Hi you may wanna have a look at Allianz's PowerGrad policy.

1. Education Policy
2. 3k premium, mode of payment as u mentioned
3. Very low sum insured on child. From 10 onwards
4. Covers payor, both husband and wife and cash value upon maturity
5. 100% tax relief claimable - I come back to u on this, i don't know how the proportion is.

6. 5 to 25 yr coverage term depending at age of child.




If condition 5 is fully claimable, then this is the perfect plan to suit ur needs.

Check out brouchure at my personal site here. http://www.blueangel.info/p/powergrad

PM me for actual quote. Thanks

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Added on March 12, 2011, 12:45 pmIn my reply to ur statement up there, you may have a look on those what very high networth people are doing with insurance and insurance serves a very important role in their life. http://thestar.com.my/news/story.asp?file=...44276&sec=focus



This post has been edited by chew_ronnie: Mar 12 2011, 12:45 PM

Rich particularly those hundred millionaire, billionaire doesn't need any insurance product.
The word is "need", but it doesn't mean they cannot have it nor don't want to have it or not suit to them.

For them, insurance is just merely part of asset allocation, diversification, in the meantimes, still can get tax benefit, credit risk proof, tax exempted income/return etc.

Unlike middle class people, insurance is essential and serve as an important tool (aka the primary function of insurance) to protect them from loss of income which could affect their family.
Rich one doesn't need to worry this already aka they don't need the primary function of insurance, but more on secondary part function of insurance (as mentioned above).

Yes it's not a must and as u say these filthy rich people would not need the primary insurance coverage ie medical card or critical illness. It,s just part of their assets distribution as these monies are creditor proof in the form of annuities for different usage.

In fact by doing this method, these people can preserve their wealth. I've done a few such policies to my clients saying exactly what was written in the article, of coz the market are for those multi millionaires with one or two children.

Actually the rich buys more insurance to insure they properties/assets but they don't need Life Insurance and Medical Insurance some even "pantang" to buy Life Insurance. For example, some rich men even buy insurance on their Rolex watches or entire watch collection and some even insure their chandeliers in their home.

Yah, for the middle class, we need medical insurance especially if we want go to Private Hospitals. Did an article on that, click hereto my blog to read me blah blah blah if you got time to waste.

Ok... didn't expect a simple statement on rich not needing insurance to generate so many response but even if I'm that rich, I won't spend money on rolex/chandeliers, so no need insurance for those in the future

Guidelines to enjoy maximum tax relief on childrens's education policies.

How to enjoy maximum tax relief on children's education policies?

1. If the life assured of the life policy is the parent, to qualify for tax relief, the beneficiary must be the child.

2. If the life assured is the child, the following condition must be met:
a. A payor benefit must be attached into the policy and in the event that the payor passes away, are totally and permanently disabled or diagnosed with critical illnesses, all future premiums for the said policy will be waived. This payor benefit duration must be the same as the policy maturity duration.

3. A copy of the insurance policy schedule must be submitted when a tax deduction claim is made for the first year. Subsequently only the receipt of payment is required for submission.

4. For both Takaful and conventional education policies, the maturity benefits/cash values must be paid to the child when they attain the age of between 13 to 25 years of age.

This post has been edited by chew_ronnie: Mar 14 2011, 03:22 PM

Hi,

Good stuff... I think someone posted this before then deleted it for some reason.

So which policy is available which meets all these requirement?

1. If the life assured of the life policy is the parent, to qualify for tax relief, the beneficiary must be the child.
4. For both Takaful and conventional education policies, the maturity benefits/cash values must be paid to the child when they attain the age of between 13 to 25 years of age.

Which education policy will insure life of parent, and mature when child is 16 years old?


Thanks!



This post has been edited by poolcarpet: Mar 15 2011, 09:07 AM

I'm still asking Allianz on the PowerGrad education policy. All conditions can be met except that the tax decudtible option which i'm awaiting answers from them. Once i get it, i'll inform u.

Thanks

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Added on March 15, 2011, 12:25 pmAllianz has got back to me on the eligibility of the tax exemption on the insurance education policies. Currently there are 2 plans under the Allianz stable.

The 1st one is the PowerGrad policy:
Low life coverage on child.
Comes with a payor waiver.
Terms from 5 to 25 years.
Maturity cash values.

The 2nd one is the Income Provider Plan (Allianz will withdraw this plan on 31st of Mar 2011)
Low life coverage on child.
Option to include payor - but must include in order to qualify for tax exempt.
Terms pay 10 yrs, maturity at 20 yrs.
Maturity cash values.

Hope this will help u in ur selection.

This post has been edited by chew_ronnie: Mar 15 2011, 12:25 PM

If you guys can get a life insured = payor, and eligible for tax exemption, kindly inform me ya..thanks

Just to reiterate on this, which i think should not be the 1st priority in choosing child education insurance, simply because if the insured is the parent and the nominee is the child, what happens when the parent dies before the child reaches age 16 or 18? All the insurance proceeds CANNOT be claimed by the underage child. So what is the point of choosing these kind of policies.

In my humble opinion, all endownment plans can be used as an education policy by the guidelines stipulated above with the parent being the sum assured.

I may be wrong in this, but this is the issue i thought off by doing so. Thanks

This post has been edited by chew_ronnie: Mar 15 2011, 03:13 PM

can this little problem be solved by naming the child as the beneficiary, but also have a nominee (e.g. relatives)?

i totally do not understand the point of insuring the life of the child in any insurance. the child does not generate any income, what is the point of the parent getting the payout in case of d/tpd of the child?? ok, probably in tpd situations, it may help in subsequent living expenses, but in death?

update: i found this:
http://www.insuranceinfo.com.my/_system/me...ld_edu_plan.pdf

great, now it confuses things even more.

"Under a child education policy, the child is the life assured, while the parent/legal guardian is
the policy owner."

so an education policy MUST be life assured=child??? then why are there options to insure life of parent for certain education policies?

this is so confusing, no wonder i never did buy any even after started looking at this 2 years ago! lol

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Added on March 15, 2011, 4:03 pmok, what are the current education policies in market which is:

1. endowment non-participating (meaning guaranteed returns)
2. term 15 years or less

so far i've seen ilp/endowment participating, are there any endowment non participating policies out there?

thanks!!

This post has been edited by poolcarpet: Mar 15 2011, 04:03 PM

To put things into perspective, an child education fund is basically an endowment type policy. Endownment because you are insuring an insurable interest's life within a fixed period of time.

I googled non-par education endowment and no satisfactory product crop up. My guess is that insurance providers are not offering it for some reason or other.

If you put in RM 3000 premium per year, do not expect all RM 3K to be tax dedictible because you can only claim tax relief on the insurance part.

For insurance to work, you must be insure a insurable interest (in this case your own child) hence in an education policy the legal owner is the legal parents and object of insurance is the child. It is just to satisfy the requirement of Insurance Act 1966.

The parents life is insured as a rider to waive the premium payment incase the payor/parents predecease the life-insured. This is important because in the unfortunate event that the parent predeceased, we must assume that the minor will not have the financial capability to pay the remaining premium.

If you name your child (minor) as beneficiary, he/she will not be able to use the money until 18y/o. The money will be parked at Amanah Raya Bhd (Public Trustee). If you name another person other than spouse or child, then the nominees can only act as a trustee (sec 167 of Insurance Act 1966).

Best is to name spouse as primary nominees and alternative nominees as trustee (can also name private company trustee such as Rockwills or OSK Trustee or ARB) incase both parents predeceases the life assured.

Hope this help.

Xuzen

Ok, I contacted LHDN directly to clarify. They do not have a list of education insurance which qualifies for the tax relief, but these are the guidelines....

a. Polisi yang diambil adalah untuk diri sendiri, pasangan atau anak;
b. Benefisiari polisi adalah anak;
c. Jika orang yang diinsuranskan adalah ibu/bapa, manfaat insurans hendaklah hak milik anak sebagai nomini polisi;
d. Jika orang yang diinsuranskan adalah anak,
- adalah wajib nyawa orang yang membayar premium (ibu/bapa) dilindungi (payor benefit rider);
- jangka masa rider mestilah sama dengan polisi asas;
- sekiranya rider dipakej bersama dengan polisi asas dengan hanya satu premium, kesemua premium yang dibayar dibenarkan sebagai potongan; dan
- sekiranya ibu/bapa tidak layak untuk payor benefit rider, premium polisi asas tidak layak mendapat potongan;
e. untuk polisi takaful, peserta adalah ibu/bapa dan manfaat polisi mestilah dihibahkan kepada anak;
f. jumlah matang untuk polisi konvensional dan polisi takaful mestilah dijadualkan untuk bayaran semasa umur anak di antara 13 dan 25
tahun.

So far i never see any education policy with life insured= parent

If the insured= parent-->usually we called it Life insurance ---> This lump sum of compensation can be used for full repay the housing loan (where we can call it MLTA), for family monthly expenses (were we can called it income replacement) etc etc.

If the insured= child--> The premium calculated is based on your child and the child enjoy the benefits of the plan.

So far havent come across endowment non-participating.
Recent market trend is whole life participating and whole life non participating. Endowment is giving a lot of financial stress to the insurance company.
If you want a term < 15 years, you can only opt for ILP. But in order to fully gain tax relief you must make sure the coverage is > the BNM coverage guideline which is quite high.
WIth this high coverage, hardly can get good return at then end of 10-15 years.

So, it means, it could be any policy, as long as I buy an insurance policy for my kid and I paid for myself as rider?
It could be (medical + unit trust + insurance) or pure saving or any other kind of policy?
Because, I am also looking to maximise income tax 3k relief on education fund for my kid.

If you are paying insurance for the previous year, usually you will have a certificate of premium paid. You can based on it and determined on which portion for tax relief.