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Education Endowment Policy QuotesAn education investment policy is a must-have for your investment strategy if you want to invest in your child’s education. An endowment policy is an investment like no other. This investment gives you the security you need to ensure that your savings plan serves its intended purpose when your child is ready for their education.
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Education Endowment Plan
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Education Endowment Policy
Why Do You Need an Education Endowment Plan?
Investing in you child’s education is the best way to invest in their future. Creating a provision for your child’s education through an Education Endowment Policy protects your child’s investment by keeping it safe from and creditors and saving on taxes. An Education Endowment Policy is a five-year investment that you can use to appoint beneficiaries and reduce your estate’s tax liability in the event you pass away. It is also a suitable investment vehicle for your child or loved ones.
Education Endowment Plan
How Does It Work?
What is the Minimum Amount?
Each investment manager reserves the right to choose the minimum contribution amount for their investment products. The average minimum contribution for an Education Endowment Policy is a recurring contribution of R500 per month and R30,000 once-off.
Can I Withdraw From My Investment?
You are allowed to take one loan from your investment after 12 months. Your loan amount is restricted to a percentage of your fund amount. You will need to repay this loan to avoid penalty fees.
What About Beneficiaries?
Unlike any other investment or savings plan, you may appoint beneficiaries on your Education Endowment Plan. This feature will help you use your Education Endowment Policy as a vehicle to create and transfer wealth. It can also help to reduce your estate taxes when you die.
What About Taxes?
While most investments are taxed in your hands as an investor, Education Endowment Policies get taxed within your fund. You may also use your Endowment plan to reduce your overall tax liability if you belong to a higher tax bracket.
What About My Estate?
An endowment policy is an excellent tool for estate planning. Because you can nominate beneficiaries, the investment value of your investment can go directly to your intended recipients, instead of falling to your estate and thus increasing your tax liability.
Can I Change My Strategy?
You can generally switch your investment portfolios once a year for free. You can change investment portfolios as often as you please, but additional changes within a given year may attract administration fees.