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b. The rider must also have the same duration as the basic policy.
c. Where the payor benefit is attached as a rider (i.e. a separate premium is paid
in addition to the premium for the basic policy) or is packaged together with the
basic policy (i.e. single premium), the premiums paid will qualify for tax deduction.
d. Where the payor of the policy does not qualify for payor benefit (due to high
risk), the premium paid for the basic policy will not qualify for tax deduction.
iii. In respect of a takaful policy, the participant is the parent and proceeds of
the policy must be made "hibah" (gift) to the child.
iv. The maturity amount or periodical payment of maturity amount in respect of both
conventional or takaful policy, must be scheduled to be payable when the child is
between the ages of 13 to 25.
3.2 Medical Policy
i. The expenses should be related to the medical treatment resulting from a disease
or an accident or payment of benefits for total or partial disability arising out
of a disease or sickness. The medical expenses need not necessarily be on a reimbursement
basis and can also cover out-patient treatment;
ii. The policy coverage should be for a period of 12 months or more;
iii. The policy can be as a rider or a stand-alone policy. If it is a rider, only
the rider premium can qualify for deduction. For example, a dread disease rider
attached to a basic policy, the whole amount of the rider premium paid by
an individual may be allowed as deduction. In the case where a dread disease cover
is packaged together with a term life cover or personal accident cover, 60% of
the packaged premium paid by an individual may be allowed as deduction;
iv. Group medical policy where the employee pays the premium for the medical benefit
also qualifies for deduction; and
v. Premium waiver benefit rider and travel medical expenses insurance are not allowable
as tax deduction.
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