In my opinion. I do not agree with this quote. Lets take an example

Mr.A just started working, with an investment policy lets say, cover whatever needed to be covered by a normal person. One day, he was hospitalized due to some reason, as he just started work, so he do not have any extra saving. And for that hospital fees, he have to pay for lets say RM20k. Things we need to consider is, where will this 20k come from if he didn't buy any insurance, as he do not have enough savings? Of course from the people that love him the most = his parents. RM20k should be OK for average parents. What if the parents is below average? Where will the 20k come from? For this moments of course his parents will do whatever things in order to get the 20k right? Beg, charity or whatever. Do you want your parents to do this kinda things? If they are not desperate, do you think they want to do this kinda things? What is wrong if u set aside only RM150 (From one of our discussion above) everymonth?

Another example, you are an employee of company ABC. Now you are paid RM2000 to work in the company. Knowing that economy crisis strikes, your boss ask you into his room, saying that, we are sorry to notify you that we have to reduce your salary to RM1850 or you will be sacked, will you accept the offer? As now looking for a good job is not easy. I bet you would. With sacrifying RM150, you still get to live right? Better than you lose everything...

Anyway.. Just my 2 cents..

Hmm.. Dreamers, just a question... Were you an insurance agent? I found out that you are quite familiar with Insurance kind of thing. And are you still an insurance agent now? I wonder if you have been cheated by insurance company or so? no offense seriously.. Just wanna know. Cheers... And for you guys info.. I am not prudential agent.

I also have few question for dreamer

1. Have you bought any life insurance in Malaysia?

2. If yes, what type of policy you have?
    If no, why?

1) May I just enquire what is your definition of costing too much?

2) Has anyone actually approached you with a plan before?

For example, assuming the average 30 yr old Male, a RM200k Non-par life plan would probably cost roughly around RM200 a month, RM2,400 a year. After 20 years, your cash value for this policy would be exactly the same as the amount of premium you have paid plus with an additional 10% bonus Guaranteed. Yes, its spelled out clearly in the contract.

A Term Life plan with the exact same RM200k sum assured would be roughly half of the price above but with 0 cash value at the end of 20 years.

If you are a left brain person, here are the number crunching part.

Non-par Life plan
RM2,400 a year x 20 years = RM48,000 + 10% Bonus = RM52,800 Guaranteed.

Term Life plan
RM1,200 a year x 20 years = RM24,000 Burnt with 0 returns

So assuming you invest the extra RM1,200 yearly in the bank with the average FD return rates of say 4% for 20 years (Banks are curretnly offering 3.7-3.9%), the value you get back at the end of the day is RM37,163.04.

However, since you say you are good with your invesment and you can get say 7% instead of 4% then you will get RM52,638.21. Roughly equivalent of what is guaranteed for you if you chose the first plan.

The rough data taken from Bank Negara website for the FD rates for the past 10 years shows the lowest was around 3% the highest around 11%, divide those 2 and you get around 7%. So with that, would it be fair for me to say that saving money long term with a good insurance company will almost always give better returns than FD with banks? If you had to make a decision on choosing where to save your money for 20 years, which would you choose?

Of course if you feel that you can definitely get much better returns that just a meagre 7% then go ahead. However, will there be risk involved? compared to this risk free 7% guaranteed which on top of the returns, you also get a life coverage of RM200,000 for that 20 years almost considered 'free'?

If you are a right brain person, here's some ideas for you to think about.

People whom are self-insured are taking a big risk whereby they save and then only create wealth.

People who realise the importance of insurance will not want to take that risk, they create wealth first then only start saving.

If nothing happens to them along the way then congratulations, you're well on your way to a good retirement. But what if something happens along the way and they decide to go on a long vacation and never come back? Would your family be able to survive if that person is a breadwinner of the family? How much savings have you saved so far? How long can it last?

Is there a reason why you would not want to create this instant wealth of RM200,000 by just putting aside RM200 monthly? Even if you're a millionaire, imagine buying a bigger policy of RM2 Mil, by paying RM2,000 a month. Instant wealth of RM2 Mil to your family should you go on a long holiday even if you've only paid for the first 2 months of RM4,000.

There's no way that you will stand a chance to lose out if you have adequate insurance. The problem is are you even qualified to buy a life policy? You might be healthly today, but what if you're very sick one day? Do you think you can still buy insurance even if you have lots of money? The answer is no, because you're not insurable anymore.

Just think about it and let me know if what I say is wrong and not true at all. I am always open for new ideas. But if you agree with what I have said and would like to actually discuss further on this topic. Feel free to pm me and we can further exchange ideas. 

1) I personally have 3 policies. I'm roughly covered for life a total of more than RM350,000 payout for natural death/TPD and RM500,000 if its accidental, together with a disability income of RM3,000 monthly, RM200,000 for critical illness and a medical card with a lifetime limit of 300k. I bought all these policies within the past 3 years. This is on top of what the company is already giving me.

2) Here are some of our basic definitions:

a. 3-6 months of emergency fund (liquid cash form)
b. Critical Illness coverage of at least twice your annual income.
c. A medical card to cover hospitalization and surgical expenses.
d. Life insurance and Disability insurance coverage of at least 10 times or your gross annual income.

How we derive it? Based on a research and survey done by asking all our clients what is thier wants and needs.

But just looking at it from another perspective, the reason you have to save 50% of your income is because if you don't and something happens to you along the way, then that amount would not be large enough to support your family's standard of living. If you have maybe taken like 5% of that income to get a life policy, then maybe you wouldn't need to save so much, perhaps maybe 40% and spend 5% more on yourself, you know go enjoy some nice candlelight dinner with your wife and kids kinda thing. At the end of the day, you would still be in almost the same financial position you are today as the cash value inside the policy is almost equivalent of what you have saved. This is the create wealth and save approach.

You talk about risk management, but which approach do you think is more risky? Should anything happen to you before you are here today, which approach would be able to help maintain your family's standard of living better? If I know that 20 years from now, that I would be in the same financial position with or without insurance, which is the better risk management method?
Again I congratulate you, you are the very few among us that can actually proudly say I'm self-insured. However, let me give you another point of view. For discussion sake, say you are hospitalized yesterday due to an accident and had to perform some minor surgery. Well no problem, it definitely would not effect much of your savings. But what if something more serious strikes, critical illness. How big of a chunk off your savings would that cost you? 3-5 years less to spend? 10? All I know is, it is definitely not cheap at all nowadays with medical cost rising year after year.

Another point of view to look at is when you are fully retired. You've saved your money diligently all your life, now it the time when you finally get to enjoy your fruits of labour. How young are you? 50's but still feeling as energetic as a 20 yr old ready to take on the world. You have retirement income that could last you at least 30 years down the road. There's really nothing that could hold you back from this new life of enjoyment... or is it? Have you ever notice why most retiree's actually dare not spent thier money unnecessarily? In the olden days, they would probably keep it in a Milo Tin stashed somewhere under the bed. The reason behind it is because what if they are hospitalized one day and need to spend a lot on medical cost? Most would not want to burden thier children, so they always have this fear inside that is holding them back from spending thier hard earned retirement income. So how do you overcome this problem? Would a simple medical card coverage which would cost just a fraction of your total retirement income you have be a possible solution to you? Would it give you the peace of mind to actually spend a bit more on yourself without the worries of having not enough later on?

So what I'm saying here is insurance will help you retain your wealth so you will always be on the positive side never the negative especially when you start young and healthy and the cost stays fixed for the rest of your lives.
I have never claimed that traditional insurance is a good investment scheme, however what I'm claming is that traditional insurance is the best form of savings and protection period. There is no other product out there in this world that could give you instant wealth for a fraction of the cost should something happen to you period. ILP on the other hand could be an alternative to an investment and protection scheme.

I think one thing that we should take into consideration is the inflation of malaysia.. well... Living expenses inflation... Education fees inflation.... MEdical fees inflation.. I think we should take that into consideration as well.. As it is a main factor to determine weather we have or haven't have enough insurance... Well... This is not 100% correct, it is just that we could be better prepared... It is better MORE than LESS when you need it the most right? Another thing is that... the expenses that we take into consideration.. I think we should increase it every year.. As our salary increase everyyear right...And i think everybody agree that when salary increase, most people do use more and spend more right? Hmmmm.. That is what i am talking about.. we should take that consideration in as well.. Another thing is that... This kind of things, i mean risk planning kind of thing, should be reviewed every year as our financial situation might be totally out of what we have predicted... Right? Hmmm. Just piece of advice... And insurance agent out there.. I thought you guys attend RFP? How come didn't take that into consideration throughout this discuss? weird... Yet... Just my 2 cents

FYI i am not insruance agent
Can you point out which part i am wrong?
I will be more than happy to learn from you.
thanks.

Dreamer,

How many people can actually do like what you did.
Lets assume average income is RM2K. I doubt that he will survive by practicising your method.

Hmmm.. I wonder...What if the people... Start working for 1 year.. then diagnosed with CI? I wonder will the bank save him or the insurance save him? what happened to the hospitalization fees and the living expenses after that? If you claim that you company did give u that benefit.. Fine... And please check with you company, what hospitalisation benefit doyou have.. And how much is it? I wonder how much one operation need? For some illneses you even need 2 to 3 operation. You are now healthy that is why u said all this... Insurance is like a parachute... When you need it and you don't have it... You won't need it again.  And dreamers... I believe youngster out there... oni 2 out of 100 will be like you...  I deeply congratulate you for being self insured.. But have you consider the possiblity of all this that are list down previously happened at once.. Will your saving be enough? Consider it again. And... What happen to your living expenses if u are not able to work anymore? charity? sigh... If you like to keep saying that insurance agent like to earn people money... Who don't need money for a living? sigh.. Don't be so selfish. I think what insurance earn is what they should get... Do you know that they need to serve you forever even if you buy the smallest policy from them? Isn't that worthwhile give that a little bit more commission? I also dunno lah... this thread is meaningless to me anymore.. Just like people bargaining on the street.. Hmmm.. You guys have fun lah...

spending bout RM300 a month on a RM200k coverage is bout as max u can go. thats wut i think anyways... anything more than that.... consider it alot.... but u will increase sum assured if u have property and a wife. house loan without insurance is dumb. if anything happen to u at least ur death can pay out the house and make ur loved one's life abit easier to take. its call life planning....

my 2 cents...

dreamer, not everyone is well verse with life planning. it takes time to learn. u were once learning rite? and still are now. learning never stops... so chill la bro....

Let say one's family household income is 3K with 2 childrens. To save 50% of their income is not easy as someone might think.

In basic financial planning, 5% goes to insurance and another 5-10% goes into savings. I think this formula is suitable for most of the people.But of course, if you can save more than that,its better.

just bought insurance.  i feel great becoz i know wat i buy(compared to some of my friends who paid life insurance 200 per month onli to know they will receive big money after 20 years). i bought 3 separate pa, medic card and CI+life insurance which cover around 200k for each and cost me total 2k per annum. many thanks for those educate me here especially to dreamer and zarth. i've learn many thing during my quest for suitable insurance
i earn 2.5k and save 1k per month. i no doubt i can survive in the long run. by next 10 years i'm sure i can self insured. wat disturbed me is wat happen before i reach the point. i wont feel like that if i have rich famili who can support me. and i dont want to gamble my future
thats the reason. i don want single event destroy my hope, my future. if i cant strive, my last hope is not burden my poor famili

supreme living care from GE. covers death,permanent disability (hand/legs cannot work also claim - permanent liao wut) and CI (critical illness). not only disability is important.... CI is also very very important.... we used to think that ppl aged 50-60 will kena cancer... now we find younger generation kena cancer ade. so? its also important issue here for CI. and medical card is as much as an importance also. if u cant afford insurance, get a medical card.

my insurance used to be RM100k coverage. but now that i own a house (loan is RM200++k) so i just up my coverage to RM200k just in case anything happen to me i dont need to burden my family or loved ones. thay can just clear the house sum at one go. insurance is not for untung wan... its for u to feel secure u dont need to burden ppl after ur gone or while ur still here u kena CI/disable u still can survive. if u looking for untung, invest in stocks better....

RM200k coverage RM300+ a month only. its not only the house it can cover. lets say u die young... u have kids... the MRTA will cover the house... ur kids? let ur wife work hard to feed them is it? come on... u dont have to calculate so much rite? LOL.... i trust insurance agency better than bank anytime but have no choice buy MRTA only. my mrta also is RM200k (full coverage) pay more little bit ok la... cut off the lanslide thingy off. my house not on a hill also....

lets just say IF U ARE PREPARED NOW... if u die young, ur family,wife at least have some money to roll. RM200k in the coming days is not much my dear frens....so think about it...

just my 2 cents

even not welcomed but still wanna join

say hi to all big brother and big sister here~

i am from GE and looking around here to see there is anything i can learn or help

dreamer....i dont think there is a choice by not buying MRTA. u have to get it from the bank.... no choice unless u get loan from insurance company.... if from bank, they will get it for u... compulsary rite? i dont really know the payout scheme.... but how also.... i better get my own insurance topped up... u know how banking works... SLOW...

thanks dreamer yr advise....  the insurance co are fallen now because of they invested in those risky investment.  their main source of income should be premium charged, but they are in trouble now because of the big loss on the investment they took.  so aia may be sold out if its parent co got better offer from any interested co.  what do u think?