Securing your child’s future: Why parents must consider life insurance education policies

By Festus William AMOYAW

Recently, I had two encounters that reinforced my belief in the importance of Life Insurance and highlighted the low awareness surrounding it in Ghana.

These experiences further convinced me that many parents, salaried workers, and self-employed individuals underestimate the impact of life insurance in financial planning.

As a strong advocate for life insurance, I have come across numerous real-life stories that underscore its benefits. This belief led me to establish Figtech and develop MyFIG—an app that enables users to compare life insurance policies and purchase them conveniently.

However, today’s discussion is not about the company and products but rather about how life insurance education policies can help parents secure their children’s future.

Two eye-opening encounters

In the past two weeks, I had two interactions that reaffirmed the need for greater education and awareness on life insurance.

The first involved a life insurance agent I met at my office reception. After her pitch, I informed her that I already had multiple policies with her company. (Unlike general insurance, with life insurance, you can have multiple policies.) She offered to check the status of my policies and update me. The next day, she called with excitement, revealing that two of my child education policies had matured—meaning the funds were ready for withdrawal.

Initially sceptical, I asked her to send proof via WhatsApp. To my surprise, the accrued amount was substantial, more than enough to fund my child’s Senior High School and university education without dipping into my savings. These policies had been active for about seven to 10 years, with premiums deducted automatically from my bank account. The best part? The payout was tax-free. I will soon be visiting the Insurer to collect my funds and reinvest in new policies for my other children.

The second experience occurred at a fast-food joint. While waiting for my order, I noticed two young ladies lingering in the parking lot. I assumed they were with their parents. However, when I stepped into my vehicle, they approached my window. Expecting a common fundraising request,

I was shocked to learn they were university students struggling to pay their fees before the end-of-semester exams. One showed me her student ID and university portal records as proof. My heart sank as I imagined my own child in such a predicament.

I wasn’t sure if it was a scam, I offered what I could. As I drove away, I reflected on how financial struggles force many students to divert time meant for studying into fundraising efforts. With the rising cost of education, parents must plan ahead to avoid such distressing situations for their children.

The rising cost of higher education in Ghana

In Ghana, providing quality education for children is a top priority for most parents. However, the rising cost of tertiary education often leads to financial strain. Many parents resort to emergency loans, selling assets, or depleting their retirement savings to pay tuition. Meanwhile, some students are forced into unfavourable situations just to survive on campus.

According to financial analysts, the cost of university education in Ghana has been increasing by an average of 10-15percent annually. Without a structured financial plan, many families struggle to afford tertiary education when the time comes.

This is where Life Insurance Education Policies come in—a structured and reliable solution to funding a child’s education without financial distress.

What is a life insurance education policy?

A Life Insurance Education Policy is a specialized savings and protection plan offered by insurance companies to help parents accumulate funds over time for their children’s education.

These policies provide disciplined savings and financial security in case of unforeseen circumstances such as the death or disability of a parent. Premiums can start as low as GH¢50 per month—an amount small enough to fit into most budgets. Payments are automated through standing orders, making it easy for parents to stay on track without the stress of manual contributions.

Key benefits of life insurance education policies for Ghanaian parents

1. Guaranteed savings & maturity benefits: Unlike informal savings, these policies ensure structured contributions with guaranteed payouts when the child reaches university age.
2. Financial security in case of death or disability: If a policyholder passes away or becomes permanently disabled, future premiums are waived, but the child still receives the full educational benefits.
3. Disciplined & protected savings: Unlike regular savings accounts, which can be depleted for other expenses, an education policy locks in contributions to guarantee that funds are available when needed.
4. Tax benefits: Premiums paid on education policies may qualify for tax relief, offering additional financial advantages to policyholders.
5. Loan access: Some policies allow parents to borrow against the policy’s cash value in times of financial emergency without disrupting their savings plan.

Choosing the right education policy

While life insurance education policies are an excellent financial planning tool, parents must evaluate their options carefully. Here are key factors to consider:

• Start early: The earlier you begin, the lower the financial burden, and the greater the benefits due to compound interest.
• Compare policies: Different insurers offer varying terms and benefits. Research and compare multiple policies before making a choice.
• Assess payout flexibility: Some policies provide lump sum payouts, while others offer periodic payments throughout the child’s education.
• Consider inflation protection: Choose policies that adjust for inflation to ensure your savings keep pace with rising education costs.

For the purpose of this article let’s look at a simple analysis

The table showing the projected maturity value of a Life Insurance Education Policy with a monthly premium of GH¢100, increasing by 25percent annually, over a 5-year period, assuming a 20percent annual interest rate:

Year	Total Premium Paid (GH¢)	Total Interest Earned (GH¢)	Projected Maturity Value (GH¢)
1	1,200	240	1,440
2	2,700	828	3,528
3	4,575	1,909	6,484
4	6,919	3,674	10,593
5	9,848	6,379	16,227

1. Total Contribution: Over 5 years, the parent contributes GH¢9,848.
2. Interest Growth: With a 20percent annual return, the total interest earned is GH¢6,379.
3. Final Maturity Value: The projected amount available for education expenses at the end of 5 years is GH¢16,227.
4. Premium Growth Strategy: Starting with a smaller premium and increasing annually makes it easier to contribute while maximizing savings

Note that the Insurance companies take into consideration various factors and hence the table above is simplified.

Take action today!

For Ghanaian parents seeking to secure their children’s education without financial stress, Life Insurance Education Policies offer a practical and reliable solution. By starting early and choosing the right policy, families can safeguard their children’s university education and avoid last-minute financial struggles.

Education costs will continue to rise, making proactive financial planning essential. The best time to start is now. Invest in an education policy today, and enjoy peace of mind knowing your child’s future is financially secure.

>>>the writer is the CEO/CO-Founder of Figtech Limited, an Insurtech that has developed MyFIG, an app to help users compare insurance products from different insurers in Ghana. He is also the General Manager of Xpress Gas, an indigenous licensed LPG Marketing Company in Ghana. Prior to starting Figtech, he had worked as an Investment Banker for about two decades with different VC and PE Funds. He also worked on the World Bank Renewable Project across 19 countries. He is passionate about Personal Finance and Corporate Governance. He is a Certified Digital Finance Expert from the Frankfurt School of Finance and Management. He can be reached via [email protected] 

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