Here's a 'simple' method to use.

To know if you're over insured or not just ask yourself these questions:

1. If you're disabled today and can no longer work, how much income do you want to have per year and for how many years?

2. If you have dependents, how much money would they need to survive if you're no longer around, and for how many years?

Then check the amount you want with what total liquid assets - liabilities you have and add an additional 50% of your current annual income for your last expenses which includes funeral expense & taxes to be paid.

Why only liquid assets? You still need a house to stay in when disabled and so does your family if you're no longer around.

Add it all up and that's the figure you should be looking at.

If you want a full personal financial review which is much more detailed, feel free to drop me a pm.

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As the financial knowledge among consumers grow in Malaysia, financial institutions are also coming up with better, more sophisticated products to meet the customer's need.

Newer Insurance plans can now act as an Emergency Fund, namely because:

1. Faster cash value built up.
Traditional plans normally has cash value built up after the 3rd year, where as newer plans starts off in the 1st year itself.

2. Flexibility of withdrawals and top up.
Liquidity is there as withdrawals can be made and money received within a week. Alternatively, you can top up money into the account to enjoy higher interest than a normal bank savings account.

3. Higher transparency.
You can see exactly how much is being deducted for the cost of insurance and how much goes into the savings.

You want to know if getting a term and saving the rest in FD is better versus a protection/savings plan? I'd be more than happy to show you.

Best Regards.