This is the question I always ask every time I meet married couples or single parents. And it always amazed me that their answers are always the same: to give the best education to their children.
And those were the exact words I heard from the couple that I met two weeks ago. I could feel their enthusiasm and desire to start preparing for their children’s future. The couple is in their late 20’s, both working, and have two children aged 5 and 1. After considering all the factors such as their preferred university and current tuition fees, we came up with the projected total cost of education for their two children. It would cost them around P3,000,000.
From their case, we can see that they have more than a decade to save for their children’s college. This is an ample amount of time where their money can grow way beyond their saving accounts’ interest if invested in the stock market.
But what if one or both of the parents are taken out of the picture? What would happen to their children’s future?
This is the common story we see in television dramas or we hear from our friends or neighbors: the parents died, then the child stopped attending school, started working even at a young age, and sometimes get involved in vices or crimes.
And you don’t want this kind of story.
That’s why aside from your PLAN A, which is saving or investing for your child’s education, you need to have your PLAN B– you need to be protected through a life insurance. The good news is you don’t have to think or devise your own ways on how to execute your PLAN A and PLAN B, because Insular Life is here to help you with your needs and to achieve your goals.
Based on the illustration, with an annual investment of 90,000 each for 10 years, or a total of P900,000 each, the couple can be assured that whatever happens, their children’s future would not be at stake. The investment value will be used as college education fund and life insurance will serve as a protection if ever something will happen to the parent. You can also see that there is as surplus from your projected cost of education. You can use this to continue the plan which can be used for your retirement, or use this amount as a graduation gift to your children, or to start a business. It’s like hitting three birds with one stone.
But what if the couple decides to go only with PLAN A and save the same amount in a time deposit? Let us see the illustration below:
Parents, do you have your PLAN A and PLAN B in securing your child’s future? Now is the perfect time to plan. Later on, your child will have a different and the best story to tell because you choose to plan and act now.
ABOUT THE AUTHOR:
Sarah Grace N. Esteban, CPA is a financial advisor at FinancePH and the Director of Publications and Communications of the League of Young Financial Educators (LYFE), a non-profit organization which seek to help young individuals to be financially literate. Aside from her advocacy, she loves to write because she believes in changing the world, one reader at a time. You may reach her through her personal blog www.sarahgraceesteban.com.