Before your child even starts school, you would probably
have spent a small fortune on many enrichment programmes.
This may continue into his primary and secondary school
days, depending on his enthusiasm and persistence, as well
as your pocket. Of course, now that he is going to school,
you spend another fortune on his tuition.
In Singapore, tuition fees at the two universities are
currently about $5,500 per year (except for dentistry and
medicine courses that are more expensive). When it is your
child's turn to enter university, this sum could have
ballooned, with inflation and rises in fees. And if you send
your child overseas, the bill, including school fees, living
costs, air fares and other expenses, could amount to more
than $60,000 a year.
Some parents regularly put aside a sum for their children's
education, either into a savings account or a unit trust.
Others expect to rely on their CPF savings which can be
withdrawn under the Education Scheme. However, note that CPF
funds can only be used for local studies and have to be
repaid with interest within 10 years.
A number of banks offer savings accounts for children.
However, only POSBank's First Account offers an education
grant along with the savings account. If the parent holding
the account in trust for the child dies or is disabled, the
bank pays an education grant to the child - $100 monthly
from age seven to 12 years and $200 monthly from 13 to 18.
There are conditions though. For example, the child has to
be below five years old to open this account, and under six
years old when an accident happens to the parent.
How are you going to support your child? Want to buy an
insurance, but do you know how? This article will help you
pick an insurance plan for your child in no time.
What's An Education Policy?
It appears that these days, “insuring” the children's
education is an option for many parents. Despite the
generally cautious attitude about spending, education saving
plans are highly valued and will be maintained as far as
Almost all the major insurance firms here offer some form of
education policy. Some, like NTUC Income and Prudential,
offer specific policies for children's education, while
others like John Hancock, GE Life and AIA tailor endowment
policies to fit their client's needs.
An education policy is essentially an endowment policy,
where the owner pays premiums for the term of the policy,
which may be from 10 to 24 years, and receives a lump sum at
maturity. Some of the policies pay out a sum of money once
every few years, normally three years.
This payment comes in handy if you require some funds during
the term of the policy, eg, if you want to send your child
for those extra courses (piano, computer, etc). In fact,
some companies, like John Hancock, have tie-ups with child
education and enrichment service providers.
The main benefit of such an endowment policy is the coverage
and payer security that it provides. If the parent dies, is
permanently disabled or is struck with a major illness, all
future premiums of the policy will be waived, and the child
gets the amount insured at the end of the policy.
Who offers what?
Below is a list of companies that offer various insurance
and endowment policies.