Every parent longs for a stress-free, comfortable and bright future for their beloved children. And most parents work tirelessly to ensure that sons and daughters do not face any financial hardship in life.
But many people in Bangladesh, especially those in the lower, lower middle and middle income groups, often struggle to cope with the rising cost of living. And they must dip into their pockets to meet the expenses of education of children, which also increase.
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Thus, questions remain as to how parents can afford to send their children to a good school, ensure their higher education and, most importantly, ensure a relatively stress-free future for them.
In such a scenario, a child rearing insurance policy, child protection plan, or child development plan could be of great help. The policy will provide financial protection and education to beneficiaries if their future becomes uncertain if parents are not there unexpectedly.
MetLife Bangladesh has such insurance policy for child education under the name of Education Protection Plan. It also has the Education Protection Plan Plus, which offers 10 different complementary product options.
“But the main objective of the policy is the same, which is to ensure the education of a child. It is different from other policies because of the additional benefits,” said Fahim Islam, executive vice president of products and services. solutions at MetLife Bangladesh.
A parent aged 21 to 55 can open the policy at MetLife Bangladesh.
If a child is between 30 days and five years old, the amount of coverage will be a minimum of 1 lakh Tk and a maximum of 20 lakh Tk. For a child aged six to 15, the sum insured varies from Tk 1 lakh to Tk 25 lakh.
“The premium amount is a bit higher for the first installment of the coverage because the infant mortality rate is higher for the group compared to the second group,” Islam said.
The duration varies from 10 to 21 years.
The premium can be paid monthly, quarterly, semi-annually and annually. In the case of a monthly payment, an electronic funds transfer is applicable.
Each insurance policy has two components: savings and protection. The education protection plan offered by most insurers in Bangladesh covers both.
“We have tailored the policy with the interests of policyholders and beneficiaries in mind, so it’s unique compared to other policies,” said Sheikh Khairuzzaman, deputy general manager of Jiban Bima Corporation.
The policy is flexible. The amount of coverage is paid at the end of the policy term. The money can be used to pay for children’s higher education.
“But if the beneficiary completes his studies before the deadline, the money will be very useful to start a career, to cover the expenses of the marriage or to support other important events in life,” said Khairuzzaman.
Md Jalalul Azim, Managing Director of Pragati Life Insurance, says education protection plans offer many benefits.
In the event of the unexpected death of the insured, the family will immediately receive 10% of the insured capital. Payment of future premiums will be waived for the remaining term of the policy, but the policy continues to exist until it expires.
One percent of the insured capital will be paid each month for the beneficiary’s studies until the contract expires. After the term ends, the beneficiary will receive the full benefit at maturity, Azim said.
In the unfortunate event of the death of the child, the sum insured plus the accumulated premium is payable.
If the insurance period at the time of the child’s death is less than six months, the family will receive 25 per cent of the sum insured. If it’s less than a year, they’ll get 50%.
If it is less than two years, the policyholder will get 75 percent of the face amount, and it will be 100 percent when the term of the policy is more than two years.
Fahim Islam says that if the insured adds accident coverage to the main policy, it will provide an additional benefit.
For housewives and policyholders aged 25 or under, the maximum coverage will be Tk 25 lakh.