“You can’t escape death, taxation or life insurance salesman” Herbet Denenburg.
Consumer Association of Penang laid down some guidance for you on life insurance. Do you really need the policy? Life insurance basically the policy where the risk insured against is the death of a particular person, the insured, upon whose death while the policy is in force, the insurance company agrees to pay a stated sum or income to the beneficiary.
Thus, the keyword here is the insurance policy beneficiary. It is the protection for your beneficiary.
1. If you a married man, you’re most likely need life insurance
Man is usually a breadwinner in the family. Thus, his death basically will cause his dependants lost financial resources, income and protection. Unless, you’re very rich person and your estate is more than enough for the next generation, then you don’t need life insurance.
You need life insurance especially when your wife is not working and you have children. Thus, they are all very dependant to you.
2. If you’re a wife, maybe you need life insurance
If your husband could give you more than enough, you’re unlikely need life insurance. However, if your income is vital for family income (both husband and wife) thus you should considered yourself to be insured too and your coverage may not as high as your husband.
3. If you’re kids, no.
Kids have no dependants, thus they don’t need life insurance at all. But remember, an insurance agent may says that insuring the kids when they are still young will mean savings on premiums and ensuring their insurability when they are grow up. The premium depends on the age of the policy holder thus, when kids are insured, the premium is low.
However, from the larger point of view, why spend your money in something that you not needed yet? It is better for you to create a special fund to cover their education in any investment fund. Only a small groups of children need insurance protection because of poor health.
4. Single, unlikely
If you are still a bachelor, you may not life insurance at all. Unless, you’re supporting financially your parents and family. However, please make sure you’re living healthily before you find out that you’re not-insurable because of your health problems. If you thinking to get lower premium, maybe it is the time too.
5 Comments
I wouldn’t classify in such large groups. One of the biggest reasons for life insurance is investments, you can save very large amounts of money on taxes. If you have a good income, you might as well consider investing in 10-15 year term policies. You can also use life insurance for charitable giving, options are many - just check the life insurance tips section on our website.
I beg to differ. The most you can save for taxes pertaining insurance in Malaysia is about RM 3000 per year. I wont buy life insurance for investment per say because of its low to medium return. However, it is good to substitute life insurance with MRTA (Mortgage Reducing Term Assurance) when buying property in Malaysia as life insurance covers you even until the property is fully paid up.
haii!!
when we talk about insurance, it’s about risk transfer instrument. NOT about investment or tax reduction or other things in mind.
there are few risk a person have ie premature death, ill health, loss of income.
a person should think which risk to be transfer, to be reduce or to avoid.
normally people should take a medical card & a term life insurance.
based on your blog, i’m aware its from Consumer Association of Penang but i think its not the right thing to do. the guidance they laid down it’s a view from income protection ONLY.
as a certified & licensed financial planner,i advising you not to publish or writen about financial planning to the public, because you r not trained in that area. it will missleading the public.
i know that you r trained LLB, just to inform you that you breaking the law based on security industry act 1993. (penalty of RM 1M or prison 3 year)
just licensed financial planner or financial advisor or investment advisor can do that.
bye
dear zack,
general information on financial planning is not breaching any law.
and why dont you build your own blog to create awareness among public on financial planning?
be my guest writer at least.
Hi, I agree with the first commenter that we shouldn’t classify in such large groups because each and every individual is different. That is why insurance companies offer tailored products. I also want to add that insurance does not only come handy for your loved ones when you die but it is also a good investment program because ,depending on the company, you get your money back in 5-10-15 years. If in doubt what to choose check out this Canadian life insurance sight about tips on insurance. Take care, cheers