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?

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

Insurance is not a form of investment.

Insurance = Hedge against undesirable outcome
Investment = Growing your capital

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

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.

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

ST,

Financial planning (aka insurance as a subset) is personal.
Each and everyone of us are in unique situation and there's no one-size-fits-all solution.

The beauty of this discussion is for all to understand different views and aspects of insurance planning and strategies other employed. Hopefully you take back something after all.

End of day, You are the master of your destiny.
I've indeed learnt something with dreamer's posts.