Child Education Planning
Every parent is concerned over their child’s tertiary education funding.
A tertiary education in the local university (e.g. NUS or NTU) easily racks up a sum of $68,000 (for 4 years of tuition) 20 years from now.
TM Asialife has relaunched their popular TM Education (limited payment) plan and it’s timely for a review with other similar plans in the market. In summary, this is a limited premium term savings plan catering to your child’s college education. It comes with a staggered payout feature where 40% of sum assured is paid out 2 years prior to maturity; another 40% one year to maturity; and last 20% paid out together with accumulated bonuses at maturity.
For the purpose of comparison, the target sum of $68,000 is achieved via these 3 plans. NTUC PayMyUni and Manulife Scholar plans both feature the staggered payout arrangement.
In this scenario, Insured Child is a newborn, and Parent is his 30yr old father. Maturity payout is due at age 21 of Child.
TM Education (LP) | NTUC PayMyUni | Manulife.. Scholar | |
Sum Assured | 43,000 | 35,000 | 35,000 |
Maturity Payout (5.25%proj) | 68,942 | 68,114 | 69,082 |
Maturity Payout (guarantee) | 43,000 | 35,000 | 35,000 |
Annual Premium | $ 3,701.40 | $ 1,991.70 | $ 2,274.09 |
Premium Term (yrs) | 10 | 21 | 19 |
Total Outlay | $ 37,014 | $ 41,826 | $ 43,208 |
Premium inclusive of premium waiver on policyowner life | |||
TM Education (LP) Guaranteed Net Yield Positive! | |||
Net Yield table (pa) | Coupons Accumulated | ||
Guaranteed | proj 3.75% | proj 5.25% | |
TM Edu (LP) | 0.91% | 2.54% | 3.81% |
NTUC PayMyUni | -1.65% | 2.76% | 4.24% |
Manulife Scholar | -1.78% | 2.51% | 3.81% |
Net Yield table (pa) | Coupons Paid-Out | ||
Guaranteed | proj 3.75% | proj 5.25% | |
TM Edu (LP) | 0.98% | 2.56% | 3.81% |
NTUC PayMyUni | -1.87% | 2.71% | 4.28% |
Manulife Scholar | -1.99% | 2.53% | 3.81% |
As an additional note, Manulife Scholar allows the dual payor benefit feature where premium waiver includes insuring the spouse of the policyowner in the same plan. This means that if either parent (policyowner or spouse) suffers the unfortunate (premature death/TPD/Critical Illness), future premiums of the education plan are waived.
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