Britam Msingi Poa Review: Is This the Best Way to Save for School Fees?

The rising cost of education in Kenya, year after year, due to inflation, curriculum systems changes, and change of education structure such as advancement in education related technology, continues to exert financial pressure on parents creating untold anxiety.

Britam Msingi Poa education policy is one of the education savings plans with life protection seeking to eliminate this anxiety in parents by guaranteeing future education of their children, through a long-term educational planning.

The question we intend to answer today is, is Britam Msingi Poa education policy one of the best ways to save for future school fees and related costs? To answer this question, I shall tell you what Msingi Poa Education Plan is, its features, how it works, benefits, drawbacks, its requirements, and a competitive analysis with normal bank savings account and Sacco.

What is Britam Msingi Poa?

Msingi Poa is an education endowment policy, meaning it is a cash value life insurance. It combines a savings plan and life cover/protection with a goal of building an education fund for the future school fees and related costs of a child’s education.

The savings plan in Msingi Poa generates savings returns until the maturity of the policy. The parent makes contributions(premiums) regularly, monthly, quarterly, semi-annually, or yearly, according to their ability to pay, that goes to the education fund and life cover.

The life protection in the policy involves protecting the life of the parent/policyholder against death due to illness or accident.

This ensures that the children continue with their education whether the parent is there or not, therefore guaranteeing their future education.

The policy is best for planning for primary, secondary, or university cycles.

Key Features & How It Works

• Policy Term: Msingi Poa education policy has a policy term of 8 to 22 years. This means the policy allows you to save for a minimum of 8 years and a maximum of 22 years.
• Entry Age: As a parent or guardian, you can enroll if you have a minimum age of 18 years and a maximum age of 55 years.
• Maximum Age On Cover: If you enroll, your policy will remain active until you are 70 years old. This means the maximum age on cover is 70 years. I help you understand better, if you are 55 years old, you can only take a policy term of 15 years and below so that the policy matures when you are 70 years old or below.
• Guaranteed Bonuses: At maturity, the policy pays 4 guaranteed bonuses in the last 4 years of the e policy.

• Premium Waiver: In the last 3 years of the policy term, you stop paying the premiums. This is the premium holiday period in Msingi Poa. You do not pay a single coin once the first bonus is paid to you.
• Minimum and Maximum Sum Assured Without Medicals: If you enroll and you do not go for a medical checkup (without medicals), the minimum sum assured (each bonus is equal to the sum assured) you can take is KES 100,000. The maximum sum assured without medicals you can take is KES 15,000,000.
• Minimum and Maximum Sum Assured With Medicals: If you choose to go for a medical checkup before enrolling, the minimum sum assured you can take is still KES 100,000. There is no maximum sum assured with medicals.

• Minimum Contributions: The minimum policy contribution/premium is KES 3,000 per month.
• Discounts: Other than paying your premiums/contributions monthly, if you opt for quarterly/semi-annually/yearly payment schedules you will get premium discounts. 
• Death Benefit: If the policyholder dies, a death benefit equal to the sum assured is paid immediately. All future contributions/premiums are waived and the 4 guaranteed bonuses, each equal to the sum assured, will be payable. For the death benefit to be applicable, there is a one-year waiting period. In case a natural death occurs within the waiting period, the nominated beneficiary receives cumulative premiums and the contract is terminated. If the death happened due to an accident during the waiting period, the nominated beneficiary receives a death benefit equal to the sum assured and the premium waiver is applied and the 4 bonuses will be paid according to the schedule.
• Tax Relief: For policies with a term of 10 years or above, they are eligible for a tax relief (10% of the premiums, capped at KES 5,000 per month or KES 60,000 per year).
• Policy Loan: After the policy has been in force for a minimum of 3 years, a parent is eligible for a policy loan equal to 80% the cash surrender value. The loan is payable within 3 years, and the interest rate is 14.5% (please note the interest rate may change time to time).
• Msingi Poa has early exit options: If the parent feels the want out, you can do so after the policy has been in force for 3 years (36months). The payment is made to the policyholder and the contract terminates. The exit options include cash surrender value and paid-up options. From the 37th month onwards you can ask for your cash back through a cash surrender option. The amount you receive is determined by the insurance underwriter. In a paid-up option, the policyholder asks not to continue paying the premiums or stops to pay the premiums altogether and waits until the policy matures as scheduled. At maturity, the parent receives a reduced sum-assured determined by your contributions.

Pros and Cons of Msingi Poa Education Policy

Msingi Poa Advantages

• Education policies introduce you to a disciplined savings plan helping your goals, educating your children in the near future.
• If you adopt a policy of a 10-year term or more, you will get a tax relief of 10% in the premium capped at KES 5,000 per month/KES 60,000 per year.
• Msingi Poa has a premium waiver in the last 3 years of the policy term. The moment you get your first bonus, you stop remitting premiums. This gives a parent some peace of mind.
• The policy gives good savings returns, especially for long policy terms. The longer the policy term, the bigger the savings returns. That is why you should avoid starting an education policy late. I believe his article on when to begin an education policy will be of great help to you.

Msingi Poa Disadvantages

• The policy is a long-term commitment and you must be up to the task.
• You cannot access your money until the scheduled time for receiving your bonuses, hence lower liquidity compared to a regular bank account. However, this is the aspect that helps you achieve your long-term future education goal.

Comparative Analysis

How does Msingi Poa compare to a Sacco savings and normal bank account savings.

The only thing that these two beat Msingi Poa is on liquidity, and liquidity is an enemy to saving for your future goals like building an education fund for the future.

Long policy terms give substantial savings returns while at the same time offering a parents life cover ensuring that the future education of their children is guaranteed whether they are there or not.

A normal savings account barely gives any returns and there is no life cover. If the account holder dies, that is the end of their education plans.

Their dream of securing the future education of their children dies with them.

Msingi Poa is best for parents who want a disciplined, hands-off way to guarantee future school fees and related costs.

You use this calculator to learn how Msingi Poa works and use it to plan your education. The calculator just gives you estimates,

For a free quote and guidance to plan for your child based on their age and grade and education system they are in, please call or WhatsApp through the number provided.

Thank you, my dear reader.