Help: CAP Educational Plan

[mazdamazda]

Hindi sustainable ang business na pre-need educational plan...

There's a lot of misconception about your post (and shows that you're not familiar with the preneed or insurance business). Unless of course you have a BS Statistics Major in Actuarial Science degree and can prove on paper that it is not a sustainable business overall.

First of all, the only non sustainable product line of preneed companies is the open ended educational plans, which CAP sold by the truckloads. While other preneed companies (like Philam, etc.) have halted selling it before (since the deregulation of the tuition fees for tertiary education) they were still marketing it out. This was determined via actuarial & financial computations - that is why currently all preneed companies are only offering a fixed-value educational plan.

By the way, an open ended educational plans is where you pay a fixed amount of money and then the preneed company pays for the full (or partial depending on the plan type) amount of the tuition fee regardless of the amount. While in a fixed-value educational plan, you pay for a fixed amount and you'll received a fixed amount on a predetermined time (regardless if your son/daughter will go to college).

Though even with the deregulation of tuition fees, CAP might have survived it (given their assets at least on paper). The problem was that they diverted their trust fund (which should be held under a trustee bank) to buy up a significant portion of Fil-Estate (which was way overpriced). Preneed companies are mandated to deposit around 60% of their premium collection as a trust fund (to prevent these kind of things), this is what CAP violated.

As I know it, CAP has offered to pay a fixed amount (depending on what the amount that you have paid for) instead of the full tuition fee amount. Will research about this.