how u all see about insurance?is it important?

Nope, if you have large amount of money set aside for emergencies.

There're many types of insurance in the market, which one are you referring to?

medical card....accident d?

SCENARIO A (ACCIDENTS/ permanent disability INSURANCE)
imagine like this, u got an accident... touchwood.
u not dead ... phew. BUT you are paralysed from waist to leg. Doctors have classified u having permanent disability. u are not eligible to work anymore.

1) what going to happen to ur earning ability ?
U earn RM 2 K a month. RM 24 K a year. who going to pay u for the next ten years ? thats a total of RM 24 K x 10 years = RM 240 K. Dun forget the inflation.
2) if u dun have more income coming, who going to pay for ur expenses ?

SCENARIO B (MEDICAL INSURANCE)
U were involved in accidents or u need to do operations. to reconnect ur hand or ur legs. who going to pay for the hospital bills (RM 10000) ?

If it happen in the midnight around 2am. Where you going to get that much of money ? Bank ?

Think man.

This post has been edited by wingcross: Apr 4 2008, 04:28 PM

so...it is very important lo?then...u think d money will waste ma?
is it expensive?

theres quite a lot of this insurance discussion here, u could try searching for it.

whre discuss about insuran,i cant find anything?

I differ here.

SCENARIO A (ACCIDENTS/ permanent disability INSURANCE)
imagine like this, u got an accident... touchwood.
u not dead ... phew. BUT you are paralysed from waist to leg. Doctors have classified u having permanent disability. u are not eligible to work anymore.

1) what going to happen to ur earning ability ?
U earn RM 2 K a month. RM 24 K a year. who going to pay u for the next ten years ? thats a total of RM 24 K x 10 years = RM 240 K. Dun forget the inflation.
2) if u dun have more income coming, who going to pay for ur expenses ?

IF you have interest/ investment income of 24K per year, you do not need to worry for this.

SCENARIO B (MEDICAL INSURANCE)
U were involved in accidents or u need to do operations. to reconnect ur hand or ur legs. who going to pay for the hospital bills (RM 10000) ?

Yes, if you have 100-200k standby funds, you do not need to worry for this.

If it happen in the midnight around 2am. Where you going to get that much of money ? Bank ?

Yes, credit card cash advance/ ATM and you can withdraw the day after.

Another penny for your thoughts?

You answer is the typical solicitating that normally insurance agent use to sell their products.
What they fail to see is that as your net worth increase, with a substantial amount of liquid cash, one do not need much insurance.

The whole idea of insurance planning is just a subset of your overall financial planning, not everything.

This post has been edited by Dyong: Apr 4 2008, 04:56 PM

OK. It depends on what type of insurance & your individual case. No right or wrong here but depends on your individual needs.

To me, insurance is for protection and talking about life insurance, I don't like plans like those investment-link plan. It just makes newbie confused with the whole issue. Insurnce companies package it this way so most people gets confused!! Buy insurance for protection (whether u need or not only u yourself can tell) and invest the money yourself in whatever instrument u feel comfortable with.

If u refer car insurance, of course u need minimum 3rd party; othwerwise cannot renew road tax. Of course most people buy comprehensive insurance in view of the high stolen car rates.

Then there is professional indemnity insurance, MRTA, house insurance, etc......

Cheers...

I have life insurance (investment type) + Medical card.
RM200/month.

Cant do much with just RM200/month if i'd wan to keep it useless in bank.

I think it is important to have an insurance with medical coverage.

I totally agree with Dyong's words.

Insurance is damned important. I have 4 life policies which cover medical and PA. You must have at least one. My wife and daughter are also insured as well. We never now what would happen in future.

I personally think that medical card is. The medical fees of these days are so expensive. I was admitted for few days and that cost me more than 5K. Lucky I have my medical card to cover that or else

insurance is important only if u got wife and kids

WaCKy-Angel,

<<Cant do much with just RM200/month if i'd wan to keep it useless in bank.>>

This is BS statement. If you do not want RM200/month in the bank, everyone is willing to take it from you. If you loose your for a period of time, you will appreciate the RM200 per month.

Dreamer

u can try prudential prulink with the minimum rm150 per month and add up prusaver to make the bigger surrender value at the end...im doing this type of investment...

if can try to buy investment link types rather than traditional types...there may have major different btw those..so beware before taking any decision...

u need insurance in your finance portfolio if u have some responsibilities for urself or someone else.

u do not need insurance if u r a junky, has no responsibility whatsoever and can die without any effect to anyone and society.

many ppl said if you have a large sum of money set aside then u don't need insurance, this is another BIG MYTH !! Which is very wrong in a good financial planning attitude.

if u have a large money set aside, then u must be someone who do not manage ur money very well.

if u have a large money set aside, then you should use a small portion of it to buy insurance of equal amount, then the rest can be used for other purpose. that way, you have exactly the same amount of money set aside while having all the extra cash immediately.

if u worry the premium you paid and at the end nothing happen so you may lost all of it, then you should go for whole life insurance plan, because you are guaranteed to die one day, and that day someone you appointed WILL get the insurance money, both guarantee.

if u care about how much u urself get back, then get an endowment to force yourself saving.

hope this helps ...

---

Added on April 4, 2008, 11:13 pminsurance can also be used for yourself, ie. medical card, retirement plan or just force saving for ppl who has low self discipline.

if parents are still alive, one should start as early as possible for their parents health and medical fee. by statistic, more than 60% of 35-45 years old men got into financial problems because spending too much money on their parent's medical fee. the rest of the 40% .. their parent die almost instantly with just burial cost ...

insurance is extremely important in a good business and especially if the biz rely on a few key personels.

there are endless application for this little finance tool - insurance. so if one has the misconception it is only needed when u have a family, then all I can say, beware and prepare to pay more because the longer you start a plan, the more costly it gets and the less power of compounding will work for you ...

This post has been edited by mtsen: Apr 4 2008, 11:13 PM

u are not getting the whole pic.

kthxbye. go figure out

I just undergo an endoscopy surgery at assunta hospital.
Cost me around rm1.1k just for checking purpose.
Lucky my insurance covered.
Using GEL medical card here.

Well, different ppl have different thinking. If you think your financial status is way high safe and have a lot to spare if emergency happened, you may not buy.
If you think you are at moderate state and can't afford emergency payroll, why not pay few hundred bucks for an emergency fund (insurance).

Bare in mind also, there is some limit that you can claim from the insurance, particularly medical side. So better check it out before buying it. Yup, medical insurance somehow is quite essential nowadays due to sprilling up of medical cost. But buy appropriate insurance until you can afford, don't overbought insurance until you are not aware of especially for those with tight budget every month one.

Billionaires like Warrent Buffet and Bill Gates probably don't need insurance.
So may be that's true, insurance is not essential and necessary for those really really rich one. One month interest in the bank already worth millions, still want insurance to cover it?

INSURANCE fact

The rich doesnt need it, the poor longs for it

not who is entitle to get insurance...
actually everyone in here is required to get at least 1 protection.
u can get protection for your life, at the same time you are doing saving on it....

every 1 at here at least should bought 1 insurance for them.the basic should hav is medical card n 36 critical illness(cus for tis 1 is include life,accident n savings as well).all we noe tat medical fees is expensive de...we cant predict wen will happen to us y not we protect ourself b4 it happen...

Talk is easy as we know some insurance is somehow essential.
But in real life reality, things are not as simple as that when it comes to $$ term.

Really rich one doesn't need insurance, serve not much purposes anymore. Poor one, can't afford it, life is cruel sometimes, it is not a perfect world.
Insurance somehow better is a product that best suit for middle class people.

Insurance is needed when it suits ur protection need and ur budget, if it doesn't on either side, then u don need n can't have it.

Maybe they have their fingers insured for millions for the tiniest cut in their hand like Richard Clayderman. Or be like Jennifer Lopez who insured her butt for USD1 million(correction: USD 1 billion ). Probably Bill Gates would have to for his hands to sign cheques and type some geek coding


Why does the rich gets richer and the poor gets poorer? Even if they are rich, they still keep money in great value and to them, why not fork out say a few thousand to get oneself protected and skip paying the unnecessary bills? In the rich mind, everything is about profitability and feasibility. They are thrifty in their money, which is that's why they are rich.

Cases are many in London that wealthy people dies leaving a huge amount of assets and insurance money to their pets

I believe there are many products can be tailored in insurance accordingly to your budget. Just the matter of your luck with your insurance agent. In my case, I encountered 2 agents of the same company and one of them proposed me a higher insurance package which I couldn't dearly afford for my dad. Another agent showed me everything and asked how much I want to protect my dad for, do I need hospitalization allowences? etc etc until the price suit my liking.

This post has been edited by hamster9: Apr 6 2008, 10:08 AM

the actual use of insurance for (poor to middle class):
1) Protect their income.
2) Secure food on the table, shelter and clothes for their family.
3) Protect their hard earned money.
4) As a savings for retirement/child education

the actual use of insurance for (Upper and rich class):
1) Increase their business value
2) Provide a business continuation plan
3) Increase their assets

so, its on how we look at it... so if a person has responsibility (for himself and others) life insurance is a MUST! unless money is not the question.

This post has been edited by xeNOS: Apr 6 2008, 10:17 AM

lol...i'm just thinking to get buried or even cremated in Nirvana Memorial Park is already RM15K I wonder where to get such money after settling medical fees just like my late grandpa. Total cost already RM 30K inclusive of hospitalisation. I hate the insurance agent that only sold him the endowment plan and not medical card that we have to pay ourself the high medical fee from SJMC. To recover from our family revenue took us a long time.

Not really dude. Single also needs one PA insurance. We never know what might happen.

second that.single doesn't mean we are safe from accident

PA (if you have dependents) and medical insurance are good ideas.

but those endowment and investment linked one, you really gotta do your homework first. if you can make your money work for you better than them, then it's not needed.

Who ever said 'entitle to get insurance'??? im stating fact. The rich doesnt need insurance. They can afford to pay medical bills or watever bills that comes their way. Why wanna throw 30% of monthly payment to feed insurance agent when u can keep it and afford to pay in times of adversity.

agree with ya.....insurance is actually like ask them to keep ur money...if ur healthy all the way...u just give them free money

might as well put those money into investment

can you guranteed you gonna be healthy till the day you are not around . . .
end of the day what ever investment or savings you have made, you are just using it for your medical expenses

Colaboy,

The most reasonably priced medical insurance only cover up to about 200K. Above 200K, the premium increase exponentially because most Malaysians do not buy that level of insurance. So, if a person has at least 200K of emergency fund, the person is self insured. And, the fund cover all emergencies where medical insurance only cover medical.

Shopping for insurance is like shopping for anything else. It is worthwhile if you get MORE and BETTER protection than what you can do by yourself. Or else, you are throwing money away.

If you want to be a better insurance agent, do not give up those GENERAL INSURANCE BS. Start by giving people REAL INFORMATION so that people can make GOOD decision. For example, at what protection level, it is worthwhile to buy medical insurance. From what I know, it is 200K.

In advanced countries like USA, you can even get RISK level information so that you know at which age and what profile, what is the likelihood that you will spend X amount of money in Medical. So, why do people get coverage of 200K if the chances / risk level for their age is so low for them to get that kind of problem?? What if they are most likely to get injure from accident and PA coverage works better for them.

Most insurance agent that I come across is not even educated up to this level. Aka, at each age profile, what is the highest risk for each person and what coverage make sense. They just spill up BS like buy ALL the insurance that you can pay.

Dreamer

u've made a good point there dreamer101, tq for pointing out this so that v agents in the industry can do better

This post has been edited by xeNOS: Apr 6 2008, 10:42 PM

Dreamer101,

1st. . . there are not much people out there with 200K of emergency fund
even if they have 200k like some doctors or lawyer they still own a medical card which covered their medical

2nd . . . buying insurance is NOT like shopping, buying insurance is buy whatever you need & nessasary only
many factors need to take under consideration before buying an insurance such as nature or work, family, age,
budget / income & etc etc. It's not as simple as like you go to the mall & buy a loaf of bread.
if 1 who over insured, dont you thing it's a burden to him or his family
if 1 who under insured but touch wood something happens to him, is the insurance he bought will sufficient to help him

3rd . . "In advanced countries like USA, you can even get RISK level information so that you know at which age and what profile, what is the likelihood that you will spend X amount of money in Medical"

On an agent point of view, we can only advice people about the increasing of medical expenses day by day, we cant predict who & how much it gonna cost them when somethings happen. From what i know in some countries like UK & SG they have people with CFP- Certified Financial Planner, but the trend is still not in Malaysia cause many people still prefer not to "pay" for their profesional services

Lastly, i have to agree that many insurance agent only selling the "package - all in 1" stuff to the market
There are many products nowdays which serve different purpose . . .
Get a few opinion here & there before jumping into any conclusion

This post has been edited by Colaboy: Apr 6 2008, 11:48 PM

Colaboy,

<<2nd . . . buying insurance is NOT like shopping, buying insurance is buy whatever you need & nessasary only
many factors need to take under consideration before buying an insurance such as nature or work, family, age,
budget / income & etc etc. It's not as simple as like you go to the mall & buy a loaf of bread.>>

Which you did not provide any REAL INFORMATION to teach people on how to consider those factors. You just spill out more GENERAL INSURANCE BS.

<<On an agent point of view, we can only advice people about the increasing of medical expenses day by day, >>

Which is another GENERAL INSURANCE BS. Medical expenses can be cover by disability, PA, Medical insurance, and Critical illness insurance. There are factors involved depending on age, nature of work and so on what type of insurance make more sense to provide coverage for medical expenses.

As an insurance agent, at the minimum, you should know ENOUGH about your own products aka insurance to provide GOOD INFORMATION as what works under what circumstances. I am NOT ASKING you about anything else except insurance.

IMHO, most people are OVER-INSURED with the WRONG kind of insurance and UNDER-INSURED with the RIGHT kind of insurance.

Dreamer

dreamer, that day i was approaced by my friends who a GE insurance agent ...

he intend sell me a saving plan, said put in RM3.8k, 10 years later can take back money, 1 year return is 7%, so is this another BS investment ? means as u always said, why pay more komisen to insurance agent if i can buy those investment plan like PT myself ?

Normally, it is projected, not guaranteed, bare in mind.

clsiluf,

A) Rule of 72. So, if the return is 7%, in 10 years 72/7 ~ 10, that means the money should double to get 7%. So, at least you should get 7.6K.

B) Normally, it is projected aka not guaranteed.

C) Just think about this. In the last 2 years, the KLSE went up 15% to 30% per year. And, this investment only projected to return 7%.

D) The worst part of this is you have NO IDEA what you are buying. In UT, at least, you have prospectus to tell you in greater detail what is in the UT.

Let me just throw you a reverse question. Is this more or less risky than buying PBBank share now at RM11?? You get RM0.75 dividend which is around 6% to 7% dividend plus possibility of capital appreciation. And, you do not have to pay 1% to 2% annual fee and 5% to 7% front end load for domestic UT.

Dreamer

This post has been edited by dreamer101: Apr 7 2008, 09:26 AM

Using financial calculator u can calculate out the effective interest rate. And i can tell u one thing, 7% is gimnick. Insurance savings plan will NEVER go beyond 4% +/- p.a effectively.

This post has been edited by bafukie: Apr 7 2008, 10:07 AM

for me i think i will use up all my savings and investment just for the purpose of insurance payment than medical expenses

the chances of us being sick until need to use 200k is preety low (i can pretty sure say that my family....including my grandparent, relatives and friends non of them sick until so serious need to use 200k not even 5k for more than 20 years alredy) and not to mention quite some of the insurance i saw coverage kinda low...low until i dont bother to have one even~ low payment low coverage high payment high coverage

and sometimes insurance are too specific only cover certain thing and other dont cover(example) what if you buy 1 type of insurance then u urself involve in diff type of accident which is not cover by insurance company this kinda thing happen to often ( saw on the news )

the only good thing insurance is for tax purpose....instead of pay government with our hard earn money might as well buy insurance

be realistic....insurance company is created not for the benefit of us...if the chances of people get sick or accident until need 200k is so high insurance company would go bankrupt before any of us

please tell me what ganna happen to a guy if insurance only cover 200k and one day involve in 500k or more medical expenses for those with not much saving

This post has been edited by dr2k3: Apr 7 2008, 10:15 AM

the 4% interest is guranteed while another 3% is projection dividen . . . .
most of the savings plan in the market works that way

dr2k3,

1) Most people that make a lot of more money that has to worry about tax is not salary worker. For those people, they hire a good accountant and incorporated their business. Then, they do not have that much taxable profits.

2) For most salary workers and even for those that make 10K per month, the tax level in Malaysia is not high enough to be a problem.

Dreamer

---

Added on April 7, 2008, 10:27 amColaboy,

Why can't insurance agent just honestly tell us this upfront?? I am NOT talking about you. But, there is another insurance agent that BS about this 7% stuff all over this forum without telling people the WHOLE TRUTH.

Dreamer

This post has been edited by dreamer101: Apr 7 2008, 10:27 AM

erm.....for those with 4-5k per month = 48-60k

taxable income 11% or 12% or 13% i dont know....is like 4-7k alredy
if not wrong i saw in tax thingy form that 1 year u can deduct tax up to 5k or 4k with insurance

or am i wrong?

tax relief per year is 6k..if not mistaken...

6K, LHDN site has a complete chart various tax relief allowed.

http://www.hasil.org.my/melayu/bm_NO2_1_1E.asp

Dreamer101,

agreed but not all insurance agent are that way . . . but i can see alot are just stressing on the advantages
& not goin into details of the policy. Well there is something which protect the consumer called the "cooling period" which is 100% money back guranteed. After the policy is aproved within 14 days, if any doubt you might have consult your agent/maybe some other agent or op for a refund.

This post has been edited by Colaboy: Apr 7 2008, 11:24 AM

I agree not all, but there are high % of it. Most of them, just try to 'scare' people about 'what if xxx happens to you', then insurance wil protect you, rather than explain the details and scope of the particular insurance that customers need. Everyone needs for insurance is different which depends on individual situation. Just like a single person without any dependant, death is not primary factor to be insured on, but PA on permanent disability or medical is more important than death.
Even in this forum, there are plenty of posts like that before.

Just like previous post some forumers told him/her that it can yield 7%, but didn't state it is actually 4% + 3% (projected) as you said, then it is somehow mislead customers already without telling the truth and details behind.

Also, I bet not many people knew the 14 days cooling off period as well, a failure of insurance agents to explain properly and details to the customers.

Don't get me wrong, there are plenty of good agents like you in the market, just view out some experience on some bad agents that had approached me before as well as some agents that posting in this forum as well.

This post has been edited by cherroy: Apr 7 2008, 11:35 AM

and most funny + dulan is, when i said wanna leave and think first, he said if buy thie year end, the return interest might drop to 6%
which piss me off 100% ...

haih... c liao the response i very tak tahan...!

ok before i begin... being humble i don wan offend any1 in this topic k all i wan is just to clear doubts and shed some light abt this plan... if i had offended any of u guys reading this post... my apologies 1st ya

ok... to clear all the doubts here... before some ppl out there feel cheated and tarnishes the good name of GE.
i noe there are agents out there simpling ranting aloud that the return is 7% or 7.5% or what ever it is!
they are not totally wrong nor totally right.

jz to share with you guys how the plan works:

with RM15,000 (approx) (i chose 15k cos easier to calc) investment yearly in this plan,

GE will give you RM100,000 protection immediately.

an investor would then invest 15K/year into this plan up till only 10 yrs, GUARANTEED (with black and white doc)

at the beginning of 11th year, the 1st payout is RM20,582 (approx) including the 7.5% ON THE SUM ASSURED

ok paused... here the 7.5% return is actually on the SUM ASSURED of RM100,000. got it guys ?
(4.25% GUARANTEED 3.25% ON COMPANY PERFORMANCE)

so from the 11th year onwards, the policy holder will get to enjoy 7.5% return based on the SUM ASSURED. and i stress the point again its on the SUM ASSURED! not on savings ok ? ur total investment in this plan would be RM150,000 approx and you get RM7500 return on the 11th year onwards to AGE 87

and if the policy holder choose not to take the RM7500 declared yearly he/she can leave it with GE to get interest of 5.25-5.5% on top of the RM7500 declared yearly.

so hope this explanation will make things clearer to you guys, i noe there are agents out there who do not stress on the point its on SUM ASSURED! and when the policy holder finds out about it they'll later blame the company. (plz plz if u are the agent reading this plz stress on the SUM ASSURED point ok after all v all are in the same ship... v are working as a team not as lonewolf ya ) but correct me if im wrong k ?

actually the concept on this plan is not to stress so much on return, but to stress on how it can benefit the policy holder in the long run.

all this can get from the product brouchure
feel free to contact me for more info refer my siggy
HONESTY and CLIENTS INTEREST always comes first !

This post has been edited by xeNOS: Apr 7 2008, 12:05 PM

i've bought a medic card, 36 illness, hospitalization & investment and now im kinda regret cuz its burden me a lot.... i know that at the end of the day, i wont be getting back as much as i've invested....

Insurance is not a form of investment.

Insurance = Hedge against undesirable outcome
Investment = Growing your capital

haha... please la... Do u understand the meaning EFFECTIVE INTEREST RATE? even added on a projected 3% dividend, the EFFECTIVE INTEREST RATE is 4+/-% The only advantage of so called savings plan is the added insurance which can be bought separately. Ie dun 'campur aduk' ur insurance and savings together. A total waste.

---

Added on April 7, 2008, 3:46 pmmarketing gimnick again.. always leading ppl to think they will 'lose out' if they dun buy/save NOW. If i was u, i walked out straight from the deal

This post has been edited by bafukie: Apr 7 2008, 03:46 PM

Exactly Mod, I couldn't have worded it better.

thats call "threatening"

i was wondering have they ever bought their own insurance?

dr2k3,

So, this is TAX RELIEF. You pay 5K to 6K to insurance in order to save (11% to 13%) aka RM550 to RM780. How smart is this? The person could have buy less insurance and save the money.

Dreamer

erm...i never got tax before...is it yearly tax or monthly ??

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

if 5-6k will be gone anyway which 1 would you choose tax or insurance

This post has been edited by dr2k3: Apr 7 2008, 07:15 PM

Annually.

It depends. If one bought some non-essential and necessart insurance, it can be like burning money only.

For eg.
You bought 6K of non-necessary insurance, the relief of 6K (if you are in highest tax bracket of 28%), it means 1.68K safe on tax.
But you 'burn' 6k to save 1.68K, is it considered a wise move? You still 'burn' 4.32k.

Yes, if you bought some necessary and essential for your needs and affordability then you can save a bit from the tax relief. (for tax bracket in 28%)As paying 6K mean effective you are paying 4.32k only.

The first criteria to consider is the insurance whether one actually needs it or not and affordability side, not the saving on tax relief side.

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

---

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

---

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

no offense , define Too much and how unlikely to happen ? 200K n above for critical illness or medical ?

yewkhuay,

1) What kind of medical condition require medical expenditure above 200K?

How likely for this to happen?

2) What kind of Critical illness require medical expenditure above 200K?

How likely for this to happen??

Call a few hospitals if you are interested.

3) What is the premium versus coverage for below 200K versus above 200K??

If you ever shop around for medical insurance and critical insurance, you will find that premium is reasonable for coverage below 200K. Above 200K coverage, the premium grew exponentially. This is because very few people can buy that amount of insurance in Malaysia.

The problem with the rich is that below 200K, they have the money to cover that. What they need is insurance that cover a lot more that 200K. But, the premium grow exponentially for coverage above 200K.

Anyhow, this is still not a big deal for people that are very rich. Since even if they waste money on insurance, it does not matter to them.

The worst problem is with people with lower income. Some of them bought so much insurance that they have NO SAVINGS.

Dreamer

Emergency Funds
Accident/ Medical Insurance/ MRTA for Home
Investment

Life insurance is not necessary with a proper investment plan.

Many are buying a Life insurance just to get something back at the end of the day, without taking into consideration of pitiful returns.

Dear Unc Dreamer,

I am in reply to the above statement where dr2k3 mentioned about the whole tax thingy for insurance (which, i would like to emphasize, insurance in general, and not medical, life, or whatever terms there is) The scope is general which irregardless on what he is buying. My point is the saving from tax. That's all.

Secondly, what makes you think when I am giving my point of view in the good part of insurance (which I personally experienced myself in the loss of my family members and acidents that occured to me) makes you think I am an insurance agent?

dr2k3 was giving an example of spending RM6K, it's his choice, not ours. All we can go is advice him to lower down or don't buy at all. Well of course those insurance agent would be laughing his way submitting cases. RM6k annually which means RM500 per month. We all know that's a lot of money. But I believe he is just giving an example.

Rather the word INSURANCE is a taboo for you, why not have a look on other people's opinion instead?

This I would agree. Finally unc dreamer explained things in full. I personally was struggling in paying my insurance when I was jobless and my business was shaky. What's best advice is to think it over what do we really need?

Hi dreamer, May i know what is ur jobs?

I personally think that you are very free on replying threads. You should not be in management level as manager dun bother to online due to no time.

Or, you are retired person?

Btw, insurance is a must for most of the people.

Of course, those getting rm1000 salary (low income), they can not affort to buy. They priority is "everyday, dun get hungry at least"

If you have extra money, you should spent some money for insurance. But just need to have suitable and affortable insurance plan.

Insurance was exist for many many years. It have his own strengths, if not, they would stay that long.

This post has been edited by g00glesYYl: Apr 9 2008, 10:27 AM

Dyong,

Before you buy MRTA for home, you should consider buying term life insurance instead. You MAY or MAY NOT have the choice of doing that depending on how much down payment that you have.

There are MANY reason for this advice

A) MRTA pay for the house only. When someone died, you NEED CASH. If you have ONLY MRTA, the surviver MUST sell the house to get CASH. Selling a house in a short period of time get you a lousy deal.

B) With term life insurance, you get CASH. So, the surviver can decide to keep the house or sell it later. With CASH, you have the flexibility of deciding what to do (funeral, college education, living expense) and so on.

C) You can shop around for term life insurance but you must get MRTA from the bank providing loan. So, usually, you can get better deal than MRTA with the same amount of premium.

In summary, CASH is more flexible than HOUSE. So, term life insurance is better than MRTA.

<<Many are buying a Life insurance just to get something back at the end of the day>>

So, buy a term life insurance or whole life insurance with as little cash back value as possible.

Dreamer

P.S.: I am actually advising people to buy insurance. This is incredible.

---

Added on April 9, 2008, 10:38 amg00glesYYl,

<<Hi dreamer, May i know what is ur jobs?

I personally think that you are very free on replying threads. You should not be in management level as manager dun bother to online due to no time.>>

A) Personally, I think it is none of your business.

B) BTW, a good manager should never be busy. Read up on "one minute manager" if you are interested.

C) Obviously, you have never met a good manager before.

<<Btw, insurance is a must for most of the people. >>

Who cares?? The MORE RELEVANT question is

A) Do I need insurance??

B) If yes, how much and what kind?


<<If you have extra money, you should spent some money for insurance. But just need to have suitable and affortable insurance plan.>>

Which is GENERAL statement that provide NO INFORMATION to help anyone.

A) What is suitable??

B) How to calculate what is affordable?

My rule of thumb is if you CANNOT save 10% to 15% of your gross income, you are OVERSPEND.

<<Insurance was exist for many many years. It have his own strengths, if not, they would stay that long.>>

You are not OLD enough. It took average American about 15 years to figure out that whole life insurance is a waste of money and they should buy term life insurance instead. It will probably take that long or longer for Malaysians to reach that level of financial maturity.

Dreamer

This post has been edited by dreamer101: Apr 9 2008, 10:38 AM

Let's see... the main points in your reply.

1) When someone died, you NEED CASH
2) With term life insurance, you get CASH.

Nothing is certain except death and taxes
Yes, you need cash for Final expense, Tax, living expenses for your ramianing commitments.

3) better deal than MRTA with the same amount of premium
I have to look into this, might not have taken this into consideration.
Thanks for highlighting it.

4) CASH is more flexible than HOUSE
Yes, it takes time to convert assets into cash, with estate tax planning, the need for cash can be drastically reduced limited to only final expense.

I expect a scale back on the living conditions for the remaining spouse to tide over difficult times.
Probably disposing of house and living with relatives.


Side comments on :-
<<Insurance was exist for many many years. It have his own strengths, if not, they would stay that long.>>
Argumentum ad populum.
How to convince critical minds?

This post has been edited by Dyong: Apr 9 2008, 11:05 AM