Liberty Life Education Savings Plan: Securing Your Child’s Future

By Sizwe Dlamini

SPONSORED | Every parent desires the best for their children, and a solid education has long been a pathway for parents to invest in their child’s dreams and future. However, escalating education costs can create unexpected challenges.

To address concerns about an uncertain future Liberty Life Swaziland has developed a smart solution: the Education Savings Plan.

Retail Sales Manager at Liberty Life Mthokozisi Ntshingila elaborates on how this product enables families to save effectively for their children’s educational needs. He states that it allows policyholders to build a fund through regular premium payments that grow over time with investment returns, providing access to funds after a minimum investment period of just five years.

Key Features of the Education Savings Plan

A significant benefit is the Retrenchment Premium Waiver, which covers premium payments for up to six months if a policyholder is retrenched, ensuring savings continue to grow during challenging times

Flexibility and Accessibility

One of the Plan’s most appealing aspects is its flexibility. Mthokozisi notes that policyholders can easily adjust their premium payments—whether increasing, decreasing, stopping, or restarting contributions—without incurring penalties. This adaptability helps families navigate changing financial circumstances smoothly.

Beneficiary Protections

In the unfortunate event of a policyholder’s death, the nominated beneficiaries will receive the remaining investment value as a cash lump sum. This protection ensures that the funds set aside for education are passed on to the intended recipients.

Investment Strategy and Returns

The Plan focuses on moderate growth, aiming for better returns compared to traditional savings accounts. The Sales Manager emphasizes that while investment returns are not guaranteed and may fluctuate with the market, Liberty Life has simplified the investment process by selecting an appropriate portfolio, making it easier for policyholders to manage their savings.

Planning Tools and Resources

Liberty Life provides valuable planning tools to assist policyholders in preparing for future education costs. Mthokozisi underscores the importance of having a dedicated Liberty Agent who can help calculate necessary savings, making the process manageable and straightforward.

With the Education Savings Plan, Liberty Life is committed to helping families achieve their financial goals for education. This product blends flexibility, security, and expert investment management, enabling parents to confidently plan for their children’s academic futures.

FAQs

Q: What is the purpose of the Education Savings Plan product?
The Education Savings Plan helps individuals save funds for their financial goals. Policyholders can withdraw benefits from their Investment Account after five (5) years. The investment value is based on accumulated premiums, fewer charges, and any returns. It includes a Retrenchment Premium Waiver that pays premiums for up to six (6) months at no additional cost if the claim is accepted.

Q: How does the Education Savings Plan work?
Regular premiums are paid into the Plan, growing with investment returns over time, reduced by charges and taxes. Withdrawals (at no cost) can be made from the Plan to pay for education costs for example, as long as there are funds available in the Investment Account following the first five (5) years of the Plan, except for a full withdrawal being made.

Q: What if I plan on sending my child to school in less than five (5) years?
We recommend that Policyholders plan to invest their Premiums for at least five (5) years before needing to make withdrawals for their children’s education costs.

If a Policyholder’s child is going to need funds for education costs within the next five (5) years, alternative funding arrangements are suggested. For example, if your child is starting Primary school in less than five (5) years, then Liberty Life recommends planning to instead make use of the proceeds from the Plan to pay for their Secondary and Tertiary schooling.

Q: What happens if the policyholder dies?
When the Policyholder dies, the nominated Beneficiary(ies) will be entitled to the remaining investment value. This can be taken as a cash lump sum (less any tax). The Beneficiaries must be specified in writing at the start of the Plan and can be changed by the Policyholder, by written notification to Liberty Life, thereafter if needed. These cannot be changed after the death of the Policyholder.

Q: Are there any penalties for changing premiums or accessing funds?
There are no charges or penalties for Increasing or decreasing regular premiums, stopping or restarting regular premiums, and making a partial or full withdrawal.

Q: Can This Policy Be Ceded?
Policyholders can cede the benefits from this Policy to a third party if needed. An Outright cession of 100% of the investment value is allowed. No partial cessions are allowed.

Q: How does the Retrenchment Premium Waiver work?
The waiver is included in the Plan to cover premiums for up to six (6) months if the policyholder is retrenched. Monthly premiums will be paid regardless of whether the policyholder pays monthly or annually, calculated as the average monthly premiums paid over the last year. The maximum payment is E2,000 per month.

Q: What are the eligibility criteria for the Retrenchment Premium Waiver Benefit?
The policyholder is covered under the benefit. Automatically included for formally employed customers under 65 years. A twelve (12) month waiting period applies; no claims during this time. Policyholders must have been employed for at least twelve (12) months to submit a claim. A maximum of three (3) retrenchment claims are allowed during the Plan’s life. Only one claim per retrenchment event.

Q: What is the minimum Regular Premium under the Education Saver?
The minimum Regular Premium is E200 a month or E2,400 per year. If the policyholder cannot meet the minimum, they can stop premiums at no cost.

Q: What is the minimum investment value required in the Investment Account?
At the fifth (5th) anniversary of the plan, the minimum investment value must be at least E1,500. If not met, Liberty Life will pay the investment value less any fees and taxes, and the Plan will terminate.
The Education Savings Plan is a powerful tool for families looking to secure their children’s educational futures. “Don’t wait—start planning today!” he concluded.

Q: Are there any waiting periods applicable?
Yes, there is a twelve-month waiting period for the Retrenchment Premium Waiver benefit. No retrenchments during the first twelve months of the policy will result in the Retrenchment Premium Waiver benefit being payable.