Life Insurance Company Freedom Finance Life has set a goal to make higher education more accessible for Kazakhstanis. The company launched several projects: a series of free workshops for parents, free summer school on financial literacy for children, and cumulative life insurance program Freedom Education, thanks to which money can be saved for education both in local and foreign universities.
One of the most common reasons why people in Kazakhstan cannot get higher education is financial difficulties. 9.5% of total number of students had to drop out because of that and only 54% of people aged 18–22 studied at universities in 2018.
About Higher Education
Every year, approximately 200 thousand Kazakhstani high school students ask themselves if they really need higher education. Is it possible to do without a diploma and go to work right after school, gain experience and find yourself in this life? The debate seems to never end.
On the one hand, history knows many examples when people dropped out of universities or didn’t go there at all and achieved success. A diploma is not a guarantor, and many companies realize that. For example, it is possible to get a job in Apple and Google without having a higher education. On the other hand, studying at the university is a very important stage, thanks to which we develop, sharpen useful skills and get the opportunity to take the first steps on career ladder.
In many countries, they understand that the more graduates there are, the more efficient the economy is, and therefore the higher the quality of life and level of salaries. Therefore they implement programs that should increase the percentage of graduates among the working population. Similar programs are in the USA, China, Europe, and Russia. The task is to increase this index to 50%. Two years ago in Kazakhstan, only 36% of the working population had diplomas.
But even if you invest money, time and efforts of thousands of specialists in such programs, all this will not work if higher education is simply not affordable for most citizens. Accessibility of higher education is one of the most important economic indicators. It is true for Kazakhstan as well. Therefore, we set a goal to make higher education in Kazakhstan more accessible. It is clear that we cannot affect the cost of education, but we can offer products that make it easier for Kazakhstanis to save money for education.
The more you have to save, the higher the risks.
The work of life insurance companies is to sell sophisticated products. We strive to create products that are easier and more comprehensible for customers. We have a strict requirement for that: the products must solve specific problems. Giving your children a good higher education is just such a task.
According to a study we conducted in March, the average cost of a baccalaureate year in Kazakhstan (a 2018–2019 academic year) is 396 thousand tenge. Four years will cost 1.5 million tenge. This is just an average indicator, and education can cost much more, up to several million tenge per year. And we are talking about Kazakhstani universities. As for foreign ones, the cost is even higher. In any case, this is a heavy load for a family budget.
In order for parents not to look for such money right away, the only right decision, in my opinion, is to start saving in advance. For example, if you save 50 thousand tenge every month, then four years later you will accumulate 2.4 million. This amount is enough to give a child a higher education at an average Kazakhstani university. If you start saving even earlier, for instance, seven years before the child’s admission to the university, it will be even easier to do. This is a simple but effective scheme.
However, there are nuances: the more you have to save, the higher the risks. We understand it well as insurers. An accident or event may occur any time that will entail unplanned expenses. In such situations, people are forced to spend everything they have even if it is money for child’s education. Therefore, in order not to risk the well-being of children, you need to create a financial cushion that may be of help should anything happen.
How can I save for education?
In order to protect our customers from such cases, we developed a solution, Freedom Education Endowment Program. It combines some functions of an educational deposit and life insurance.
The program works as follows: parents choose a suitable Kazakh or foreign university several years before the admission, enter into an agreement with our company and start saving. Tenge contributions can be paid in any convenient mode: on a monthly, quarterly or annually basis. The program’s peculiarity is that while parents are saving up, their lives are insured. If, during this period one of them gets injured, falls ill and loses the opportunity to earn or dies, our company will pay all the remaining contributions by itself. If nothing happens during this period, then the parents will accumulate the amount necessary to pay for tuition and receive investment income. The accumulated amount will go directly to the university, even if the cost of education during this time has become higher. If the child enters the university with fellowship, the parents will receive the full contract amount back.
The program guarantees that the child will receive higher education in any case
The program is most effective at long term, the more time before the child enters the university the easier it is for parents to save funds. Under the contract terms you can insure yourself against death and disability, critical illness, as well as injuries and related temporary disability and hospitalization.
Many parents care about the reliability of their savings. Freedom Finance Life is a professional participant in the insurance market, therefore, our activity and responsibility to clients is regulated by the National Bank. In addition, we are part of the Freedom Finance holding, which is a guarantee, since our reputation is not an empty word. Besides, we work with large foreign reinsurance companies, so our risks are always under reliable protection.
Why do we have to think about children’s higher education as early as possible?
Along with the fact that it is financially lucrative for parents to start saving up for their children as early as possible, there are many other details. For instance, you need to choose a profession that is in demand in the future, country and university. In addition, you need to prepare for admission. If you take these issues very seriously, it will take a lot of time. Therefore, it is better to think about this in advance.
To help parents at this stage, we launched a project: a series of master classes on why higher education is important, how to help your child decide on the profession of future, how and why higher education is getting more expensive, how to start saving for tuition and with what financial instruments it is best to do with. Participation in these events is free; we hold them every two months in Almaty, but plan to spread to other cities.
Surely, the main task of this project is to convey to Kazakhstani parents the idea that they should think about higher education of their children as early as possible. It gives them a great advantage and the most valuable resource that cannot be replenished later, time to prepare themselves and their children. In addition to this task, there is another side: we get the opportunity to communicate with target audience, tell it about our plans and most importantly, listen and find out its needs. This information is very valuable; thanks to it we can understand what else we can do.
In addition to the workshops, we have another important project, Freedom Finance Camp. It is a free financial literacy education camp for children ages 11 to 13. Its task is to help children understand who they want to become and what is necessary for that. We launched the project in July in Almaty and carried out five educational streams in a month and a half. In total, more than 100 children attended the training.
We decided that the camp should be held in a creative format and with interactive games to make it easier for children. The program consisted of five classes by two hours each. During the first four we told the participants what money was, how to handle, earn, spend it wisely and save. The children learned about the stock market, securities, insurance and banks.
The task in the fifth class was to present a project about who they dream to become and what they would do for that. The children drew the path they wanted to go: school, additional education, sports, university, first steps on the career ladder, and their dream in the finale. It was very nice to see how hot-eyed children talked about that they wanted to become famous athletes, big businessmen, IT specialists, astronauts or just billionaires on the posters.
We are very pleased with the summer camp results. It was our first project, and therefore very important. We shared and gained experience from Freedom Finance Camp participants. Now the larger goal for us is to make the camp go on every vacation and in different cities.
All our educational projects have been launched and are working thanks to specialists who also have children or are planning to become parents. We all dream of happy future for our children, and therefore think ahead what is necessary for that, such as saving money for university, helping child decide on the future profession, supporting him in everything and choosing the right university. Launching the products we use ourselves is one of our principles.