dr2k3,

<<what i mean is that if those 5-6k(yearly) are tax (must goto government pocket) might as well buy insurance for "protection"?>>

This is TAX RELIEF. It reduces your taxable income. The following number is in annual aka yearly.

So, let say you earn 60K and you buy 6K premium worth of insurance. Your taxable income is reduced by 6K. You ONLY save 13% of 6K = RM780.

So, why spend 6K on insurance just to save RM780 in tax?

Tax savings from insurance is another bunch of BS used by insurance agent. Do not get conned. Know how to calculate.

Insurance agent never bother to tell you the whole story.

Dreamer

hah~ stupid me...i got it now ~_~

TAXABLE INCOME is reduced by 6k....not reduce the amount i pay

u just killed the only reason that i might consider to buy an insurance X_X

This post has been edited by dr2k3: Apr 7 2008, 09:59 PM

It's the same as some ppl claiming for own business buy car can save income tax...
But in the first place, do you really need to spend that money in order to save?!......

If one does need to spend money to save than logically speaking, it's not saving....no?!

Insurance = yes

But ur agent must be reliable one la. means he/she is able to assist in claims etc.

just take my advice..

i work in company A. got medical card & insurance for employee. no worry bout major disease.
then got kick from company A.
what happened if i don't have any health insurance? and i got major disease?
so better have one than never.

But well, u still need to buy insurance as protection.

If not, touch wood, if anything happen, u might need to claim 5k for medical u paid while u are in hospital...

Wah.. the only reason to buy insurance is to lari tax ar? Not for protection ar?

For a self employed, it may not be feasible.

But for those who are working/ employed, isn't it one form that we can have tax relief? RM780 is quite a big figure to think about also. Spend as in what? We are spending in term of our protection with in the meantime get a tax relief. Same goes as I step into MPH and buy myself some books and get tax relief from it. I get the product and also the tax relief.

What other things i can get from tax relief?

hamster9,

1) Spending RM87 to save RM13 is not a smart decision.

2) Oops. I forgot. You are another insurance agent.

3) For a person earning 60K per year, there is very little reason to spend all the way to RM6K on insurance annually.

Dreamer

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Added on April 8, 2008, 7:09 pmiluvena,

If you got laid off from a company and you have NO SAVINGS, you will starve to death first before you get sick. You are MORE LIKELY to lose your job than get sick or major disease. Why you ARE NOT insured against that by having EMERGENCY FUND?? The reason why NOBODY advice you on that is because they get NO COMMISSION for giving out this advice.

We seen ENOUGH people that OVERSPEND on insurance until they have NO SAVINGS.

Dreamer

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Added on April 8, 2008, 7:15 pmg00glesYYl,

If a person is earning RM60K per year, it is FINANCIALLY STUPID for a person to buy medical insurance that PAY RM5K.

Financially, the person need to have 15K to 30K in the bank for emergency fund. So, he is covered for any emergency up to 30K. If not. the person will go to hell if he lose his job for a while.

The person will either

A) Buy ONLY Critical illness insurance cover up to 200K

B) buy no medical insurance because it is not worth the effort.

You ONLY buy insurance to cover RISK that present a SERIOUS financial problem for you. This is why you do not buy life insurance for your children.

Dreamer

This post has been edited by dreamer101: Apr 8 2008, 07:15 PM

How much are you paying per mth/quarter/annual? I personally think that one should really have the medical card, hospitalisation fees of these days are really expensive. Like myself, I am always healthy then suddenly didn't know what happen, got admitted and spent more than 5K in the hospital. Lucky I have my medical card to cover that. Although you won't be getting what you've paid, but at least it's a form of guarantee in case there's anything *touchwood*

Im juz wondering how come u guys didnt includ EPF contribution into tax relief. COMBINE EPF and LIFE INSURANCE is 6000 MAX.

bafukie,

1) I do not know since I do not need to buy insurance for my whole life.

2) So, essentially, if a person is earning 60K per year, his EPF will used up all the tax relief and life insurance will enjoy no tax relief.

3) It is NOT in the insurance agent's best interest to tell and educate you.

Dreamer

Do you have any suggestion what is the alternative for Insurance? For a fresh graduate like me. Thanks

This post has been edited by kockroach: Apr 8 2008, 09:29 PM

kockroach,

1) I did not have to BUY insurance. My job has extensive life, medical, disability insurance included.

2) I save 50% of my gross income. So, at certain stage, I am self-insured.

3) The problem I have is insurance is only worthwhile for me if the coverage far far above 200K. But, those insurance premium is so high that it is not worth the money.


Do not misunderstand me. I do not say people should not buy insurance. But, the problem is

A) People overspend on insurance until they have NO SAVINGS.

B) People buying WRONG KIND of insurance with WRONG coverage.

C) Insurance agents only interested in SELLING as opposed to EDUCATING people on the right kind and right amount of insurance to buy.

For example, why buy life insurance on children?? They generate NO INCOME. Their death represent minimal NEGATIVE financial impact. You MAY BUY medical insurance if you have NO COVERAGE from your job and you can get a good deal.

Why buy medical insurance that cover up to 30K if you have 100K in the bank?

Insurance is for RISK MANAGEMENT. You only buy it to protect

1) Things that are likely to happen.

2) Things that have HIGH FINANCIAL IMPACT to you

For young people, the worst case FINANCIAL disaster is disability aka you cannot work. But, you could cover this via Personal Accident or Disability protection. So, which one more likely to happen and which one give you the best deal (premium versus coverage)?

I started an insurance thread but too few insurance agent is willing to educate as opposed to selling.

People SPEND A LOT of money on insurance but SPEND TOO LITTLE time in studying about this subject. So, they lose a lot of money unnecessary in the process.

Dreamer

Dear dreamer,

IMHO, I do think that life insurance is essential for low income individual. Why? Not everyone have savings at the end of the day to pay for any expenses caused by critical illness or suddenly sei 9 jor. Paying a little bit off their monthly income would result in saving their family a lot of headache if anything happens in the future.

Perhaps, for people like yourself who can manage money well would not have headache when anything happens to you, but not everyone is as lucky to have a good income.

Running away from tax may seem like a lame excuse for certain people, but it serves as a yearly discount for some low income people and it means a lot for them.

People are asking for opinion whether it is necessary to buy an insurance. There are people from different background who may or may not need insurance. Try to put yourself in their shoes instead of speaking from your opinion.

P/S : I'm not an insurance agent. I'm just an analyst.

Cheers!
susuteng

suiteng,

1) Define what you mean by low income.

2) Define what do you mean by <<Paying a little bit off their monthly income>>

<<to pay for any expenses caused by critical illness or suddenly sei 9 jor.>>

3) Which is a lower risk than starving to death when you are lower income.

Let's have some common sense here. If you are lower income, you are MORE LIKELY to lose your job and starve to death than anything else. Insurance does not help you in dealing with that. Emergency fund and saving does.

If you are NOT PROTECTED from MORE LIKELY RISK (aka lose your job and income ) and MORE PROTECTION (savings can be used for anything), you buy insurance to protect from LESS LIKELY event (death and critical illness).

Plus,

A) You are so poor that your life does not worth that much.

B) You are so poor that you cannot buy enough critical illness insurance to handle any critical illness.

Have you ever been REALLY POOR aka STARVING to begin with?

If you are lower income, make sure that you save money first. Then, maybe buy a little bit of medical insurance. Then, life insurance. That makes more sense.

In summary, if you have NO SAVINGS, you have NO BUSINESS buying insurance. Saving is your first level of insurance.

Dreamer

1. i m glad tht i m at lower risk for Lost of job n income.
2. emergency fund is must,save 1st.
3. pls insure for More likely risk ( name it, u should know ur lifestyle n ur job n ur risk, if u don know, better find out).
4. pls insure for Less likely but High damage risk only with low premium (aka the total premium u pay in the next 50yrs is less than 1/3 of the insured amount), if not, don bother.

@bolded
Finally you are able define what I'm trying to say.

In summary, if you have low income and you have no protection, no savings, nothing, nobody gonna pay for your bills if you're sick. It also means if you sei 9 jor nobody gonna support your family.

But if you have low income and 30% goes to insurance and only 10% of savings per month; imagine there's one day you cannot afford to pay the 30% insurance fees when financial disaster hits. I.e. you loose your savings and insurance once and for all. That's what Dreamer is trying to educate certain naive ppl here about insurance over gearing.

But anyway I do think that medical card is a must nowadays. But than again, if company is paying for the medical expenses; does one really need medical card in the first place and pay the yearly premium?!
I have to disagree with Dreamer's idea on RM100k savings: <<<Why buy medical insurance that cover up to 30K if you have 100K in the bank?>>>
The problem nowadays is hospitalisation looks at money first and medical card is an effective way in emergency situation whereby not everyone is holding RM5k cash as hospital deposit. Credit card might be a good choice but than again it would be a hassle to go and withdraw money from the banks to pay bills incurred.
It's how much you value the expected emergency and calculating the premium so that it wouldn't burden one's expenses and commitments.

b00n,

<< I have to disagree with Dreamer's idea on RM100k savings: <<<Why buy medical insurance that cover up to 30K if you have 100K in the bank?>>> >>>


1) If you have 100K in the bank, you have a credit card. You can pay by credit card.

<<t's how much you value the expected emergency and calculating the premium so that it wouldn't burden one's expenses and commitments.>>

2) It is not worth the effort to claim insurance for small amount.

And,

3) The premium to insure for 200K and above is too much and not likely to happen.

Dreamer