Best Education Insurance Policies for CBE in Kenya: How to Build Your Child’s Fund

With the transition to the Competency-Based Education (CBE) in Kenya, a parent might wonder whether there are specific education insurance policies designed for this new system? 

And more importantly, if they do, how do you actually build an effective education fund with them to cover CBE school fees and related costs.

I have good news from you. With the introduction of the CBE curriculum, insurers have stepped in to help parents build an education fund by designing effective education insurance policies with this system in mind.

There are several education savings policies for CBE and in due time, I will reveal to you the best ones and show you how to build an adequate education fund for the CBE curriculum using one of them.

In one of my previous articles, I have shared the real cost of educating a child in Kenya. We shall apply figures in it and use one (1) of the top education insurance policies to build a fund for CBE.

The cost of education has increased significantly in Kenya in the recent past since the introduction of Competency Based Curriculum (CBC), and then to CBE.

Government funding is no longer adequate and parents are bearing astronomical education costs out of their pockets.

Inflation and change in technology are also other factors that have led to increase in education costs.

The future does not look bright for parents, especially those who will not have built an education fund to finance CBE curriculum.

As a parent or guardian, you must start building an education fund this early so that by the time your child reaches the most cash demanding and critical levels of CBE curriculum, you will have a “fat account* to fetch your school fees and related costs from.

This write-up is meant to help you identify the most effective education insurance policies that can help you build a guaranteed education fund for your child.

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What Is An Education Insurance Policy?

An education insurance policy is a disciplined savings vehicle that will help you achieve your ultimate goal; building an education fund for the future school fees of your child.

Education policies instill a savings discipline in you by forcing you to make regular contributions known as premium to your education account.

The amount you contribute depends on your financial ability and your target amount at the end of the savings period.

However, the target amount you must raise at the end of the savings period should be adequate to cover the cost of education at that level.

Top Education Insurance Policies for CBE in Kenya

There are several education insurance policies specifically designed for the CBE curriculum system.

Each upper level of CBE upper takes 3 years to complete. The CBE curriculum structure takes 2,6,3,3,3 format.

This format means a child takes 2 years in

pre-primary, 6 years in primary, 3 years in junior secondary, another 3 years in senior secondary, and lastly 3 years in university/college.

These education policies are, therefore, shaped to give 3 payouts each year or a single lump sum at the beginning of each level.

Top education insurance savings policies for CBE include:

Boresha Elimu Education Plan

Boresha Elimu Education Plan offers a savings period of between 6 to 18 years, adequate enough to cover all CBE levels up to university.

The policy offers 3 payouts in the last 3 years of the savings period. Each payout covers the annual education costs of the target level and the policy should be set to start paying at the beginning of that level so that the payouts fall right at the beginning of the year, when money is needed most for school fees, uniform, transport and other education costs.

In the last 2 years of the savings period, you will enjoy a premium holiday. You will not pay a single coin to Britam. And it is during this time that you shall be receiving the 3 payouts enjoying ultimate peace of mind.

Besides the money benefit, Boresha Elimu features built-in life protection guaranteeing the future education of your child whether you are there or not.

Your life (the policyholder) is protected against death and permanent disability due to illness and accident.

In case of death or permanent disability, the regular premiums that the policyholder makes are waived and the maturity amount is paid to you or the beneficiary when due so that your child can attend school.

The policy also allows you to add an optional death cover, whereby, in the event of death of the policyholder, their family receives an immediate payout to cover their school and living expenses as they wait for the final maturity payout.

If you enroll in this policy, you can make your regular contributions monthly, quarterly, semi-annually, or yearly through M-pesa and bank transfers channels such as standing order and RTGs.

Akiba Savings Plan

Akiba Savings Plan takes a different form and shape. It is suitable for parents who prefer a single lump sum at the beginning of each CBE level.

They then distribute the single payout to each year according to their need and preferences.

Akiba policy has a savings period of between 5 and 12 years. At the end of your savings period, you receive a maturity payout as a single lump sum.

This single lump sum is your education fund. Unlike Boresha Elimu, the policy has no premium holiday, it is a marathon.

However, just like Boresha Elimu, it has life protection against death. If the policyholder dies (may God forbid), premiums are waived and the maturity payout is paid to the nominated beneficiary when due.

Life protection contained in education endowment policies is meant to guarantee the future education of your child, whether you are there or not. This is the element that makes life insurance savings plans superior to other normal savings accounts.

You can also add a death cover as an option for your family to receive an immediate payout in the event of death, as they wait for the maturity of the final payout. This is done at a very small fraction of the premium you will be paying regularly.

In this policy, as in Boresha Elimu, the regular premium contributions are made monthly, quarterly, semi-annually, or annually. This gives you payment flexibility to remit according to how and when you receive your income.

How to Build an Education Fund For CBE

A superior method of building an education fund is using an education savings policy.

Education policy gives you reasonable savings returns while at the same time guaranteeing your ultimate goal of giving your children education through life protection.

Education insurance policy savings returns are not determined by market conditions. They are promised in advance and that is peace of mind to me.

Traditional normal savings accounts offer little savings returns and they do not offer life protection. Again, they do not instill a savings discipline.

The same is true for investment driven savings accounts. Their performance is not guaranteed, they are determined by market conditions or the asset in which they are invested. They also do not offer life protection.

Locking or guaranteeing a future where your child must attend school is the ultimate goal.

To build an education fund with an education insurance policy, you determine the current age or level the child is in and the education level you are targeting in the CBE curriculum.

You also define the type and maybe the name of the school you want your child to attend. The school could be public or private, and if it is a private school you can get their fees structure.

From the information you have already gathered, you can now determine your savings period or term, and the amount of school fees you must raise.

However, to save you from all that hassle, I will help you determine all that right here.

From my previous article on the real cost of education in Kenya, we have school fees for both private and public CBE schools.

Here is a table showing the average school fees for CBE private and public schools and years to completion for each level.

For you to create a serious education fund, we shall use CBE private school fees as our guideline.

If you are targeting school fees for Junior Secondary, then from the table above, you need to raise KES 80,000 to KES 700,000 each year. This means a total of KES 240,000 to KES 2,100,000 for the 3 years.

If your target is Senior Secondary, you need to raise KES 150,000 to KES 1,500,000 each year or a total of KES 450,000 to KES 4,500,000 for the 3 years.

For university level, you need to raise KES 100,000 to KES 600,000 each year or between KES 300,000 to KES 1,800,000 for the 3 years of university education.

We are sure that in the future school fees will increase at a particular margin due to inflation, technology change, curriculum change, among other reasons.

Based on that fact, we need to adjust the current cost of education by 30%. This is an arbitrary figure I have used. So, the above figures will increase by 30%.

Example I: Building An Education Fund For Junior Secondary

With the arbitrarily 30% applied, the education fund you need to build for junior secondary will now be between KES 104,000 to KES 910,000 annually. For the 3 years of CBE, you will need to raise KES 312,000 to KES 2,730,000.

To simplify all this we shall use Boresha Elimu Education Plan, purely designed for CBE. We said Boresha pays 3 bonuses distributed along the 3 years of your target level.

We shall take the maximum fees you can pay for CBE Junior Secondary in a private school i.e KES 910,000 each year. So we need Boresha Elimu to pay KES 910,000 each year.

Let’s assume you are 40 years old. If you are younger the better the savings returns and vice versa. Insurance models are based on risk. Age is a measure of risk. We shall make another assumption, that your child is zero years old. We put another fact here. If you start your savings plan early you get better returns and vice versa.

To reach Junior Secondary level when the child is 0 years old, it shall take them 10 years. So you will save for 10 years.

To raise KES 910,000 each year, for 3 years, you will be contributing around KES 17,000 per month for the next 10 years.

At the end of the savings period, you shall receive a total of KES 2,730,000.

Example 2: Building An Education Fund For Senior Secondary

If you are targeting CBE Senior Secondary, you will need to raise between KES 195,000 to KES 1,950,000 each year for 3 years.

Note we have adjusted the above figures by 30%. We shall also extend to this example the assumptions we have made is example 1.

That you are 40 years old and your child is 0 years old.

For your child to reach CBE Senior Secondary, it shall take them 13 years from now. This means you shall have a savings period or term of 13 years.

We take the maximum amount, again. For Boresha Elimu to pay KES 1,950,000 each year for 3 years, you need to contribute around KES 26,000 each month for a period of 13 years.

At the end of the savings period, you shall get a total education fund of KES 5,850,000.

Example 3: Building An Education Fund For University/College

For your child to get to university from now, assuming the child is 0 years old, it shall take 16 years.

We make another assumption here, again. That you are a 40 years old individual.

To raise school fees of KES 780,000 each year for university, having applied the 30% adjuster, you will need to save around KES 7,500 each and every month for 16 years.

At the end of the savings period or term, you shall have received KES 2,340,000.

In this case, we have used Boresha Elimu, again, to raise the funds.

That is how you build an education fund for CBE curriculum using education insurance policies.

NB: Please Note That These Are Just Simulated Examples And Actual Figures Will Definitely Change.

Why Will They Change?

• Due to the calculator used (assumed Boresha Elimu Calculator)
• We have made assumptions on the age of your child, age of the policyholder, and school fees.
• The actual quote will use the actual Boresha Elimu Calculator and the correct information regarding you and your child. However, figures will deviate slightly from our calculator.