argh.. now study for the investment link exam...

tomolo exam....

ZiyiIsmyIdol,

You should thank me. I am teaching you more about insurance. USA has a lot more financial consumer protection and education. So, people are MORE well educated. If you can DEAL with me, then, you can sell insurance to people that moved back from oversea.

Actually, I am a very easy customer. I know what I want and how much I want. I can tell you exactly what kind of information that I need and whether you can sell to me or not.

All,

A basic personal financial tenet is a person need to have 3 to 6 months of expenses saved in a bank A/C or FD. This is his/her first level insurance to cover all his/her emergency. Even if a person has insurance, it takes time to claim the insurance.

It is arguable whether a person should buy insurance before or after he/she build this emergency fund or concurrently. But, if a person buy so MUCH insurance that he/she does not has anyway to save for emergency fund, he/she is buying TOO MUCH insurance.

1) Do young graduate with NO dependent and staying with parent should buy life insurance??

My basic rule is if the young graduate is supporting the parent, the answer may be yes. If not, the answer is no. The basic reason is the death of the person does NOT represent any financial loss to the parent.

The person should build a 3 to 6 months emergency fund. Those money can be used to cover many many more emergency than whatever the life insurance cover.

2) Do retiree need life insurance??

It s all depend on whether the person has retirement income that based on whether he/she is alive. If not, there is NO income loss from the death. If a person wants to buy life insurance to cover funeral expense, he/she should buy enough life insurance to cover those expense. That is all. DO NOT BUY TOO MUCH LIFE INSURANCE. A person should buy MORE medical insurance if he/she has money.

Dreamer

This post has been edited by dreamer101: Dec 10 2006, 11:49 PM

im totally fail in this... i been working for almost 1 year, yet my account is nothing...

pay too much of insurance... sigh... wat i can do... it's my aunty who offer me this...

u mean life insurance? i thinks i myself not yet got 1... but is saving insurance and critical illness insurance sort of...

<<saving insurance and critical illness insurance sort of...>>

1) Saving insurance??

I think you mean investment linked insurance which is life insurance plus investment option. Insurance is NOT a good primary saving option.

2) Critical illness insurance??

You need some emergency fund to handle normal financial emergency which is very likely to happen.

Insurance is risk management. You plan for risk management based on what is most likely to happen. You CANNOT be insured for everything. It is too expensive. You insure based on the likeliness of occurance and the cost of the occurance.

Dreamer

Most basic medical insurance currently in the market would only cover the cost involved in hospitalization and surgical fees such as Room & Board, Pre & Post Hospitalization cost, Emergency evacuation cost. etc. Meaning they only cover the bills, no extra pocket money.

Its best not to post any products here as this is discussion forum not a place to advertise. However, I've sent you the info you need in your pm.

There's just so many products out there with newer ones coming out every now and then with slight differences and benefits. There might be those can give you extra income, but it would probably be a packaged product where you pay more.

To help you decide better, ask yourself what are the things you value in a product? A trusted brand? A well established company with a long and good history in the industry? Most of the time its simply because of the trusted agent.

About your second question, yes you're right. If you're a healthy person with no family history of illnesses, then you pay the normal rate any other person within your same age bracket enjoys. If you already have say a previous illness and would still like some cover in case any other illnesses arise, you could still buy. Insurers will evaluate your situation and depending on how risky it is, they could either decline you, exclude certain coverage or you would have to pay additional premium loading.

Regarding the profession you're in, yes the risk involved dictates whether you have to pay more or not. The basic thumb rule is divided into 4 classes. Class 1 and 2 are the ones whom are mostly working in office environments, Class 1 stays indoors most of the time while Class 2 goes out to do fieldwork once in a while. Class 3 and 4 are the ones that are working in non-office environments. Egs. of Class 3 are drivers, plant and factory workers while Class 4 are such as construction workers and maybe an ambulance driver. There's also special conditions involved if you're a professional sportsmen like a F1 driver or a Footballer.

Hope this answers your queries.

Insurance is not a good investment option, however its a good savings option. Furthermore there are plenty of different products to cater different needs. Not juz 2-3 products, but the right mixture can create hundreds of different solutions. I'm not asking everybody to put all their FD into insurance. I only ask a fraction of that total portion.

Btw dreamer, i was living in USA for good few years. I know about their insurance. Their medical insurance are top notch. But now I'm living in Malaysia. So i tried to make the best out of it even though our system is not as up to mark with them.

Also i have quite a number of clients who moved back from oversea.

Very true, one of the most basic element in financial planning. I recommend at least 3 months for singles and at least 6 months for non-singles with dependants. Say a single who earns an average income of 2200 monthly? That would come up to around 6600? Put it aside in a separate bank account and keep the atm card hidden under your pillow not in your wallet.

Are you a parent yourself? If no, then I can understand your point of view. But from my experience in dealing with parents, and when I ask them what is thier biggest investment. Guess what is the most often answer given. Yes, its not the 3 storey banglo, its not the merz or bmw. Its simply thier children. Most parents consider thier children thier biggest investment!

Think about the amount of money spent to get them into the best medical school so that one day they could be a doctor and earn thier own living. Yes, they may NOT need you to support them and yes the CAN still survive without your help. But what about the amount of money spent nurturing you since you're a baby to where you are today? All gone in a flash. Do you think that it does NOT represent is any financial lost? future potential income lost? past income lost? Are those considered financial losses? Yes? No? You decide.

Taking the example I used above, say you have this 6600 in the emergency fund. When you mean cover many many more emergencies? What kind? Quitting your job but still can survive for a while before goin out to find a new job? Car breaks down, tyre punctures, emergency repairs and a new set of tires? A friend or a loved one hospitalized and needs a bit of cash? Whatever it is, yes that is what it is meant for an emergency fund when the need arises.

What kind of emergencies does a say a RM150 monthly life insurance which pays out RM100k upon death or tpd with RM10k annual perpetual income for life if disability occurs? Yes, the major irrepairable emergencies. The lost of someone's life, disability, the lost of income, the lost of a son, a daughter, a father, a mother, a friend etc.

How many many more emergencies do you need to make up to that one big major one? Is it even fair to compare which one would be able to cover more?

Zarth,

<< Are you a parent yourself? If no, then I can understand your point of view. But from my experience in dealing with parents, and when I ask them what is thier biggest investment. Guess what is the most often answer given. Yes, its not the 3 storey banglo, its not the merz or bmw. Its simply thier children. Most parents consider thier children thier biggest investment!

Think about the amount of money spent to get them into the best medical school so that one day they could be a doctor and earn thier own living. Yes, they may NOT need you to support them and yes the CAN still survive without your help. But what about the amount of money spent nurturing you since you're a baby to where you are today? All gone in a flash. Do you think that it does NOT represent is any financial lost? future potential income lost? past income lost? Are those considered financial losses? Yes? No? You decide.>>

1) I am a parent. I DO NOT considered my children as financial investment. I plan so that I can survive/retire WITHOUT my children support.

2) I always tell people a very simple fact. If you REALLY REALLY LOVE YOUR PARENT, why don't you give the money to your parent NOW?? Why do you have to buy a life insurance so that YOUR PARENT GET PAID WHEN YOU DIE?? Does it makes any sense??

<< What kind of emergencies does a say a RM150 monthly life insurance which pays out RM100k upon death or tpd with RM10k annual perpetual income for life if disability occurs? >>

3) I am a very precise person. I said life insurance does NOT make sense. But, disability and medical protection may make sense for people in those situations depending on what kind of company coverage that they have. For young people, disability presents a larger financial risk than medical or death.


The situations that we are talking about here and which is VERY COMMON in Malaysia is
1) young people buy TOO MUCH life insurance and they have absolutely NO SAVINGS and EMERGENCY FUND.

2) Young people buy life insurance so that their parent can get something when they die. But, give NOTHING or very little money every month to their parent. Does this make any sense??

Besides stupid customers, lousy insurance agents share some of the blame too. How should a person ONLY buy insurance but NO SAVINGS or EMERGENCY FUND??

Dreamer

P.S.: RM150 per month on insurance may or may not be a lot of money depending on how much money you earn per month. If you only earn 2k per month, that might be TOO MUCH insurance.



This post has been edited by dreamer101: Dec 11 2006, 05:15 AM

I think the key point is we discussed here is

1. Buying too much insurance which resulted no saving or emergency fund. Saving or emergency fund should be the priority.

2. Should prioritise the essential insurance. Either medical first or life first then only PA and something like that, but not PA first.

3. Yes, children is parent investment and obligation but don't expect it getting return for you, totally wrong mindset. When children grows up, it is their life and not your 'property'. I am not saying children shouldn't take care of the parents but should be the other way round, the children already grows up and can survive themselves then parents needn't to provide financial support anymore.

Please explain the defination of EMERGENCY FUND. TQ.

1) Agree.

2) In USA, typical advice for young people is disability protection is the highest priority. The reason is
A) Young people less likely to get sick and seriously ill. Medical insurance is less important

B) Young people less likely to die and earn less money. So, need less life insurance.

The worst case financial situation for young people is if they are disabled. And, because they are young, they will need a lot of income/asset to support them if they are disabled.

Since Malaysia has NO disability insurance that cover a person regardless what kind of disability or whether it is PERMANENT and TOTAL, a person probably has to buy something else.

Now, what is the leading cause of disability in Malaysia?? Car accident?? I have NO idea?? Personal accident may be a good idea if accident is the leading cause of disability for young people and the policy cover that.

This is where an insurance agent can provide value and actual service to the customer. Find out the risk profile of the customer and provide coverage for most important and severe risk for each customer.

3) <<3. Yes, children is parent investment and obligation>>

I LOVE my children. That is all. They are NEITHER my investment or obligation. It is LOVE.

Dreamer

As far as I know many insurance companies in USA has world-wide coverage. So why not subscribe to them even if you live in Malaysia ?

What do you think dreamer101 ?

1) I do not need any term life insurance at this moment so I did not research this part of equation.

2) Medical insurance and disability insurance in USA costs too much due to high cost of living.

Dreamer

Halo i cannot afford to pay my insurance in USD la brother. I earn RM ask me to buy USD? U know how expensive their medical insurance is? If convert back, total to beribu-ribu....

Also there are terms and condition on how a person can buy insurance in certain countries.. e.g msia, u need to be a citizen, PR, or working in Msia.

I am neither 3 of them in USA.

Its different than ur Public Mutual i guess....

I wonder how Public Mutual is relevant in this discussion.
What about insurance in Singapore ? Could be slightly more expensive but at least you get what u need (assuming they have such insurance).

This post has been edited by luqmanz: Dec 11 2006, 10:50 AM

I focus on domestic more than international... Go Democrats!! ops off-topic...

I don't know much about other countries' insurance.. but I do know that money will be lost in exchange rate...

<<i cannot afford to pay my insurance in USD>>

That statement is NOT necessary true. USA term life insurance can be cheaper even after currency conversion. Especially, if you are looking for term life insurance that pays more than RM200K.


It is possible. But, I have not look into it since I have NO Singapore PR.

Dreamer

Let's compare....
My company's term life for my age 200k coverage (including TPD) is RM766 a year. RM 608 (excluding TPD).

So that's 766/3.8 = USD201
608/3.8 = USD160

Anyone knows USA Term assurance premium?

http://www.budgetlife.com/expertquotes.htm

Check out yourself.

USD $144 per year for USD100K coverage assuming 25 years old and 30 years coverage.

Dreamer

yeahhh that's help. thankss..

so during the process, i need to give them my medical report so they can evaluate my condition? for the profession class, is there any subclass for every class?



dreamer101,

for medical insurance, how much is too much? should be below 5% from salary? is it wise to pay more to maximise tax relief (medic insurance = up to3k relief)