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Education and medical insurance play a crucial role, especially in facing the increasingly challenging life. Essentially, education insurance provides protection and ensures the educational needs of children are guaranteed. On the other hand, medical insurance provides financial protection for individuals and families when facing health issues.
Important Things You Need to Know About Education and Medical Insurance or Takaful in Malaysia
Insurance protection is commonly associated with personal protection, health insurance, home insurance, car insurance, and so on. However, in addition to these insurances, most insurance companies in Malaysia also offer education investment for your children.
The combination of education and medical insurance can be considered beneficial and relevant. This is because, besides providing protection against any financial risks, this insurance also offers protection and investment for the future.
In this era of increasing economic challenges and the cost of living, it is important for you to plan for your children’s education and medical needs starting from now.
1. Education Insurance in Malaysia
Education insurance is a life insurance product specifically designed as a way to save for children’s education. When children reach the age of 18 and above, the funds can be used to finance their higher education expenses.
Fundamentally, education insurance provides peace of mind to parents or guardians. If something unfortunate happens to the parents or guardians, the children still have access to quality education.
In other words, the fund serves as a financial guarantee to cover education expenses.
Types of Education Insurance
There are several types of education insurance available in Malaysia – endowment policies and investment-linked policies. The difference between these two types of policies lies in their structure and investment options.
Endowment Policies
These policies combine savings and protection elements. They can be participating or non-participating. For non-participating plans, the policyholders do not share in the profits, but all insurance benefits are fully guaranteed.
For participating plans, only a portion of the insurance benefits is guaranteed. The full sum of benefits at the maturity of the insurance is not fully guaranteed as it depends on the performance of the insurance company.
Investment-Linked Policies
An investment-linked policy combine investment and protection elements based on your needs as the policyholder. They offer flexibility – you can increase the monthly premium contributions (or savings) when your income source increases.
If your investment risk tolerance is more aggressive, you can choose the investment instrument or fund type to be invested in – it involves higher risks similar to any other investments.
Additionally, there is no guaranteed investment return. This means that the returns may be higher or lower than projected.
Before choosing any suitable education insurance policy, you can consider the following:
- Determine the amount of money you want to allocate for your child’s education.
- The type of policy you purchase depends on your goals and risk tolerance.
- Ensure that you choose a policy that can be accessed when needed – such as a policy that matures when your child starts higher education or one that allows you to receive partial insurance benefits before maturity.
- Ensure that you can afford the insurance premiums as education policies can be considered long-term monthly commitments.
- Choose a policy that offers flexibility to increase savings.
2. Health and Medical Insurance in Malaysia
Health insurance (also known as medical insurance) in Malaysia is a form of insurance protection that covers you against unexpected medical costs. It includes hospitalization expenses, surgeries, medications, and other healthcare-related expenses.
In other words, health insurance provides protection to individuals and families from financial risks associated with high medical expenses.
With health insurance, you no longer need to worry about expensive medical treatments, and you can now afford to receive quality healthcare without compromising your finances.
3. Comparison of Education and Medical Insurance in Malaysia
Both education insurance and medical insurance have different objectives and scopes of coverage. Therefore, you need to make your own assessment and choose insurance that suits your needs and preferences. Here is a comparison between education insurance and medical insurance for your reference:
Scope of Coverage
Education insurance provides financial protection specifically related to education investment. On the other hand, medical insurance provides financial protection specifically related to health issues.
Benefits of Coverage
Education insurance provides benefits when the policyholder reaches the maturity age. Medical insurance, on the other hand, provides benefits when the policyholder faces health issues.
Importance of Insurance
Education insurance is important in ensuring that the policyholder has sufficient funds for education. Additionally, it also offers advantages for the future.
Medical insurance is important in ensuring that the policyholder does not face financial difficulties when dealing with health issues that require high expenses.
Maximize Tax Deductions for Insurance, Purchase Takaful, Education, and Medical Insurance Today
Insurance premiums or takaful contributions are eligible for tax deductions in 2023 that you can claim. You are generally eligible to claim tax deductions for insurance or takaful as follows:
- Insurance/Takaful and EPF contributions for retired government employees – Claims are allowed up to RM7,000;
- Life Insurance/Takaful for private sector employees – Claims are allowed up to RM3,000;
- EPF and approved Investment Scheme (excluding government employees) – Claims are allowed up to RM4,000;
- Education and Medical Takaful/Insurance – Claims are allowed up to RM3,000.
Purchase Education and Medical Insurance for Financial Well-being
Education and medical insurance are still relevant forms of insurance protection that individuals in Malaysia should consider. Education insurance allows you to plan and save sufficient funds for your children’s education.
Health and medical insurance, on the other hand, play a role in safeguarding financial well-being, especially in the event of medical emergencies. Essentially, the combination of education and medical insurance coverage can provide peace of mind and financial protection for the future.
Therefore, it is important to choose insurance products that are suitable for your needs and circumstances. This includes considering factors such as the type of insurance product, terms and requirements, as well as the reputation of the insurance company.
Furthermore, if you are interested in obtaining takaful or insurance for your child’s medical and educational needs, visit the Qoala website for more information. Qoala is the best health insurance comparison platform in Malaysia. The platform also offers an easy and fast online insurance purchase process.
