As a parent, you’re always concerned about your kid’s future. You want to give the best to them and help them prepare for the future through good education. But quality education does not come cheap. Similarly, you worry about their welfare when you die too soon. Who is going to look after them when you’re gone? AXA Philippines may just have an insurance product for you.
Academix is a regular-pay variable universal life insurance policy (VUL) that gives life insurance and investment designed to meet your child’s future college educational needs. The insured life is that of the parent’s, and the money for your kid is released annually once they reach the pay-out age. It is also different from that of a plain-vanilla term insurance like AXA’s FlexiProtect policy, as it may cover up until age 100.
See below a quick rundown of the important details of the plan.
|Type||Variable universal life insurance/VUL|
|Premium variant||Regular pay|
|Educational needs||Any amount of your choice|
|Premium holiday||5 years|
|Premium payment||Annually, semi-annually, quarterly, or monthly|
|Riders||Brighter Term Plus, Waiver of Premium (Brighter Term Plus), Secure, and Protector|
|Managed funds||AXA’s investment funds|
A version of Axelerator
The Academix policy is actually a version of Axelerator, and so it shares some of its many features. For example, the plan gives you the opportunity to invest in many of AXA Philippines’ professionally managed investment funds. By investing, your savings have the potential to earn through the returns of the fund and in turn, you can prepare for the needs of your kid’s education.
Furthermore, you also have guaranteed death benefit equivalent to 5x the annual premium in case of unexpected death.
You decide the amount of pay-out for your child’s tuition and other schooling needs. The pay-out is the yearly value of cash that you use when your kid/s get to college and it is going to be released for four years. You will be asked to declare the age of the child and the year that the pay-out would start. The Academix would make a forecast in meeting the annual educational needs assuming that the investment would grow 4% every year. Thus, the return is non-guaranteed.
Another thing to remember is that your premium increases the higher the pay-out you set. Similarly, the premium goes down the longer time you have in building up the fund. So if your kid is very young and the start of the pay-out is when they’re 18 years old, the premium you’re going to pay would be lesser than if you’d start when they’re older.
The actual pay-out depends on returns. The returns from your managed fund would vary. They are therefore not guaranteed.
You may choose to withdraw from your account value. Terms apply such as surrender charges and corresponding deduction on guaranteed death benefit. Also, the death benefit gets deducted every time a withdrawal is made.
Just like the Axelerator, you may request for premium holiday when you have paid at least five years. This can be requested when the account value has grown to a point where it can pay off the cost of insurance, fees, and charges. You may also choose to continue paying beyond five years.
AXA Philippines offers flexible premium payment. This policy can be paid every year, every six months, every three months or monthly. To better assist you, you can also choose to have automatic payments through your bank for your convenience. When you pick monthly payments, auto-debit arrangement is required.
The insurance riders that you may attach to the plan are Secure, Protector, and Waiver of Premium. (Brighter Plus would be discussed separately after this section). The Secure rider gives separate benefits when you meet an accidental death or suffer dismemberment or major burns. The Protector rider on the other hand is a term insurance that increases the sum insured at an affordable price.
If the person insured dies suddenly, the Brighter Plus rider gives pay-out every year until the policy’s last scheduled withdrawal for educational need. The amount is equal to the educational need pay-out you declared before the start of the policy.
So for example, if the person insured dies when the child is 10 years old and if the yearly educational need is set at ₱50K and if the policy is set to start releasing that money when the child reaches 18 years old, the Brighter Plus gives ₱50K yearly since the death of the insured person prior to the child turning 21 years old.
The Brighter Plus rider is required when opening the plan. Another required rider is the waiver of premium. The waiver of Premium rider ensures that your policy continues even after the person insured has been declared disabled and unable to earn an income.
What are the advantages of Academix?
There are many benefits in purchasing Academix.
- It gives peace of mind for parents who wanted to prepare ahead for the educational needs of their child.
- When you’re unable to earn an income, your policy continues. During disability, the policy will continue to remain valid because of the waiver of premium.
- When person insured dies, a yearly pay-out is given. During untimely death, annual pay-out equal to yearly educational need is given from the time of death before the expiry date of the Brighter Plus rider.
- The policy allows you to attach add-ons or riders for better customization of your insurance.
- Premium holiday gives you the choice to suspend payment when the account value can sustain the monthly charges and fees.
- You may be able to withdraw the account value should the need arises.
What are the disadvantages of Academix?
Aside from the general disadvantages of variable universal life (VUL) as outlined, Academix has the following disadvantages.
- Premium may be higher than the Axelerator plan. This is due to the Brighter Plus and waiver of premium riders that are at the backbone of the policy.
- There is a chance that you may have to continue paying the policy beyond five years particularly when actual managed fund returns do not meet forecast.
- All withdrawals are deducted from the guaranteed death benefits.
Is Academix right for you?
The Academix policy is suitable for parents. It’s a way to prepare for the expenses in the future especially when the child goes to college or university as tuition and other fees keep increasing every year. By planning today, you’re in a better position to send your kids to good institutions and acquire quality education.