Save for a child's education

Hi Mr Tan,
Reading your blog has been a daily thing to do for me. Thank you for all the advice, interesting info. on places you visit, hot topics and jokes.

My only insurance for my only son (9 years old) is a Life insurance for 150k. As I do not have an education plan for him, I am considering to buy the NTUC PayMyUni insurance for him. The quote is 50k for 15 years, premium at $348 monthly plus 2 riders on hospital benefit and waiver of premium based on my life.

I would like to have your advice if this is a good savings for my son's education cos the premium is quite high monthly.

Maturity return
Projected at 3.75%: $71,440
Projected at 5.25%: $81,692

REPLY
The return from the above education policy is fair. It is not great, but is not bad. If you buy this policy, you should commit for the full term of 15 years.

If you invest $348 monthly to earn 5% per annum (not guaranteed) in a low cost investment fund, you will get a total of $92,300.

Read this FAQ:
http://www.tankinlian.com/faq/education.html