Global Education Protector - Discovery · International education R 10 000 –R 60 000 p.a. R 40...

Global Education ProtectorFrom Discovery Life

2

Agenda

Key trendsin education

Education inthe context of shared value

Education planning

considerations

3

Agenda



Education planning

considerations

4

Total cost ofprivate education

could exceed

for the average family

*https://www.cia.gov/library/publications/the-world-factbook/fields/2127.html

5

Key trends in education

01 Starting school earlier

Education inflation outstrips salary inflation03

02 Increasing cost of supplementary expenses

Insufficient savings for education04

Parents having children at older ages05

6







7

R -1,003,165 R -1,200,000

R -1,000,000

R -800,000

R -600,000

R -400,000

R -200,000

R -

R 200,000

R 400,000

R 600,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Savings deficit/surplus at different ages

Required to fund from primary level Required to fully fund education

Starting school earlier

R200 000+ spent on school fees prior to primary school

Funding shortfall at older ages

Phase of school Number of yearsEstimated cost per

annum

Crèche 3 R30 000

Pre-primary 2 R60 000

Primary 7 R90 000

High 5 R100 000

Tertiary 4 R45 000

Children start primary school on average than a decade ago* putting further pressure

R5 722 must be saved monthly to fund education for

one child from primary level

Assumptions: R40 000 net of tax household income. 1 child. 10% savings growth rate and investment return. Average private school fees plus allowance for supplementary expenses. *https://data.worldbank.org/indicator/SE.PRM.AGES

Additional cost of education from crèche means

R6 880 is required to fully fund education

Shortfall

8







9

Increased cost of supplementary expenses

Typical ancillary education costs It all adds up…

Additional expenses could the total cost of

education by

10







11

Education inflation is outpacing salary growth Proportion of salary towards education

Education inflation outstrips salary inflation

18%

72%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Compounded by school fees growing by on average 60% between each phase of education

Continuing this trend, the proportion of income spent on education will increase by 4 times in 18 years

Assumptions: R40 000 net salary increasing at CPI, cost of education increasing at 10%, 2.29 children.

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13

Proportion of people whose spend exceeded their income at least once in the last year

Proportion of people saving for education or that have an education policy in place

25%

40%

46%

58%

78%

0% 50% 100%

R40,000+

R20,000-R39,999

R14,000-R19,999

R6,000-R13,999

<R6,000

44%

40%

40%

46%

44%

36% 38% 40% 42% 44% 46% 48%

2013

2014

2015

2016

2017

Insufficient savings for education

South Africa’s household savings ratio was -0.3% in the first quarter of 2017

Less than half of parents are currently providing for their children’s future education

*Source: Industry savings and investment survey, July 2017

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15

Parents having children at older ages

Parents have to retire at older ages

OR

*Sources: Office for National Statistics UK and National Centre for Health Statistics US

The average age offirst time mothers has

to 26, over the last15 years alone.*

are now born to

than under the age of 25.*

A

Consume retirement savings topay for education

B

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Agenda


Education planning

considerations


17

Chances are higher than you think Deaths after birth are a reality

A life changing event could place significant strainon funding ability

Chances of a life changingevent happening to one of the

parents while the child is in school is around

On average

within the first month after birth each year on Discovery Health

18

Saving for tertiary education Protecting education through a life plan

The education funding/protection conundrum

The present value of one child’s private education fees is

approximately

For a husband and wife to protect this using a traditional lump sum risk

policy would cost on average

Families need to save on average

From birth to fund one child’s

fees

Education needs to be both protected and saved for simultaneously

19

Agenda


Education planning

considerations


20

Discovery Life’s Shared Value Insurance model

MembersImproved health, better value through

improved price and benefits

SocietyHealthier society

Improved productivityReduced healthcare burden

InsurerLower claimsHigher marginsPositive selection and lower lapses

Behaviourchange

Dynamic pricing

Risk savings

Blue/Bronze Silver Gold/ Diamond

51% lower mortality & morbidity risk

Non-Vitality

63

81

87

South

Africa

Vitality Gold and

Diamond

Members

Increased longevity

R - R 1,000 R 2,000 R 3,000

2012

2013

2014

2015

2016

R2.9 Billion in PayBacks to date

21

Education creates Shared Value

Members

Society Insurer

*Sources: http://paa2013.princeton.edu/papers/132015 and Discovery internal data

On a macro level, improved education outcomes lead to a healthier and more productive society

Each additional year of education

an individual’s

by

Individuals with a tertiary educationshow a

Each additional year of education

a country’s

by

22

Core DollarPrivate

Comprehensive private school benefits

International education

R 10 000 – R 60 000 p.a. R 40 000 – R 125 000 p.a. $ 5 000– $ 25 000 p.a.

Public school benchmark

Cover from crèche to tertiary education

PRINCIPAL PRINCIPAL AND SPOUSE DEATH, SEVERE ILLNESS DISABILITYOR OR DEATH

Discovery Life’s Global Education Protector

Funds up to 100% of tertiary education by simply

leading a healthy lifestyle

For approximately R300 per month parents can fully protect their child’s education and get up

to 100% of their tertiary education funded

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Immediately fund 10% of your child’s tuition fees Fund up to 100% through leading ahealthy lifestyle

The University Funder benefit

Diamond 5%

Gold 4%

Silver 3%

Bronze 1,5%

Blue 0,5%

Automatic 10%

Private and Dollar

Child’s birth

18th

birthday

Automatic funding provided upfront for tertiary education and you can increase the amount we fund to up to 100% of your child’s tuition cost by leading a healthy lifestyle

100%

19%

64%

82%

37%

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Saving for tertiary education Protecting education through a life plan

Discovery Life’s Global Education Protector

Efficiency through Shared Value

Tailored Shared Value creates unparalleled efficiencies that can be channelled to helpfund tertiary education

Required to save around

just for tertiary education

Required to pay a premium of

for protection

and up to of

tertiary education

Global Education ProtectorFrom Discovery Life

Global Education Protector - Discovery · International education R 10 000 –R 60 000 p.a. R 40...

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Transcript of Global Education Protector - Discovery · International education R 10 000 –R 60 000 p.a. R 40...