• Best Education Endowment Plans

    Best education endowment plans Singapore

    With the rise in cost of living, it is imperative that we get as early a head start on our savings. With inflation on an upwards trend, the money we save today will fall short tomorrow. So what do we do when it comes to more important expenses like our children’s education? Singaporeans with a family have one more expense to be worried about and that is their child’s education. Setting aside a portion of one’s paycheck is a good habit to have but with education costs set to rise to almost 70% of a person’s yearly income, it will take you a long time before you can successfully secure the required funds.

    An education endowment plan can be the answer to your worries. These endowment plans act like a savings plan but adds investments to the mix to give you better returns than an ordinary bank could. Albeit they have the element of investment, the returns are modest as it acts more like a savings plan. But what it lacks in high returns, it makes up for in low risks and guarantees. You get a lump sum payout when the plan reaches maturity.

    While the lower returns might put you off, remember that any swing in the market could adversely affect your funds and you can even end up further behind than when you started. An important thing to keep in mind when it comes to education endowment plans is the fact that you can lose some money if you terminate the plan before it reaches maturity. Endowment plans also have long tenures ranging from 15 to 25 years so be sure you have enough money to cover other expenses that might crop up during this period.

    The earlier you start your education endowment plan, the better such that, by the time your children are ready for higher education, your endowment plan should be reaching maturity. Below we present to you our pick of the best education endowment plans in Singapore, based on the benefits it provides. Read on to find the right education endowment plan for you.

    5 Best Education endowment plans in Singapore

    Here are some of the top endowment plans that we think give you the best perks:

    ManuEdu First – Education Endowment Plan

    This endowment plan offered by DBS gives you high returns of up to 1.43% p.a. to ensure you have enough savings to fund your child’s education.

    Advantages

    You will get the following benefits on ManuEdu First Education Endowment Plan:

    • Guaranteed returns: With this plan you can get back at least 100% of the total premiums paid during the policy term.
    • Limited premium payment term: With this policy you only need to pay the premiums for 10 years. The earlier you start, the lower your premiums will be. This means that if you start the plan when your child is a newborn, you enjoy lower premiums as compared to acquiring the plan when your child is 5 years old.
    • Multiple payouts: You can enjoy 2 Fixed Cash Benefits or FCBs which are paid prior to the payout age. Upon reaching the payout age, you can either choose to receive your payout through 4 yearly FCBs or choose to accumulate the FCB with Manulife to earn additional interest.
    • Easy to acquire: The policy can be acquired hassle-free and requires no medical assessments. It even covers your child for Terminal Illness and Death.
    • Optional riders: The plan offers additional riders that ensure your child’s education will continue even if an unfortunate circumstance was to befall you. Riders include Payor Premium Waiver, Cancer Care Premium Waiver and Level Term Rider.

    Disadvantages

    Here are some components where the plan doesn’t do too well:

    • No guarantee on interest: The FCBs accumulated with Manulife have no guarantee of accruing additional interest. The guaranteed payout when the policy matures will only be given in case there were no alterations to the original policy till maturity and if the policyholder has not taken up any optional rider.

    Aviva MyEduPlan

    Ensuring your child’s education is the biggest insurance you could give for your child’s future. With the Aviva MyEduPlan, you can enjoy a safe and secure savings plan that will allow you to finance your child’s university education.

    Advantages

    You will get the following benefits on Aviva MyEduPlan:

    • Guaranteed payouts: The plan gives you a 100% guarantee on the capital and also gives you the benefit of 4 guaranteed cash benefits that are given when the policy attains payout age.
    • Multiple payouts: You can enjoy 2 Fixed Cash Benefits or FCBs which are paid prior to the payout age. This payout can be used for miscellaneous expenses such as laptop purchases or for other student requirements. The payout age can be chosen as per your child’s age. The available options are either when your child attains the age of 19 or 21.
    • Limited premium payment term: With this policy you only need to pay the premiums for 10 years. You also get the choice of making these premium payments through multiple modes such as monthly, quarterly, half-yearly, and yearly.
    • Easy to acquire: The policy can be acquired through a simple, hassle-free process.
    • Optional riders: The plan offers additional riders that ensure your child’s education will continue even if an unfortunate circumstance was to befall you. Riders include EasyPayer Premium Waiver, Cancer Premium Waiver and EasyTerm rider.

    Disadvantages

    Here are some components where the plan doesn’t do too well:

    • No guarantee on bonus: The guaranteed cash payouts with this policy only guarantee 100% of the total premiums paid towards the policy. The policy offers bonuses as well which comprise of revisionary and terminal bonuses, both of which are not guaranteed.

    OCBC MaxEdu Goal Education Endowment Plan

    This plan from OCBC offers you an affordable option to save up for your child’s higher education. With living costs on the rise, this plan is ideal for you to get a head start on your savings and help you secure your child’s future.

    Advantages

    You will get the following benefits on OCBC MaxEdu Goal Education Endowment Plan:

    • Guaranteed payouts: The plan gives you a 100% guarantee on the capital and also gives you the benefit of receiving a bonus which can drive up your returns to almost 135% of the sum assured.
    • Multiple payouts: You can enjoy Fixed Cash Benefits or FCBs which are paid when the policy attains maturity. The payouts happen when your child attains the age of either 18 or 20 years. The policy also gives you non-guaranteed cash benefit at the end of the payouts. The payout options are designed in a way to cater to your child’s 3 or 4 year university course.
    • Easy to acquire: The policy can be acquired through a simple, hassle-free process.
    • Additional cover: Throughout the tenure of the policy, your child can enjoy additional covers such as protection against death, total or permanent disability and any terminal illnesses. The policy can be acquired when your child is between the ages of 1 month and 12 years.

    Disadvantages

    Here are some components where the plan doesn’t do too well:

    • No guarantee on bonus: The non-guaranteed cash bonus offered by the policy is based on a projected investment rate of return which is 4.75% p.a. The policy however does not guarantee that the projected rate could be attained and as such, the actual benefits received may vary.

    Income – VivoChild Education Endowment Plan

    This endowment plan offered by income gives you high returns of up to 3.75% p.a. to ensure you have enough savings to fund your child’s education.

    Advantages

    You will get the following benefits on VivoChild Education Endowment Plan:

    • Guaranteed returns: With this plan you can get back at least 100% of the total premiums paid during the policy term.
    • Limited premium payment term: With this policy you only need to pay the premiums for 5 or 10 years. The policy also gives you the option of paying premiums throughout the duration of the policy tenure except for the last 2 months. The premiums can be paid either monthly, quarterly, half-yearly, and yearly.
    • Easy to acquire: The policy can be acquired hassle-free and requires no medical assessments. It even covers your child for Terminal Illness, total or permanent disability, and Death. The policy will also provide a daily hospital benefit for specific situations.
    • Optional riders: The plan offers additional riders that ensure your child’s education will continue even if an unfortunate circumstance was to befall you. Riders include Payor Premium Waiver, Enhanced Payor Premium Waiver, Early Cancer Waiver, and Dread Disease Premium Waiver.

    Disadvantages

    Here are some components where the plan doesn’t do too well:

    • No guarantee on interest: The cash payouts accumulated with VivoChild have no guarantee of accruing additional interest. The investment return rate is projected at 3.75% but there’s no guarantee of these returns and hence the total payout received might vary.

    Great Eastern Supreme Education Endowment Plan

    Ensuring your child’s education is the biggest insurance you could give for your child’s future. With the Great Eastern Supreme Education Endowment Plan, you can enjoy a safe and secure savings plan that will allow you to finance your child’s university education.

    Advantages

    You will get the following benefits on Great Eastern Supreme Education Endowment Plan:

    • Guaranteed benefits: The policy will provide you with guaranteed payouts. You can choose to either receive these payouts or you can opt to accumulate them with Great Eastern to earn interest.
    • Flexibility in premiums: The policy allows you to pick one of two premium payment terms which are 10 years and for the entire duration of the policy except the last three years before maturity. You can choose a policy which offers two maturity ages where your child must attain either 22 or 24 years.
    • Optional rider: With the Parent Assurance Benefit Rider, you can ensure your child’s living expenses are taken care of even if the unexpected were to happen to you. Other optional riders include coverage against accidents with the Payer Benefit Rider, childhood illnesses with the Junior Living Assurance Rider Plus, and coverage against accidents with the Junior Protector Plus rider.

    Disadvantages

    Here are some components where the plan doesn’t do too well:

    • No guarantee on interest: The cash payouts accumulated with Great Eastern have no guarantee of accruing additional interest. The investment return rate is projected at 3% but there’s no guarantee of these returns and hence the total payout received might vary.

    How to choose the right education endowment plan

    Below are some tips on how you can choose the right education endowment plan to suit your needs:

    • Firstly, you need to figure out when you want to start the plan. These policies have long tenures and you can lose money if you terminate the plan early so choose a policy early enough such that you still have savings left over to meet other expenses that may crop up.
    • Next you need to consider your premium payment term. You can either pay larger sums for shorter tenures or pay smaller sums for longer durations. The premium payment mode should also be considered. Whether you want to pay it annually or monthly or half-yearly or quarterly.
    • Third, you need to settle on the type of payout you’d like. Lump sum payments give you more cash on hand but regular payouts allow you to have enough money to concentrate on other financial goals.
    • Lastly, you need to choose a high projection rate on your policies. The projected rate does not mean your bonus is guaranteed but only serves as an indicator as to how much you could potentially earn.
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