Yup, there are Term Insurance as well as Total and Permanent Disability Income Benefits in Malaysia for quite some time now.

I'm not promoting anything here either, but yea, the company I represent has the widest range of insurance products in the malaysian market as well as being the largest insurer in the world.

However it is not really heavily promoted as most malaysians tend to dislike products with no returns.

Here's an excerpt stated in the contract,

Permanent Total Disabilty Benefit - provided that such Permanent Total Disability has continued for a period of 12 consecutive months.

Here's the definition

"Total and Permanent Disability" means permanent, total and continous disablement which wholly prevents the insured from ever engaging in any gainful work, occupation or business for which he/she is reasonably qualified or fitted by knowledge, training or experience.

While the insured is above age 60 and is not engaging in any gainful work, occupation or business at the time of the injury, the insured shall only be deemed permanently and totally disabled if he/she sustains injury causing a permanent inability to perform three (3) or more Activities of Daily Living as herein defined either with or without the use of mechanical equipment, special devices or other aids and adaptations in use for disabled persons.

"Activities of Daily Living" shall have the following meanings:

(a) Transfer - Getting in and out of a chair wihtout requiring physical assitance

(b) Mobility - The ability to move from room to room without requiring assistance.

© Continence - The ability to voluntarily control bowel and bladder functions such as to maintain personal hygiene.

(d) Dressing - Putting on and taking off all necessary items of clothing without requiring assistance of another person.

(e) Bathing/Washing - The ability to wash in the bath or shower (including getting in and out of the bath or shower) or wash by any other means.

(f) Eating - all tasks of getting food into the body once it has been prepared.

Hope this clarifies things a bit, and just for reference purposes the company I represent is an american company.

When it comes to buying investment linked insurance, basically you are buying a 2 in 1 product, insurance and unit trust combined. The advantage of such a product is that you get the best of both worlds.

Basically it caters to those whom wants protection as well as an investment component. These are the people that have limited time, knowledge and experience about investing whom wants protection convenience in an all in one package.

And because of that 'convenience' you pay the insurer the cost of insurance (COI) as well as the cost to manage your money, the task of helping you invest in the funds you prefer. As to the breakdown of the costs, it differs slightly from each insurer.

The 2 types of investment linked insurance are the Regular premiums & Single premiums. Both invests in a wide range of investment funds covering real estate, equity, fixed interest, local, international, internal and external, etc.

Regular premium products cater to those that want adequate insurance and yet do not have an initial large capital to invest but would like to invest in smaller amounts over a period of time. Its roughly a 40/60 breakdown for the initial 1st-2nd years while gradually shifting towards 100% investment in the later 3rd-7th years. This is done so that in case your investment suffer any loses during the initial few years, you would still have full insurance coverage over the period of time. As your investment grows, the cost of the insurance is deducted from the units gained from your investments.

Single premiums on the other hand works exactly similar to Unit Trust and yet it offers you a little bit of protection with negligable COI. Caters to those whom have a larger initial capital and would still like enjoy the tax advantages of an insurance product.

In both types, ad-hoc top-ups, withdrawals and fund switching can be done anytime. Dollar cost averaging concept is used for these products as it eliminates the emotion factor as well as the need to time the market.

Do bear in mind that purchasing an investment linked insurance is a medium to long term commitment and is not meant to be a short term profit taking product.

Hope this can be useful for those considering to purchase investment linked insurance products.

There's more under the contract:

Temporary Disabiltity Benefits
- provided disability period is not less than one week and maximum payments do not exceed 52 weeks.

These are the definitions under it:

Temporary Total Disability - disablement which prevents the insured from performing ALL of the duties of his occupation.

Temporary Partial Disability - disablement following Temporary Total Disablement continously prevents the insured from performing SOME of the duties to his occupation.

There are still coverage for the above and I do believe that it is quite similar to the LTD though it might be worded differently. And yes, the products they have there are far more superior and we're still far behind.

I think the one type of insurance that malaysia doesnt have yet is retrenchment insurance.

http://www.insuranceinfo.com.my/

The best place to read up on which type of insurance best suit your needs before making a decision.

IMHO, the main reason when buying any life insurance is because you want the protection.

1: ILP = Term+Unit Trust, exactly that.
You will be charge exactly like a Term insurance with zero returns on the portion allocated for COI while you will be charge the same fees and management cost of buying Unit Trust on the portion allocated for Investment. The cost of the convenience factor involved in ILP is almost negligable in most cases which ranges from RM 3-5 for annual modes.

2: Whole life products can be of 2 types Participating(WLPP with higher premiums) where you participate in the profits of the life insurance company while Non-participating(WLNP with low premiums) which does not. Both provides protection all the way up to age 100.

WLPP = Term+Dividend. Comparing the data of average FD rates with average dividend payout over the last 25 years, they are almost similar with dividends being slightly higher. Top insurers in the industry will almost always outperform FD rates. Cater to those with slightly higher budget.

WLNP = Term+Savings. Similar to putting your money in the savings account of the bank. Cater to those with lower budget.

3: Term products. The basis of all insurance products. Pure Protection with zero returns which offers insurance protection for a limited period only, in most cases up to age 60-65. Nowadays you also have Return of Premium Term insurance, which you still get back some part of your money. The closest you can get to FREE insurance.

Insurance coverage is a highly personal decision. Some people simply want a basic, affordable term life policy and for others, it doesn't fit their situation, needs or budget.

If you are sure that you can put aside money consistently in the bank for 15 to 20 years without even having the slight urge to spend some of it then yea by all means get a pure term. But if you think that you wont have enough willpower to do it, then get a whole life and insurers will help you put aside that money.

I beg to differ, you do not pay double the commission and fees. As stated in an earlier post of mine about ILP. You pay for a 2 in 1 product. You pay almost the same fees when you buy a Term + Unit Trust, the cost of the 'convenience' factor involved differs from each Insurer. Some may charge more, some may charge less but nonetheless it should not even come close to being double.

For illustration purposes, ILP cater to those people that like to shop at 7-11, 'convenience'. Do you pay double the price compared to shopping at Giant? Definitely not, but yes you do pay slightly higher.

1. Yes ILP has a higher commission overall compared to Unit Trust because you are basically buying a 2 in 1 product. If you would to add in top-up money, it would be the same as buying UT 5-7% upfront charges, 1-1.5% fund management charges. Etc.

2. I would be more than happy to show you some data, but sadly information like these are very sensitive and strictly confidential which are not supposed to be distributed.

But if you were to go to the bank negara website at www.bnm.gov.my, you can roughly gauge the average Interest rates of FD for the past 20 yrs is almost about the same as the average Inflation rate of around 4%. Banks are the ones that has always been earning the most of your money. Top insurers would mostly give higher dividends.

Gone are the days when Banks are just Banks, Insurers are only Insurers and Stock Brokers are just Brokers. Everyone wants a piece of the pie, everyone's trying to step over each other's boundaries.

Though you might not have a wife & children as dependents when you are still young, do not forget that you still have your aging parents. In most Asian countries, it is our culture to take care of our aging parents as how they took care of us when we were much younger.

Moreover, asian parents tend to pamper thier children more compared to those in the west. Most of the time, they would use whatever earnings they have and give them the best education, buy them a car, buy them a house and whatever that is left would most often not be enough for themselves.

For example, a college graduate at the age of say age 22 with parents aged 52 whom will be retiring in 3 more years say age 55.

They gave you the best education they could afford and also bought you a nice car for your graduation present since you're their only child whom they love so much.

When they retire at 55, they probably would have thier own retirement savings and EPF to last them for say another 10 years which is fair enough considering research shows that 70-80% retirees spend off all thier EPF monies in less than 3 years. They probably would hope that thier beloved son would at least help take care of them when they retire.

1st scenario: Something happens to thier only child, he died of an accident. According to statistics, the age bracket with the highest rate of accidental death is between 18-26.

What are the parents to do? Not counting the emotional impact, they would have suffered a financial lost as well. If they have already retired, they would most probably be force to come out to work again if anyone is willing to hire them. Fine they would still be able to survive, but another problem comes in when they live too long. Would that 10 years worth of savings be sufficient? In Malaysia, there are not many retirement provisions for NGOs. Who is to take care of them?

2nd scenario: Accident happened, but instead of death, you sufferent total and permanent disability.

This one is worst of, instead of just a financial lost it also became an extra financial burden to take care of him. You probably have socso and some group insurance your company provides and they pay you say 100k and maybe 500 a month income for the rest of your life. The average lifespan of a male is up to 70-75, so that's roughly 50 more years to go. Do you think the 100k and 500 a month is enough? Do you think 200k and 1k a month is enough? How much is the cost of taking care of a disabled person? Cheaper? Higher? That is up to you to decide.

So if you love your parents as they have loved you and would like to care for them and ease thier burden if anything were to happen to you, then get yourself proctected. Go for moderate-high protection. Then as you grow older with your own family, go for high protection with some form of savings & accumulation for retirement. When you are retired, a bit of protection with good medical coverage is recommended.

Insurance is a like a double edge sword, people complain they lose so much money paying premiums, but when something happens to them they regret that they did not buy more in the first place. My advice? Buy some be it PA, Life or Medical with whatever you can afford.

I disagree with your opinion that when you're a retiree or if you're a home maker you do not need life insurance.

To explain why, we first need to understand what are some of the cost involved after a person's death. Bear in mind these will be NEW expenses incurred by your loved ones at death.

Medical & Hospital Expenses - Still need to pay the hospital when you die or they dont give you the corpse, no pun intended. Can be covered by medical insurance if you've bought any when you're younger and healthy. What if you dont have medical insurance because you have no income and lasped the policy because you dont feel its worth it as premium gets higher and higher due to age. So who pays the bill?

Funeral expenses - Relating this to asian culture especially the chinese, how much do you think this would cost? Go check out the packages they offer at Nirwana Memorial and you'll know what I mean. So who pays for it?

Probate Court costs & Lawyer fees - If you have watch any HK chinese dramas, then you'll know that when a rich person dies often the siblings, stepmothers and the long lost illegitimate child comes out of nowhere and all fight over the inheritance? So yea, there are some cost involved when getting a probate from the court as well as hiring lawyers and such to settled things. And yes who pays for it?

Taxes - Surprise! Yes, here comes the goverment to come and collect taxes when you die! Yes, you do get taxed even at your death! Omg more to pay?

Debts - Ranges from credit card balances, mortage loan, car loans, education loans, outstanding bills, the mahjong money your wife owes the neighbour. Etc. May or may not apply to some. Do I really have to pay?

Child/Home Care Fund - This one relates to a home maker, meaning husband works while wife stays at home cook, wash, clean, fetch kids to school and back assuming you don't have a maid. So who will replace your wife's child care and housekeeping services? your mother? relatives? a new wife?? Most would solve this by hiring a maid and yes more cost! Want a pretty Filipino maid instead of an Indonesian one? Surely, just have to pay more.

Alright now down to business, so really who pays?

If you're a retiree, most probably it will come from your own coffers, the hard earn retirement savings that you and your wife kept all this while to enjoy life till death do us part. If this savings happen to be for both of you, then the cost involved will be deducted from it, meaning less for your wife. If it is a separate retirement savings, then great, you can use your part of it to pay it all off and if there's still any extra it will be for your wife, children and grandchildren etc.

What if there's not enough left? Then the children will have to bear the cost. What if they themselves are financially tight too? Grandchildren preparing go overseas, need money study, etc. Cut cost? 'CinCai' bury anywhere la, as long as cheap? Is that what you want? I'd prefer to be burned and ashes spread into the sea or maybe shot out into space, think i got the idea from a movie.

If you're a home maker, then most probably your spouse would have to bear the new cost above. These are all immediate cash needs, so unless you have saved up a good amount of emergency fund to cover all these immediate expenses without having to put you into more debt while still maintaining your family's current standard of living, then great for you. What if you dont have that emergency fund and do not want to borrow? You would have to sell your assets, liquid assets that you have like FD, Shares, Unit Trust etc. I only mention liquid assets because your property cannot be liquidified easily and therefore is not a good solution. If you choose to sell assets, you're already at the losing end.

A simple life insurance coverage could potentially solve all the above problems easily without affecting your financials drastically.

Does retirees or home makers need life insurance? That is up to you to decide. Personally, i think the only person in this world that doesn't need life insurance is God himself. Why? If you're a christian then you'll know that God himself is also selling insurance! Yea, he sells an insurance called eternity insurance.

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.

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?

Most singles don't really have much savings, so you're not the only one my friend.

As to the opinion of buying as little insurance, that is a Highly Personal Decision and definitely NOT any rule of thumb.

Cause at the end of the day, if something unforeseen were to befall you, and you bought as little insurance as you could, who will suffer? You or the person who told you to buy as little as possible. Will he be willing to give you the money to pay for your expenses or will it be the insurance company?

If I were to offer you Free Insurance, would you want to have as much insurance as possible? Definitely, right? But the fact is Insurance is also a business, and we do not ask you to pay exorbitant amounts of money and then give you peanuts coverage. Instead, we take only a fraction and give you a greater amount of coverage than you yourself normally wouldn't be able to afford or have.

All I'm saying here is to purchase based on what You yourself feel that You Need and can Afford. Who is to say that it is wrong to spend 10-15% of your salary on insurance? As long as you feel you want it and can afford it. Some people whom do not believe would probably tell you that, on the other hand some whom have seen the great benefits of it would tell you otherwise.

When you yourself feel that whatever you have is good enough for you, then you can have peace of mind and not worry about the consequences of an unforseen situation. There's also a fine line between what You Want and what you Need. You might want that BMW but do you actually need it? But you insist on getting it because it is what you want.

Situations does change over time, and yes you can upgrade it or purchase a new policy. That is why a good agent will help you realise that and explain to you the details to make sure you understand, they will service you for life and be a lifelong friend.

This post has been edited by Zarth: Dec 12 2006, 11:40 AM

Actually to most people they CAN actually afford it, but instead of spending it on the things they need, they focus on the things they want.

Some of those things that they want are like the shopping sprees, cigarettes, alcohol, etc. Do they actually really need it? Can they do without it? The decision is thier choice, no commitments, full of freedom etc. So they spend off all thier money and left with nothing to save at the end of the month.

Then there are some which are smarter, they save first before they spend. So at least it helps to control their own spending a bit. So they save save save, and after 3 months, since they felt that they have been good boys n girls and decided maybe a reward would be good for themselves and just that there's this nice watch, handbag, dress, shoe, or that ps2 your friend just bought which you just need to have it because he keeps telling you how much fun he's having. So yeah, the end up spending off what they have saved. This we called it delayed spending, not really saving.

Then there are those which are the most dicipline. Save every month, for years and manages their financials well enough. Do not overspend in anything at all. Saves as much as he can on all things and make sure he doesn't overtip the waitress or even leave any tips at all. So after a few years 3-4 perhaps, so he has a sizeable amount of money, and since he's planning to get married, buy a house etc. where will the money come from? The savings of course. So what happens then? Back to square one again and start saving again because they plan to have a baby and which is great and the cycle continues. This is much better than delayed spending and its called goals saving.

So which group do you think most single young graduates belong to? 1st, 2nd or 3rd? I would think either 1st or 2nd mostly, and If there was a product that could give them good PROTECTION, actually help and discipline them to SAVE and also INVEST it at the same time with the help of professional fund managers with ONLY that 10-15% of thier monthly income, do you think that they can afford it? Can you show me any other better way to teach them how to save, give them the protection they need and also help them invest at the same time?

Those in the 3rd group with better financial knowledge would even benefit greater from such a product since they already know how to manage it.

Would you be interested in such a product? Do you know which product that is? Take a guess, it has been explained before in the earlier posts.

The reason why such a product exist is because, the market wants its, the trends are changing.

During our grandfather's day they save money, accumulate it, then only invest it.

In our father's day its the reverse, they invest first, then accumulate, then only save for retirement.

In this new generation, we Save, we Accumulate and We invest All at the Same Time.

As I said earlier, banks are not just banks nowadays, insurers are not just insurers anymore, brokers are not just brokers. They are all fighting to get the bigger piece of the pie. Everyone is stepping over each other's line of business. If you have a choice, would you stick to the old conventional ways? or be willing to move forward and embrace the new trends in the industry? That choice is up to you.

1. Yes, the newer product I was referring to are the investment linked products, an alternative to traditional whole life products which offers higher rewards/risks. So yes you can get protection, save, invest and accumulate all in one account. It also offers you great flexibilities of withdrawals, top-ups, fund switches, auto-fund rebalancing, disability, critical illness, medical coverage, etc. etc.

2. A research shows that, for every 100 people who started thier career at the age of 21, the following situation exists at the age of 60 when they retire:

0 - 10 are dead
1 - 40 have monthly income under RM1k
2 - 40 have monthly income between RM1k-2k
3 - 10 have monthly income over 2k (consider financially free)

From the above, I only categorized them into the 3 groups I mention in my earlier post. So from your description of the 4th group, they would be among the 10 that has over 2k monthly retirement income. So how many among the 10 would you think is among the 4th group? 1? maybe 0? How many billionaires are out there? Why do most people fall into the 1st and 2nd group? Is it because they are stupid? or is it because they lack the financial knowledge that those in the 3rd group have? Do you think that they do not want to be at least in the 3rd group?

If there is a systematic way of helping it them reach the 3rd group wouldn't that be great? If you are among the ones in the 4th group, I congratulate you, you are well on your way to being rich if no illnesses, no accidents or anything unexpected were to happen to you or else you might be in group 0. Any of us might end up in group 0 for that matter. Do you think that if you recommend to someone in the 1st or 2nd group a product that suites someone in the 4th group, they would be able to automatically reach the 3rd group? no changes maybe? or worse? Or do you think a product that is specifically tailored to help them would work better?

What it is that separates group 3 and 4 from the rest? There are many factors involved but the one greatest factor of them all, is the 'Lack of Discipline'. How many products out there can actually help you conquer that factor and ensure you are well on your way to financial freedom? Ask yourself that question and see if the product insurers offer you today can be a solution to your problem.

3. Those who have bought Unit Trust before, ask yourself for the past 5 years. How much monthly contributions have you made into your unit trust? Did you do it consistently? Did you find it difficult to put money aside? Did you practice fund switches? Did you manage to switch in time?

If I can show you a product which is actually cheaper (0-5% upfront charges as compared to 5-7% of what most unit trust companies charge), which also means funds can be moved around without losing value, helps auto balances your funds, offers you a wide range of diversified investments options from local to international with great consistent performance, managed by a world's top 6 asset management company with AUM of USD 638 billion, an option that disciplines you to put aside money monthly, and also offer you life protection in case of death and tpd, would you be interested?

Hi, let me offer you an alternative point of view.

You are right, the reason why a college education fund which cost RM100,000 p.a. today might cost you RM300,000 p.a. in 20 years time is because of this evil money virus called Inflation. Its an unstoppable virus and wheather you like it or not, its gonna eat into your money more and more each day if you keep your money under your pillow or stay ignorant of it.

To answer your question, first ask yourself that if your child is NOW 18, and he/she is a brilliant kid and would like to study medicine in the U.K. Would you have the money to support it? If yes, great but chances are you probably don't. Well lucky you, you aren't even married yet and don't even have a kid yet. So say you already have plans to get married this year and have a child the following year, and roughly 20 years from this day you would be ask the same question again. But this time around 20 years later, more prepared and matured, would you have given a different answer?

Given a choice would prefer to start saving now? If your target is around $300k in 20 years time, you will need to save around $422.47 a month starting now assuming you earn a 10% compounding interest. Or say you wait another 10 more years down the road before you save, then you would have to put aside $1508.64 a month to reach your target assuming the same interest earned. Or right nevermind, I'll just refinance the house then and take a 300k loan. That'll be $2281 monthly repayments for 20 years using 6.75% BLR which comes out to the total of $547,440 total with additional interest of $247,440. Which option do you prefer?

My advice is to start saving now, however much you can save, put it aside, preferable in an investment vehicle which offers you above average returns depending on your risk preference.

One of the better vehicles out there which helps you save systematically is insurance. For education, its usually traditional endowment plans which offers lower life coverage with higher cash value, dividends and bonuses at the end of the term. Or you can opt of investment-linked education accounts and customize it so that you get a lower life coverage, higher investment portion. Then you get to choose which funds your money can be invested into based on the company's portfolio of funds.

The best thing about using insurance as the education fund vehicle is that they offer payor's benefits in addition to life coverage for the child. Which means that if the payor died, suffered disability or is struck by critical illnesses, the premium for the plan is waived off until the maturity period. This ensures that the child enjoys a guaranteed education fund upon maturity should anything were to happen to the payor.

Think about it and decide which point of view best suites you.

Check with Public Mutual and you'll see that they charge 5-7% upfront charges together along with 1.5% annual management fees on thier funds.

Most of the underlying funds has been performing consistently above their respective benchmark levels with some funds having inception dates as far back as 15 years to 5 years being more recent ones.

PM me if you would like to know more.

A) Most people would get confuse in this area. Normally for a investment link product, most companies would package it together with a medical card coverage. Hence some would deem life insurance is inclusive of medical insurance as well. However, it is true that they are both separate products that can be purchase separately. Again, the convenience factor comes in, when the client wants a plan with some investment and medical coverage put together.

B) Suprisingly, many people do not have savings except for thier insurance savings. Why? Because its money that they cannot see easily. Even if they don't buy insurance, they wouldn't have any savings anyhow and probably just spend it on unnecessary things. However, from my personal experience, many people start to save after purchasing insurance. Why? because someone is there to guide and help them monitor thier finances, someone manage to convince you to save first instead of spend first, someone that tells you to save 3 months salary for emergency uses, etc. etc.

So should you buy insurance first before some savings? or savings first and later insurance? Should you start your car engine first before wearing the seatbelt? or wear seatbelt first before starting your car engine? What if your car lunge forward when starting and you didnt wear your seatbelt and you hit your head on the windscreen? Its up to you to decide which way you wanna do things, maybe you wanted to buy an airbag the day before or just wanna save up enough first for the stereo and airbag then only buy both. Its up to you. Which is more important? Your Life? or the 3 months savings that you can probably still take your time to save up at your own pace because you do not expect any big changes to your career. You can decide to take your time on the things you can control, but can you afford to be slow on the things that might happen anytime and is out of your control?

C) Withdrawing cash from an investment-linked insurance account is similar to that of withdrawing from a unit trust account and is subjected to a minimal withdrawal and not exceeding the maximum cash value. Any huge penalty? 0% Charges. Takes too long? 3-5 working days. How the hell to do it? A phonecall to your agent and a signed form.

Let me give you some examples of what are the cash needs involved when someone with No Dependent Dies. Cash needs simply means extra cost incurred in which you normally would not have to bear.

Medical & Hospital Expenses - If you are hospitalized a few days before you die, How much will it cost? 1k? 2k? 3k? Who will pay the bills? Your gf? Your parents? Your savings? If you have medical insurance coverage, great, if Not would the payout from life insurance be able to help you cover the cost?

Funeral expenses - I dont know about the paper BMW and paper maids but, do you know a coffin could cost up to 8k nowadays? Would it be fair for me to say maybe you need around 10k? 15k? 20k? Who pays the cost? Since there isnt a funeral insurance, would the payout from life insurance be able to help you cover the cost?

Debts - Car is not a dependent? Very true, but still need to pay off the car loan after you die? Of course! Independent Young Exec, just bought new Honda Civic, and took up 100k loan? Can settle easy, just sell it la. Great! you try to sell, can get back how much? 70k? 80k? Enough to cover the loan? Great! if not short 10k? 20k? 30k? who pays for it? Parents take out retirement fund, settle the loan.

Home Loan?
Young executive whom is single succesful and just bought a new apartment, took a 300k home loan? Who was the guarantor? Parents? Did you get an mrta with the home loan? If yes, Congrats. If no? What happens? Help to pay loan? Try to sell? Can sell it fast enough? Get good price? Bank take back? Auction it? Managed to cover half the loan, the other half still need pay? Parents take out retirement fund, settle the loan.

I can go on with more examples..Education Loan? Credit Card Bills? Phone Bills? Utility Bills? Saman Bills? Personal Loans, Ah Long Loans, etc. etc.

Will his/her death affect anyone? No one? Think before deciding. Is there a point in having some life insurance? No? Yes? Assess your own situation and decide.

For example, say you have RM300 to spare and we compare a situation with life insurance and one without.

Case 1: RM150 goes into Life Insurance with medical coverage and disabilty income, You still give RM100 to your parents and RM50 you save monthly.

Case 2: RM50 you only buy disability and medical insurance, RM150 you save yourself, and you give RM100 to your parents.

Situation 1: After 1 year you met an accident and died 2 days later at the hospital.

Case 1: You would have RM600 in your savings, gave RM1200 to your parents and the medical card covers hospital expenses while the Life Insurance policy gives your parents 100k of which 50k is used to settle all the cash needs with 50k extra so supplement thier retirement and help ease the emotional lost of thier beloved child.

Case 2: You would have RM1800 in your savings, gave RM1200 to your parents and the medical card covers the medical cost incurred. Your parents forked out a negative 50k from retirement fund to settle all the cash needs with additional burden and nothing to ease the emotional lost of thier beloved child. Sure they'll still survive.

One might not have immediate dependents, but do not forget that everyone in this world has a family be it a father, mother, brother, sister, grandma, grandpa, etc. You might not need to take care of them financially when you are alive, but do you think they would need to take care of your financials when you are no longer around? Even though it might not affect the financials of a family drastically, but a study has shown that life insurance payout will always help ease the emotional lost of someone you love. Some do it out of love, some do it out of responsibility, some is just for peace of mind. No matter the reason, I truly believe that there is no one person in this world that would not benefit from purchasing life insurance.

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.

I can fully understand your viewpoint. Some people work hard all thier lives just to give the best of everything to thier family, most work hard just so they could make a good living and make sure the family is quite well off, while some selected few actually think more about themselves which I don't blame at all, who's to take care of you if its not the younger you now. Either way, insurance in a way can help those 3 different types of people in different ways.

Yes, both of the methods are just looking at the same thing from different angles. I always ask which method they prefer and most would choose the simpler method of just using gross income, while only some actually want the full breakdown and details involved in the income & disability expenses analysis.

I congratulate you for being the few that actually have such great self-discipline. Living with only 25% of your income for over 10+ years and saving the rest is really a commendable act. I'm sure you've already achieve financial freedom by now and living a good semi-retirement life if you wanted to. A perfect example of a save and create wealth approach.

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.

A) Best place to put your emergency cash. If its a sizable amount, might consider breaking it up to a few different banks. For example, you have 20k, instead of putting it all in one bank one account, consider dividing it into 4 portions of 5k each and puttitng it in separate bank accounts. Helps when you might not need to withdraw all so that the rest can still enjoy the interest.

B) Does risk even come into the picture at all when it is spelled out to be Guaranteed in the contract? (Unless World War 4 falls under the unknown risk part) and on top of that, my plan pays you RM200,000 cash if you decided to go on a long vacation and not come back. How much do you get for selling off the stock on the open market? You'll be very lucky if your family actually gets to sell it off before it gets frozen for 6 months to 1 year or longer still while waiting for the court to decide who gets what. Can there even be a comparison of which is better?

All I'm saying is go ahead, continue to invest in your shares, invest in your properties, invest in unit trust and all sorts of other investments that you can actually monitor and control. However, for things that are out of your control, consider a life insurance policy to cover the unexpected situations.