Hi all,

Seeking some views here - I'm looking for an education insurance policy for a child, the main purpose is actually for income tax relief claim of RM3k per year. So with the budget of RM250 per month, what kind of education insurance policy can I consider?

Prudential My Child? Which one will provide guaranteed returns? Endowment?

Appreciate any views on this. Thanks!!

Education insurance policy only ? How about life and medical
Generally, the premium paid towards the endowment will not be eligible for tax deduction. You may want to clarify further on that before you finalise your plan.

Hi, thanks for the response. As I've mentioned, the purpose is to maximize income tax deduction. Therefore, it must be education (medical can't be claimed right, and life already maxed out). Also have other plans for life/medical coverage so that is absolutely not needed. Objective is to maximize income tax deduction, provide absolutely minimum protection (I don't want any $$ in the event my child TPD/death), and maximize the potential returns when the policy matures (when child turns 20?)

So if for e.g. Prudential MyChild, there are two components right?

1. basic protection
2. prusaver

So assuming a budget of RM3k pa or RM250 per month, can it be like

1. RM50 per month for basic protection
2. RM200 per month for prusaver

Then are you saying income tax relief can be claimed on #2 only? and not #1? So total amount eligible for tax relief is RM200 x 12 = RM2400?

Thanks!!

You can have a look at SSPN by PTPTN. http://www.ptptn.gov.my/web/guest/simpanan

Take relief up to RM 3000.

Medical card premium 100%
CI can be included to this portion but 60% of the premium is allowed only.

Basic Protection allocation 40%
Prusaver allocation 95%

Total amount eligible for tax relief shoud be RM 50*12=RM 600

need conformation on it.. as there are many prusaver pruedusaver etc etc

This post has been edited by MaxWealth: Mar 10 2011, 08:48 PM

1. Life insurance is combined with EPF.
2. Education and medical insurance are combined together totaling max RM3000 for income tax relief, I suggest you also look into medical insurance for yourself if you don't have one.
3. To ensure maximum guaranteed returns for your child, deposit RM250 every month into Savings Account and when it reaches RM1K, transfer to FD. Look into HLB Junior FD promotion from time to time. The child savings account interest rate reasonable. Just use excel and you can see how much with just RM250 a month you'll get in 20 years time.

This post has been edited by Gen-X: Mar 10 2011, 08:40 PM

thanks. i already have this.

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Added on March 10, 2011, 9:09 pmso pru edu saver is not eligible for tax relief??

how come prudential pru my child pdf doc (downloaded from prudential website) says this....

10.Is PRUmy child eligible for tax relief?

During childhood
"As a parent, you should be entitled to education tax
relief on premiums paid for PRUedusaver, PRUsaver
kid or Parent Payor. Furthermore, premiums paid
for PRUfamily income, PRUfamily double income and
PRUessential child may also qualify for tax relief."

The Pru my child is a combination of protection and education investment, right? Based on what you say, I can only claim tax relief for the protection component of this education insurance policy??


This post has been edited by poolcarpet: Mar 10 2011, 09:09 PM

Thanks for the suggestion. I'm aware of the 3 points below, again my focus is on gaining the maximum tax relief. Hence i'm looking SPECIFICALLY at education insurance. Don't need life, don't need medical. Already have coverage for those.

The only reason why i'm emphasizing on guaranteed returns is I know most education insurance will have that chart showing you total returns after X years, and those are based on 9% or some high return rate. I'd rather lose out a bit on the potential high return rate, and get a lower guaranteed rate, maybe 5%? or even 3-5%. Remember I've already gained from the tax relief... so this is on top of the tax relief gains.

I have other investments and plans for education funds, this education insurance is just a part of it, and again, I just want to maximize the tax relief, hence looking for education insurance, which can be claimed under the tax relief scheme.

Does anyone know of such policies?



This post has been edited by poolcarpet: Mar 10 2011, 09:18 PM

Thats why i say need comfirmation from the PRU HQ.

Due to the allocation rate is 95% and the flexibility of withdrawing and redepositing it. Need to check it out. If yes, then it will be very good.

Wah 9% is damn high and as for guaranteed return of 5% for education policy, please PM me and let me know when you find one. Thank you.

you really claim to the max...

Prusaver attached to a link plan cannot be used for tax relief
Maybe you could get a 15/20 years endowment plan for your kid for that purpose . . . Hope this will help you

for my 2 children, I took Pru BSN

go see any agent, in the proposal they give you - there will be two colums. one is conservative prob 2-3% but another will be 'high' about 6-9%. most will emphasize on the 6-9%, but i prefer to look at worst case 2-3%...

i'm not an agent though, so i may be wrong.

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Added on March 11, 2011, 10:13 amsee this is where the confusion is. some tell me can, some say cannot.

This post has been edited by poolcarpet: Mar 11 2011, 10:13 AM

RM 250x12= RM 3,000.00 all get LHDN tax relief? NO!

Only the portion that pays for the protection (pure insurance part) is eligible for tax relief. Usually around RM 400 - 500.

The other portion that is used to but into unit trust fund are considered as investment and hence not eligible for tax relief.

But, fret not, just buy a medical card and critical illness and voila... tax relief is yours again. T&C applies. A pure critical illness policy alone would already exceed the RM 3,000.00.

Truth be told, the RM 3,000.00 is too little because a critical illness policy nowadays will be >RM 3K even for a sub-decent coverage. This RM 3K, hasn't taken into effect the rising medical inflation.

This leaves very little room for any child edu tax relief.

My opinion, it should be RM 3K for child education RM 6K for medical.

Xuzen

This post has been edited by xuzen: Mar 11 2011, 01:53 PM

Ah, this is what I was told in the past but some tell me 250x12 can be claimed as long as the policy has the word education in it.

Buying the medical card/CI is not what I want as I already have company coverage. No point spending 3k to 'save' up to 26% right?

Anyone know if this is the same for Great Eduplanner (which seems to be an endowment type of policy??)

Yes, you cannot claim the investment portion.

Your annual tax statement on your insurance will split out the portion.

ok, so it's quite clear any ILP type of education insurance won't be able to have max claim on the 3k.... how about endowment type of insurance? any ideas??

For child Education endowment Policy, it's entitle for the tax relief. below are some term and condition to meet before we can include for the tax relief.

- the education plan must be taken up by the parent/legal guardian and it must mature when the child reaches the age of between 13 to 25.
- make sure the policy has a the word “education” printed in the policy title
- It is also important that you opt for a payer benefit rider throughout the life of the policy.
- if wife elects for separate assessment, she can also claim the same amount of relief on her life, education and medical insurance premiums but not on the same child.

yeah, so what are all the different child education endowment policy available out there?

thanks!!