthcare, education becomes a basic requirement that can be insured.
We covered why you should plan ahead with your education insurance in this story. The question we now answer is how?
How does it Work?
Much like other forms of insurance, education cover schemes operate through monthly deposits from policy holders. The schemes then invest the money on behalf of the insured person. Over a specified period of time, the money increases. The amount returned to the policy holder on top of their total investment is determined by the plan they choose. Insurers like Pan-Africa Life offer flexible plans that are tailored to their clients’ financial needs.
With an academic cover, parents and students can formulate a payment plan based on insurance maturity benefits. It takes anywhere between 5 and 20 years for academic insurance schemes to mature. During this time-frame, policy holders can deposit money into the scheme based on how much fees they intend to pay.
How Much Can You Get From It?
For most companies, the cover system depends on the premiums paid. If a policy holder wants bigger returns, they simply have to deposit more money or choose a scheme that fits their financial needs. Pan-Africa’s plan gives at least 5% interest on top of the money invested. Other companies like British-American and CIC Insurance give 15% of the assured sum every year at specific intervals as the maturity date edges closer.
Jubilee Insurance offers a lump sum or a series of installments when the policy matures. If the policy has matured for a high-school student, fees will be paid in annual installments and whatever money remains will be used on higher education. The minimum sum assured for A Jubilee Insurance Career Life scheme is KES 200,000. There is no maximum sum so the policy holder can opt for more returns as long as they have the money.
How Long Will It Take For the Scheme to Mature?
With academic insurance, the safest possible bet is to bank on free primary education as one saves for secondary and university. This is mainly due to the fact that most schemes take about a decade to mature.
If the student is in school for 10 years, the policy will mature at the end of this period depending on how soon the policy holder wants the money. Any arrears can be cleared at this point. Alternatively, the money can be used to cater for the rest of their education. This may include Secondary School or University.
Academic policies with shorter maturity rates may seem like a good idea for those who need to get their returns as soon as possible. Jubilee’s plan gives a maturity rate of anywhere between 5 and 20 years while others like Old Mutual give a minimum maturity rate of 10 years. However, Jubilee offers more benefits for long-term investments.
According to the Association of Kenya Insurers (AKI), there are currently has 46 registered insurance companies and over 4000 insurance agents. Below is a list of five major companies that offer academic insurance for minimum monthly premiums between KES 2000 and KES 7000:
| Insurer | Insurance Policy | Monthly Premium | Maturity Rate | Benefits |
| Pan-Africa Insurance | Flexi Academic Plus | KES 2000 (Minimum) | 10 to 20 Years | A return of 100% of the assured sum. Has a cover for accidental death and disabilityAt least 5% of the assured sum in benefits |
| Flexi Educator | KES 2000 (Minimum) | 10 to 20 Years | 100% of the assured sum. Has a cover for accidental death and disability | |
| British American | Super Education Plus | KES 3000 (Minimum) | 10 to 25 Years | 100% of the assured sum. Policy holder is paid 15% of the assured sum every year for the last 6 years to the date of maturity15% tax relief on premiums10% Discount if you contribute between KES 5000 and KES 9,999
15% Discount for contributions above KES 10,000 |
| Jubilee Insurance | Career Life Plan | KES 3000 (Minimum) | 5 to 20 Years | 100% of the assured sum plus benefits which depend on the agreement between the insured and the insurer (Can be paid in a lump sum or in installments). Has a cover for accidents resulting in hospitalization for accidental death and disabilityThe longer the waiting period, the lower the premiums |
| CIC Insurance | CIC Academia Policy | KES 6000 (Minimum) | 10 to 20 Years | 50% of the assured sum. Policy holder is also paid 15% of the assured sum every year for the last 5 years to the date of maturity |
| Old Mutual Insurance | Max Education Plan | KES 7000 (Minimum) | 10 to 20 Years | 100% of the assured sum. Has a Life Cover for accidental and non-accidental death as well as a disability cover. Policy is also tax-exempt |