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!!

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!!

thanks. i already have this.

---

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

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.

---

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

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??)

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??

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

thanks!!

Hi all,

Thanks for the very good discussion... so in the end, there is no policy out there that can meet my specific requirements, right?

1. Education insurance for child
2. 3k premium per year, either payable monthly, quarterly or yearly not a problem.
3. Minimum protection of life/TPD of child - RM10k? RM5k even if possible?
4. Cash value upon maturity
5. 100% tax relief claimable (of the 3k)

There is no such policy? The idea is to take advantage of the income tax relief, say at 26% - the 'effective' payment is RM2220 for the 3k premiums. Assuming Great Eduplanner can fit this for the 15 yr policy, that means total premiums paid RM22,220 over 10yrs and upon maturity at 15 yrs, cash value will be paid out.

I appreciate all the PMs and info, but I am very specific in what I'm looking for - if this does not exist, that's fine - I'm not looking for any other insurance/medical/CI/savings/etc...... Thank you!!

This post has been edited by poolcarpet: Mar 12 2011, 08:45 AM

Just to put in my comments - not to offend ANY agents or insurance companies here. But ALWAYS ALWAYS remember past performance does not indicate future performance. Even if a company is doing well now, anything can happen. Would anyone have predicted what happened to AIG? All companies exist to earn profit. Give value to shareholders. Board and management can change. Policies can change which might affect one company over another. No one can predict the future.

So that is why I personally don't like being too tied down to a certain insurance company. Those policies which mention coverage till 80/90/100 yrs especially, personally I would avoid those. But that's only me. I prefer shorter term coverage, e.g. 1 year PA renewed yearly for coverage against accidents, e.g. for education I want the coverage to mature when child turns 18 or 20 latest. At that time, I can look at my financial position (can I dream and possibly be the next Robert Kuok?) and then re-evaluate my needs (if I have billions, do I even need any more insurance? ).

---

Added on March 12, 2011, 8:55 amThanks Nepo, I am of the opinion any insurance policy for children should cover the life of parent not child. I have seen few proposals where the insured is the child, to me, what for? I get proposals for RM150k coverage on child. If anything happens to my child, I don't want a single sen. It should be the other way round, anything happens to ME, then the child is the beneficiary (to support his future education needs).

I would be very grateful, if anyone can let me know which education insurance fits my requirements and also these below (insured = parent)

Thanks!

This post has been edited by poolcarpet: Mar 12 2011, 08:55 AM

i am very surprised if insurance companies haven't done this for their potential customers!

---

Added on March 12, 2011, 9:24 amwhy delete?

This post has been edited by poolcarpet: Mar 12 2011, 09:24 AM

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

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

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

---

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

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.