Getting a college education plan is a smart move for parents
Getting a college education plan is a smart move for parents. One of the essential needs you have to prepare for as a parent is your child’s education. In reality, it will require a big chunk of your budget, more than food and clothing.
Naturally, a child goes through different developmental stages and will not stay a baby forever. Soon the elementary years will happen, and eventually, you might be surprised that it will be time for college. It is a known fact that tuition fees now cost a lot, and they get higher every year. In addition, it will be more expensive if your child’s course is only offered at private and exclusive institutions. With this in mind, it will be wise to plan ahead so you will not be overwhelmed by future expenses.
There are some items that should be considered when setting up an education plan. These are some of the basics:
Current Financial Status of the Parent
While it is ideal to plan and start preparing for an education fund, you first need to look into your cash flow and your current budget priorities. As a general principle, you need to first allot an emergency fund before budgeting for any other investment. If you have already set up funds for this account, then you can proceed with other allocations.
Make a survey first of the current college tuition fees of the top-performing colleges and universities in the country before allocating a target goal. Yes, it may be too early to decide which school or course your child will choose later on. However, this will give you an idea of how much to prepare. You can also check the inflation rate on tuition fees for additional projections. Also, there is this TVM calculator that can help you compute a tentative target fund. You can download it for free or use the online application. Future values of your budget goal can be projected using this tool.
One major consideration in securing a college plan is the child’s current age. You will have many options if the child is five years old or younger. If the child is already 10 years old or older, then you will have limitations. Why? Because if you decide to take out an education plan from an insurance company, premiums are influenced by the age bracket. The higher the age, the greater the price value of the plan.
Insurance and Preneed Company
There are many companies in the Philippines that offer education plans. Always be careful and consider the following factors before making a decision:
- Company standing. Look for a company that has an established track record. There were a number of preneed and non-life insurance companies that had already closed in the past. Many Filipino policyholders of those companies were very disappointed. They may have fully or partially paid for their plans but could no longer avail themselves of them. These preneed companies were not able to satisfy the requirements of the Securities and Exchange Commission (SEC) during the evaluation period.
- Service reputation on claims and other services. It is very important that an insurance company be known not only for its capitalization or rank status but also for its services. A proven service-oriented company will protect its clients trust and confidence.
- Range of products. Not all people need or like the same product. Choosing an education plan may depend on your budget, the age of your child, the school, and other related factors. It would be vital if there were many products to choose from that would meet your specific needs.
If you have already determined the company where you want to buy your education plan, you can approach a financial advisor. In this way, you can be referred to a more appropriate product. Anyway, the services of most financial advisors at insurance and investment companies are free of charge.
One of the basic fundamentals of humanity is the right to education. Therefore, it is the parent’s responsibility to send the child to school. As to what type of school, it is not a child’s right but a privilege. Some schools have certain requirements that necessitate the qualifications of both the child and the parent. Meeting the academic criteria may be a basis for admission. Likewise, the financial capability of parents may also be needed. Nevertheless, being prepared financially is an advantage. And getting an education plan is still a smart move for parents.