These things being touted by insurance agents. I have listened to one too many and would like to pose for advice on this crazy-wise platform. Is it a worthy investment for a child of three years? Is there anyone whose college fees been paid from these matured policy?

If so, what are companies to be trusted and what other things should one watch out for.

I have always adviced my friends against non-compulsory insurance policies but maybe things have chnaged.

@Spend.thrift

I will tell you something and hope it will make sense. Some 5 years ago, a saleslady approached me with a similar product from a reputable insurance company. My colleagues took for their children. She told me, after I think 13yrs(that's when he'd have been expected to be in form 1 or so), i will have contributed around 500k in total. when it matures, i would get around 1m or 1.5m for the child's education. She was also willing to take a lump sum in advance (which i actually had). I, having worked for an actuarial firm at some point - so i know how insurance companies work, and with some finance background, I knew I surely could do better on my own than the offer. If its gonna take you a decade to double your money, then something is really wrong.... So i took the amount and bought a quarter acre at Syokimau and was left with a handsome change... 5 years on, you know what the prices are with no more investments except just a basic fence, less hassles, and am still waiting for the 13th year..... My colleagues however are still faithfully paying their instalments. Even if i had taken a soft loan, i'd have cleared by now and the investment would still be worth it! In 8 years time, given the rate at which the school fees is going up, how much do you think your kid will need and how much would be left for college? Add inflation! Add the skyrocketing of other investments that you would think you'd acquire once you get the lump sum.....

that said, i know insurance products are very important for rainy days.... but for education/life/investment insurance products etc if you have money, i think you can do better than what they can offer - even with just equities. i know for sure if i had insured my life for 10 million, i'd still be paying a hefty monthly installments, yet, with investments, you can easily surpass that in a few years and still have room for growth...... But don't be cheated... i do have a life insurance... but through employer.

However, medical covers, travel insurance and car/accident insurance products are a must...

But that's me.

There are definately other investments that will give you a higher return in the long run than an insurance life/education policy. However those investments do not provide you with the life cover incase you die before maturity.

The life insurance premium is generally divided into 3 parts. One part is the cost of providing life cover, the other is the administrative costs(including commission) and the last is investment funds. Thus you could say pay 10,000 a month, but the funds credited/or set aside for investment are say 7,000. so not the whole amount goes to investment. Hence the lower returns.

The question is whether you feel the need to have 'life insurance'. If no then other investments are better. if yes then there are two options. You can purchase the life policy/education and wait for the maturities or you can separately buy life cover (Only) and invest the balance of funds yourself.

Personally I would go for the life cover up to a point. Thereafter, get life cover only and invest the rest myself.

Agents are notorious for leaving insurance companies. They reach a saturation point and move on to another insurance company with different product, different commission structures.

The are a number of good insurance companies. But you must from the start work closely with the insurance company (the agent will, for the commission, mis-sell ie sell you the wrong thing as long as it gets him the commission). Most of their systems can produce statements at anytime. Just do your homework as you would any investment. It is a long-term investment.

Hope the long story above helps.

Read also:

http://www.wazua.co.ke/f....aspx?g=posts&t=7218

CFC Life is quite hogwash.

Or at least the CFC Life agent I dealt with. I took out an educator policy through this agent. He was a friend and neighbour. One day, I sat down with an in-law, who also worked for CFC Life as an agent and she took me through that policy with a fine tooth comb. It was an open discussion and she told me things. Apparently, I had been duped and was not going to get value for my money.

When I tried contacting my agent to shed light on a few things he started becoming shifty. My take is that so long as he made his commissions, all was fair.

I canceled the policy after contributing for about 7 months. I would like my money back. Damn CFC Life!

Been with CFC life for 7 years , no problem so far(may be because mine in mostly a life cover with a small income building option so I dont mind much about any returns from the policy as long as my life is covered if I kick the bucket immaturely)

But my advise is that If you have to take life insurance take pure life.

Insurance is not an investment.


I had another policy with another company . This was sold by a Wazuan to me in 2008 after a hyped marketing gimmicks in the former Stockskenya.But I feel very much defrauded.The guy also left the company

He had told us that the policy will have a 12.5% return per year.

After 3 years, one can withdraw and get 100% of the fund.

I joined.

Come end of year one, I get a statement showing that only 55% of my premium was going to investment.(this had not been disclosed to me)
This was a shock of lifetime.
Come year 2 only 90% of the policy was being credited to the investment.
The 'investment' had barely grown.

Year 3 the same.

I decided to cancel the policy after end of year 3, Last year , at a 30% loss just to cut loses.

After that the premiums I had been paying ,I redirected them to my CDS account. My return on shares is now 15%.

I get valuable information on the shares to invest from Wazua.


Investment insurance is just a legitimate fraud

Got a WHOLE LIFE insurance policy for my better half who is in business two years ago. For a 10M package the premiums are less than 50k a year with Old Mutual. A similar package with the investment component (such as the education plan) would be more like 50k a month. The return on this endowment things is typically less that 3% annualized.

By the way the agents eat possibly 25% of each premium you pay to the insurance company as commissions for this education things. That's why they follow you like a bloodhound.

The only time people complain about the returns from insurance policies is when they think of them as investments. For that reason, allow me to re-post what I wrote in June last year:


Once you have a clear understanding of insurance, it becomes easy to decide whether or not to take one.

I have an education cover for my kids, I took it to specifically take care of their education in case of my death.

But I also have a life cover... actually 2 covers - one attached to my medical cover and the other attached to the education policy.

So If I drop dead today, my family will get paid the sums insured under the life covers instantly; then upon maturity of the education cover, another amount will be paid to them for the education of the kids...timed to coincide with form 1.

In the meantime, I am busy investing....

i can finally say i understand insurance products, thanks to wazua

I consider myself very lucky to have read these threads at this time heheheh was just about to commit to an education policy...