written by KCLau @ KCLau’s Money Tips
This articles analyze the bestselling education endowment plan by Great Eastern Life Assurance (Malaysia) Bhd. – the GREAT EDUPLANNER
This article is part of my Great Eastern Product Review series that research a product a day during this week. Through the review published here, I hope you will have a better understanding of the different kinds of insurance plan that caters for different needs. We will learn about the traditional education plans today.
Great Eduplanner is a limited premium payment Endowment Assurance participating in the Compound Reversionary Bonus system. Three types of policy terms and premium payment terms are available as follows.
Figure 1: Policy terms and premium payment terms of Great Eduplanner
For a 15 years Great Eduplanner, policyholder only need to pay premium for the first 10 years, and get the maturity benefit at year 15th. I normally advise my clients to get the 15 years term Great Eduplanner because nowadays, children go for tertiary education as early as age 17. If you get a plan that is longer than 18 years, it’ll probably miss the initial years when the funding is needed for education fees.
1. Death & TPD benefits – basic sum assured will be payable to the policy owner.
2. Compound Reversionary Bonus (CRB)
The Compound Reversionary Bonus (CRB) that would be declared may be more or less, depending on the operating and investment results experienced by the Company. The CRB declared in the first three years will only be vested after the policy has been in force for three full years.
Figure 1: Details on the projected CRB
3. Maturity Benefit
Basic Sum Assured, Accumulated Compound Reversionary Bonus (if any) and Terminal Bonus on Maturity (if any) are payable on the Life Assuredâ€™s survival to maturity date of the policy. This is the total education fund you are going to save for your child.
4. Terminal Bonus Rate (Not guaranteed)
Figure 2: Terminal bonus calculation
Buy a Great Eduplanner for your Child if….
1. You are looking for a saving plan that will self-complete when you are unable to save anymore due to 3D (death, diseases, disability)
2. You want to take advantage to claim the tax relief given by government on education insurance plan. Make sure that the payer benefit rider is attached.
3. You wants a saving plan that provide average return without being exposed to investment risk.
Example of Sales Illustration
Child age 1, Father age 30 as payer, Sum assured RM100,000, premium RM10645.00 p.a. , term 15 years.
Figure 3: A sample of 15 years Great Eduplanner sales illustration generated with GELSIS 4.27
The quotation has 8 pages. If you are interested to read the quotation illustration in details, please contact me and provide relevant details such as date of birth, gender and budget.
In summary, the policy holder pays premium of RM10,645 p.a. for the first 10 years, wait another 5 years and he will get the maturity benefit projected in the range of RM135,067-RM159,662.
Figure 4: Line Chart showing the value of Great Eduplanner
Red Line – death benefit
Green Line – cash value
Blue Line – premium paid
Summary for Action
Great Eduplanner is a very simple plan. All you have to commit is the first 10 years premium. In return, you will get:
- maturity benefit that serves as your child’s education funds
- if something happens to you (3D) , your child will still get the money at maturity
- if something happens to the child, you will get the death benefit (value shown by red line in Figure 4)
- for the premium paid, you can use it to claim for tax relief. This is a big saving if your tax bracket is high.
Tomorrow, I will show you a very old plan from Great Eastern which is still available for sale now. Stay tuned!