“Invest in Books, Not Worries — because every parent and guardian deserves peace of mind.”

Raising children is both a joy and a responsibility. As a 34-year-old mother with a 6-year-old and a 2-year-old, you understand how quickly children grow and how their needs increase with time. One of the greatest responsibilities parents face is ensuring their children have access to quality education. Education is the bridge to future opportunities, yet the costs of schooling in Kenya and across the world continue to rise. This is why many financial advisors, like Tamara, recommend parents invest in an education policy. But is it truly necessary? Let us explore this deeply, with facts, statistics, and practical reasoning.

1. The Reality of Education Costs in Kenya

Education in Kenya is not free, even with government subsidies. Parents still carry significant costs for tuition, uniforms, books, transport, and extracurricular activities. Private schools, which many parents prefer for better quality, are even more expensive.

• Primary and Secondary Education: According to data from the Kenya Private Schools Association, school fees in private institutions range between KES 50,000 – 200,000 per year depending on location and reputation. Public boarding schools also cost between KES 40,000 – 80,000 per year.
• Higher Education: University fees have continued to rise. Currently, a student in a public university pays an average of KES 120,000 – 250,000 per year, while private universities can charge between KES 300,000 – 800,000 per year.
• Inflation Impact: Studies show that education costs in Kenya have been rising by 10-15% annually. This means that by the time your 2-year-old is ready for university in 16 years, fees may have doubled or tripled.

Without proper planning, parents often struggle with last-minute fundraising, loans, or even sacrificing quality education opportunities for their children.

2. What is an Education Policy?

An education policy is a long-term savings and investment plan provided by insurance companies. It allows parents to regularly contribute money (monthly, quarterly, or annually) towards their child’s education. The funds grow over time, with guaranteed maturity benefits and sometimes bonuses, ensuring you have a lump sum ready when school fees are needed. Key features include:

• Structured Saving: These policies require disciplined contributions over a set period, usually 10–20 years. This long-term approach matches the natural timeline of a child’s education journey—from early primary to university. While most policies are designed for the long-term, there are flexible ones that allow parents to start accessing partial benefits after about 4–6 years, especially at key transition stages like moving from primary to high school. However, short-term savings (less than 5 years) are not ideal for education policies since they may not generate sufficient returns or benefits.
• Life Insurance Cover: A unique feature of education policies is that they double as protection. If the parent (policyholder) passes away or becomes permanently disabled during the policy term, the insurance company takes over the responsibility of paying the remaining premiums. This ensures that the child’s education is funded as originally planned, giving the family peace of mind even in difficult circumstances.
• Guaranteed Benefits: At the end of the policy term, you receive a lump sum payout (the maturity benefit). This money is meant to cover significant education expenses such as university fees or boarding school fees. Some policies also release partial payouts at agreed intervals (e.g., after every 4 years) to cater for secondary school transitions.
• Optional Riders: Parents can enhance the education policy with additional covers, known as riders. Examples include critical illness cover (where the insurer pays premiums if you are diagnosed with a serious illness) and accidental death cover (which provides extra benefits to your child if the death was caused by an accident). These riders make the policy more comprehensive and protective.

Education policies are generally long-term in nature, but many have in-built milestones or partial payouts that can help parents start accessing funds after a few years. If you only need money for very short-term school fees (within 3–4 years), other products like savings accounts, SACCO deposits, or money market funds might be better suited. Education policies work best for medium to long-term goals like secondary school and university education.

3. Why Do You Need an Education Policy?

(a) Protection Against Rising School Fees 

As highlighted, education costs are rising faster than salaries for many Kenyan families. An education policy cushions you from the future burden by preparing funds today.

(b) Financial Discipline

Running a mitumba business or working as a canvas artisan comes with unpredictable income flows. An education policy forces consistent savings because the commitment to pay premiums keeps you on track. Many parents who try saving informally end up spending their savings during emergencies.

(c) Peace of Mind

The biggest fear for parents is: “What happens to my children if something happens to me?” With an education policy, if the policyholder dies or is permanently disabled, the insurer pays the premiums on their behalf. This guarantees that children’s education is secured no matter what happens.

(d) Better than Informal Savings

While some parents save in SACCOs, chamas, or bank accounts, these options lack the protection feature. If you pass on, those savings may not be sufficient or may be mismanaged. An education policy ensures funds are released only for the intended purpose.

(e) Long-term Wealth Planning

Children’s education is not a short-term goal. For your 6-year-old, you have about 12 years until they complete secondary school, and 16 years until university graduation. An education policy aligns perfectly with such timelines.

4. Addressing Common Concerns About Education Policies

Concern 1: “These policies are too long-term.”

Yes, education policies are long-term because education itself is a long-term goal. Children do not finish school in 2–3 years. By committing for 10–20 years, you match the savings with your child’s educational journey. That said, there are now short to medium-term education policies in the Kenyan market. For example, Soma Sure and Soma Smart offer flexible terms of about 5–12 years, allowing parents to start accessing benefits earlier. These types of policies are particularly useful when your child is already older (say in upper primary) and you want a structured plan for their high school or university fees within a shorter horizon.

Concern 2: “I can do something else with the money.”

This is true—there are alternative investments. However, many require knowledge, time, and risk tolerance. Businesses can fail, property prices can stagnate, and inflation can erode savings. An education policy is structured, low-risk, and guaranteed, making it a safer option for something as critical as education. Shorter-term policies like Soma Smart provide additional flexibility while maintaining the insurance protection feature, meaning you don’t have to choose between flexibility and security.

Concern 3: “Returns are too low compared to other investments.”

While returns on education policies may not match high-risk ventures, they are stable and predictable. Most policies yield 4-6% annually, plus bonuses, in addition to the insurance cover. When combined with the life cover, the value outweighs other ordinary savings. Short-term options such as Soma Sure may provide lower payouts compared to long-term policies, but they are structured to meet nearer-term educational needs, such as high school tuition, while still offering protective benefits.

5. Real-Life Example

Let’s consider your 2-year-old’s university education in 16 years:

• Projected annual cost (with inflation): KES 600,000.
• Four-year course total: KES 2.4 million.

If you start an education policy today with KES 5,000 monthly, by 2041 you could accumulate around KES 1.5 – 2 million, depending on the Product package. This, combined with other savings or income, significantly reduces your financial burden. Without a plan, parents often turn to HELB loans, expensive bank loans, or harambees. Education policies prevent this last-minute crisis.

6. What Do Statistics Say

• According to the Kenya National Bureau of Statistics (KNBS), households spend 35% of their income on education, making it the second-highest expense after food.
• A 2023 survey by the Association of Kenya Insurers (AKI) revealed that only 12% of Kenyan parents have education policies, leaving the majority unprepared for rising costs.
• A World Bank report noted that lack of structured educational savings is one of the reasons many bright students drop out due to financial hardship.

7. Final Thoughts: Do You Really Need an Education Policy?

The answer is a resounding YES—if you want to secure your children’s future, avoid financial stress, and enjoy peace of mind. An education policy is not just about saving money; it is about protecting your children’s dreams.

Think about this: education is one of the most expensive and non-negotiable responsibilities for parents. Unlike luxuries, it cannot be postponed or canceled. Whether your child is six years old today or just two, the cost of education is steadily rising in Kenya, and inflation will make it even higher tomorrow.

As a mitumba businesswoman and the spouse of a canvas artisan, your income may vary from month to month. Sometimes business is good, sometimes slow. An education policy acts as a safety net—ensuring your children’s education is not tied to the uncertainties of business or casual jobs.

Now, let’s address flexibility:

• If you prefer the traditional long-term policies (10–20 years), they align perfectly with your child’s journey from lower primary all the way to university.

• If you want more short-term flexibility, policies like Soma Sure, Msingi Poa and Boresha Elimu allow you to save for shorter periods, say 4–8 years, and still begin withdrawing for school fees when you need them. These plans recognize that not all parents want to lock money for 20 years, and they provide practical options for families with varying goals.

So, the real question is not whether education policies are too long-term, but whether you can afford to risk your child’s future by not having a structured plan at all.

 Every Parent Should Ask

• What happens if I lose my income today—will my child’s school fees still be paid?

• Am I confident that my current savings and business profits can withstand inflation and rising school fees over the next 10–15 years?

• If I were to pass away unexpectedly, would my children still continue with their education uninterrupted?

• Am I disciplined enough to save consistently on my own, or do I need the structure of an education policy?

“Smart Parents and Guardians Plan, Wise Children Shine.”

If you are a parent or guardian in Kenya, start planning today. Education policies work best when started early, giving your money more time to grow. Speak to me at Tamara’s Financial Planning & Consultancy, your trusted financial advisor, to find the right plan for your budget and your children’s needs. Remember: the best gift you can give your children is not just love, but also the security of education.