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FAQs on Child Education Policy

    If I buy a small policy now, and want to increase my savings later, how can I do so ?
      The flexibility to increase the amount of savings will depend on the type of policy you purchase. An investment-linked policy allows you the flexibility to increase savings via top-ups anytime, while a traditional endowment policy tends to be less flexible. However, some endowment policies do offer the option of top-ups as well. Check with your agent on the terms and conditions attached to the top-ups and how much of the top-ups would go to the savings or investment.
    How will I make withdrawals when the time comes ?
      Look for a policy that allows flexibility especially since costs for education are often incurred over a period of a few years. There are endowment policies which will allow you to receive part of the insurance benefits before maturity, for example, payment of 30% of the insurance benefits three years before maturity, another 30% two years before maturity and the remainder upon maturity. If the policy is an investment-linked plan, withdrawals can be made through redemption of units at anytime.
    What are the criteria of education policies to qualify for income tax deduction?
      Education policies which meet the following three criteria qualify for annual income tax deduction of up to RM3,000:
      the education policy must be taken up by the parent/legal guardian;
      the policy must mature when the child reaches the age of between 13 to 25; and
        payor benefit rider must be opted throughout the life of the policy.
    I do not have any children, but would like to buy a policy for my niece. Can I?
      No. Only a parent/legal guardian can effect the policy for a child. However, you can still arrange to buy and pay for the policy with the co-operation of the parent(s)/legal guardian. In this case, you will have to give up all control over the policy to the policy owner, i.e the parent/legal guardian.
    What happens to the policy in the event of early demise of the child?
      In the event of early demise of the child, the death benefit would be payable to the policy owner (parent/legal guardian) and the policy will terminate. However, depending on the type of child education policy that you have purchased, the full death benefits are only payable if the child dies after a certain age (normally after the age of four). You may wish to check the terms and conditions of the policy to know when you are eligible to receive benefit payments.
    Can the policy be transferred to any one of my other children ?
      No. The life assured remains the same throughout the term of the policy and benefits are not transferable to anyone else.
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Child education plan
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