INSURERS MAKING EDUCATION AFFORDABLE
SHABBIR H. KAZMI
Feb 22 - 28, 2010
There cannot be any doubt that the cost of education, particularly higher education is becoming unbearable for the parents. It becomes almost impossible to pay the fees of a student studying medicine, business administration and engineering in case bread earner of the family dies. Ironically many insurance companies offer education plans but the general awareness about these is minimal. Even those who have the knowledge term these 'agonizing'. Therefore, it is necessary to first understand need of an individual, his/her payment capacity and then to select a plan which serves the need most efficiently.
Various companies offer plans to satisfy the needs of people belonging to different income and age groups. However, for better understanding only two plans are being discussed. It is strongly suggested that people should talk to the representatives of as many companies as possible and then make the decision.
Standard Chartered Bank's Taleem is an education plan exclusively designed to cater to clients needs, underwritten by EFU Life Assurance Ltd. It facilitates wise planning of a financially secure and comfortable tomorrow for the children, no matter what the uncertainty of life. Taleem guarantees a minimum amount payable on maturity of the plan. The amount payable is equal to the sum assured of the plan or the fund value at the time of death, whichever is higher. The purpose of Taleem is to provide a substantial amount for the child at the time of his/her higher education.
The plan offers a dual saving option that allows hassle-free, cost effective saving through a single plan for up to two children. The plan initially may be taken for the education planning of one child. Later, during the term of the plan, if one wishes to include another child, he may do so by increasing the annual contribution and changing the maturity date.
Taleem gives the flexibility by catering to the education needs of the child at key educational milestones. The parent can make partial withdrawals to provide the necessary flow of funds for education.
Every contribution in Taleem is invested in an internal investment fund of EFU Life called the 'EFU Managed Growth Fund'. The contributions are utilized for buying units of the fund at the prevailing offer price. The objective of the fund is to maximize capital growth by investing in a balanced portfolio spread across a wide range of shares, government and other fixed interest securities and cash. The fund is managed by investment experts who adjust the mix of underlying investments in the light of economic conditions and investments opportunities.
Children's future education expenses do not come at once. Often there might be a huge cost with extra expense over subsequent years. To match the need of the future education expenses of the child, Taleem provides the facility to withdraw the full maturity value in 4, 5 or 6 annual installments. At maturity, provided all premiums have been paid under the policy, EFU Life pays a maturity bonus. This Education Bonus will be paid in the form of an extra unit allocation into the policy.
The one time final unit allocation at maturity will be: a) 10% of the average basic plan premium paid during the entire policy term if the plan term is up to 15 years, b) 20% of the average basic plan premium paid during the entire policy term if the plan term is 16 years and above. The extra allocation will give an immediate boost to the final maturity value which will help the assured parent or the family to better achieve the purpose of the fund accumulation for education of children.
In the unfortunate event of death of the assured parent, Taleem would ensure that the targeted fund at maturity is achieved; EFU Life will continue to make the contributions, so that the future educational planning of the child is not discontinued. This ensures that the required funds are available for the child's future education, even if the parent is not there.
Taleem gives an option in which a quarterly income (up to 25 % of the basic annual premium) is paid to the family, in case of the unfortunate death of the parent during the plan term. In case of inability of the assured parent to continue any occupation due to permanent disability, the premium is waived. However, the benefits of the plan continue. This optional feature ensures that the required funds are available to meet the child's education expenses, even if the parent is not there. The minimum annual premium required for Taleem is Rs 15,000. Taleem is available to individuals of 18 years to 60 years of age. The applicable savings terms are from 10 to 25 years.
Child Education and Marriage Assurance is a plan offered by the State Life Insurance Corporation (SLIC) for the protection of child's future is an attractive plan. It provides a lump sum benefit for the child at the completion of the policy term. On completion of term of the policy, full sum insured together with the accrued bonuses become payable to the policyholder. If case of death of the policyholder dies before completion of the term, a family income benefit of Rs 240 per 1000 Rupees sum insured per annum is paid to the child until the completion of policy term. Further, future premiums under the policy are waived and policy remains in force with full sum insured and continues to participate in State Life's surplus and receive bonuses. Upon the completion of policy term, the child gets two options of either getting the proceeds in a lump sum or in five equal installments.
Child Education and Marriage Plan suits the parents who are conscious about the future of their children. The term of the plan is such that the lump sum benefit becomes payable when the child attains a predetermined age of 18, 21 or 25 years. These ages may be chosen considering the occasion at which children generally need financial assistance for higher education, marriage, or setting up business. Depending upon an individual needs, the plan is available in two separate versions of with and without built-in family income benefit. In addition to parent, this plan can also be affected by grandparents, uncles, aunts or any other person who is paying for the maintenance of the child.
PAKISTAN'S LIQUID FOREIGN RESERVES POSITION
The total liquid foreign reserves held by the country stood at $ 14,322.5 million on 13th February, 2010.
The break-up of the foreign reserves position is as under: -