Question 1

Is an education insurance plan better than saving myself, ASB or investing?

Accepted Answer

Each has strengths. Saving, ASB or investing is flexible and liquid, but stops if a parent dies or can’t work. An education insurance plan builds discipline with fixed payments and can include a premium waiver, so the plan continues if the parent can’t pay. Many families use both.

Question 2

At what age should I start saving for my child?

Accepted Answer

As early as possible, ideally soon after birth. A longer term means smaller monthly amounts and more years of compounding.

Question 3

How much do I need for university, local or overseas?

Accepted Answer

It depends on the university and course. Local public universities cost relatively little, while private and overseas universities cost much more, plus living costs and exchange rates abroad. Estimate today’s cost and project it to age 18 with education inflation; Lulu can do the maths with you.

Question 4

If a parent dies or becomes disabled, does the education plan continue? (payor benefit)

Accepted Answer

Yes, if it has a payor or waiver of premium benefit. If the paying parent dies, becomes totally and permanently disabled or has a critical illness, future premiums are waived and the plan still pays out to the child. This is the biggest difference from saving on your own.

Question 5

Are education plan returns guaranteed?

Accepted Answer

Usually partly. The guaranteed portion is written in the contract; bonuses or investment returns depend on the insurer’s performance. When reading the benefit illustration, separate guaranteed from non-guaranteed amounts and don’t rely on the highest projection.

Question 6

If my child doesn’t go to university, can I get the money back?

Accepted Answer

Yes. The money doesn’t have to be spent on university fees. It is paid to the policy owner under the policy terms and can be used for vocational training, starting a business or savings.

Question 7

How much do I lose if I stop paying halfway?

Accepted Answer

Surrendering in the early years usually returns much less than the premiums paid, because early costs are higher. Choose an amount you can sustain. If money gets tight, ask about reduced paid-up or premium adjustments before surrendering.

Question 8

What is the difference between an education plan and SSPN? Can I do both?

Accepted Answer

SSPN is PTPTN’s national education savings scheme, flexible to deposit and withdraw, with its own tax relief. An insurance education plan adds discipline and a premium waiver if the parent can’t pay. You can use both together.

Question 9

Is there tax relief for education savings?

Accepted Answer

Yes, in different ways. Net SSPN deposits have their own relief, and premiums for an insurance education plan may qualify for life or education insurance relief depending on the plan. Limits can change, so check LHDN’s latest rules.

Education fund: 9 questions parents ask