Education insurance gaining popularity

Kohinoor Begum did not face an uncertain life after the death of her husband. Her husband had bought an education insurance policy from a multinational company for their child. He had died four years before the policy matured, but his only child would receive Tk 2,000 per month till 2034 to cover educational expenses.

Many parents like Kohinoor are taking an interest in buying education insurance policies to ensure a safe future for their children. That is why such policies are becoming more and more popular. 

Fourteen life insurers currently offer education insurance under a scheme named Educational Insurance Service.

They are: MetLife, Best Life, Chartered Life, Fareast Islami Life Insurance, Meghna Life, Mercantile Islami Life Insurance, National Life Insurance, Popular Life Insurance, Pragati Life Insurance, Protective Islami Life Insurance, Sandhani Life, Sonali Life, Zenith Islami Life, and Sunflower Life Insurance.

Other life insurers offer education insurance under a scheme named Child Protection Plans.

Apart from these, the Insurance Development and Regulatory Authority (IDRA) has launched Bangabandhu Shikkha Bima marking Bangabandhu’s birth centenary. The scheme received an overwhelming response from parents while Jiban Bima Corporation is initially acting as the insurer.

The scheme, with has covered 26,000 people within a year of its launch, comes with an annual premium of Tk 85. Parents can buy the policy for their children aged between three and 18. If the policyholder dies, the child will get Tk 500 per month for 18 years.

The IDRA was working to increase the number of students under this scheme, said its Director Md Shah Alam.

He said every citizen should get an education insurance policy and companies offer various facilities under Bangabandhu Shikkha Bima to cover children’s educational expenses.

“About 10 percent of the life insurers’ total premium is currently collected through education insurance. This scheme will become more popular if it is promoted among parents,” he also said.

The premium of the country’s life insurance companies was Tk 10,260 crore at the end of last year. They raised about Tk 1,026 crore through education insurance.

“Chartered Education Plan is one of the top five policies our company offers. We are getting a lot of responses from customers,” Chartered Life Insurance Company Chief Executive Officer SM Ziaul Haque said.

He said the beneficiary would get a stipend for 10 years after the maturity of the policy and an educational assistance allowance if the policyholder dies.

The minimum amount of the policy is Tk 10,000 and the maximum can be determined as per the policyholder’s wish, he also said, adding premiums could be paid annually, half-yearly, or quarterly.

Jalalul Azim, chief executive officer of Pragati Life Insurance Company, said education costs were increasing day by day, which was worrying parents.

“We have introduced education insurance considering our children’s future. Our product is very popular among parents.” Monirul Islam, chief executive officer of Bengal Islami Life Insurance, said education insurance is an attractive scheme to cover children’s higher education expenses.

“But except for a few companies, the scheme has not gained much popularity yet. On the other hand, Bangabandhu Shikkha Bima is becoming very popular,” he said.

He further said the number of dropouts in villages would reduce the most if education insurance became popular.

MetLife Bangladesh’s Head of Communications Saif Rahman said Education Protection Plan is one of their top three schemes.

Higher education expenses had been rising for many years and MetLife’s Education Protection Plan would enable parents to ensure a safe future for their children by planning their educational needs in advance, he added.