December 21, 2015

As a parent, one of the greatest gifts you can give your child is a quality education. However, the hefty costs involved can put a big strain on your finances if you fail to plan sufficiently ahead.

Based on research compiled by Manulife, the current cost of tertiary education, including living expenses, ranges from S$60,000 for a local university, to S$200,000 if your child is planning to study overseas, such as in Australia or the United States.

Starting early to build your child’s education fund will give you a valuable head start, as you will have a longer period to save and benefit from the power of compounding returns.

Manulife Singapore offers three steps to help you get started:

  1. Understand the full costs involved

The cost of education varies widely depending on whether your child will be studying locally or overseas. Besides tuition fees, there are also living and transport expenses to consider.

To get a better idea of what to expect, use Manulife’s Education Calculator to estimate the cost of your child’s university education as well as how much you need to save to meet any shortfall.

  1. Make use of financial and insurance products

Simply putting aside money in a savings account may not be the best option when building your child’s education fund, as inflation will erode the value of your savings. To combat inflation and make your money work harder for you, a better approach would be to take advantage of different financial products and investments that are available in the market, such as stocks, bonds, unit trusts and endowment plans.

An endowment plan can serve as a useful tool for disciplined savings while providing insurance coverage. Manulife’s Scholar* is an example of an endowment plan that is tailored for your child’s education funding needs. The plan offers three annual payouts to provide funding during your child’s university years, and you can choose to receive the first payout when your child starts university at any age between 17 and 20.

  1. Protect against the unexpected

While building up your funds, it is also important to put in place protective measures to ensure that your child’s education is not compromised no matter what happens. Manulife’s Scholar also offers an optional payor benefit rider to waive future premium payments if something unfortunate were to happen to you or your spouse, so you can be assured that your child’s education will not be compromised.

With the right plans in place, you can secure your child’s education and pave the way for him or her to have a successful future. To learn more about planning to fund your child’s education, speak with Manulife at 6833-8188.

*Scholar, where mentioned, refers to Scholar (II).