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

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

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

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

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

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

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

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

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

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

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

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

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

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

suiteng,

A) With so MANY insurance agents running around selling insurance and others BIAS for insurance but do not know why, I provide a GOOD counter balance. Someone has to OFFER the counter point of view to balance thing out.

B) Do I REALLY hate insurance?? Does it matter?? As long as I can force people to THINK and MAKE a better decision, I have educated someone.

<<but you're lack of something which is called emphathy.>>

C) So?? There are ENOUGH nice people around that refuse to speak out. Where are them when you need someone to wake you up and make a better decision?? The world has TOO MANY nice people. One more NICE PEOPLE does not help anyone.

Dreamer

g00glesYYl,

The numbers do not make sense.

A) EPF is 11% from employer and 11% from employee. So, it is around 22% to 23% of the gross income. To be 30% means that you put extra into EPF. Why would I want to do that?

B) FD = 15%? The goal is to create a 3 month to 6 month emergency fund. So, until you do that, 100% of your savings is into FD. Until you built the emergency fund, you do not put any more money into FD. So FD =15% do not make sense.

C) The total number added up to 80%. Tax is at least 15%. So, your living expenses excluding house is only 5%?? How does this work?

D) Insurance = 10%?? Isn't this what we have been arguing about?? There is NO SUCH THING. You may need more or less. To most people, they need less. People need to learn how to calculate and buy accordingly. Formula like this is used by insurance agent to get people to OVERSPEND on insurance. IMHO, 10% on insurance is TOO MUCH for most people. You should ONLY use insurance for PROTECTION. Savings and investment can be done with lower cost through other mean.

Dreamer

---

Added on April 9, 2008, 9:52 pmhamster9,

A) How long do you plan to pay for the house??

20 years?? 30 years?? You can buy sufficient term life insurance to cover the term of the loan.

B) MLTA or term life insurance??

How much does it costs you to get the additional 300K coverage?? MLTA or term life insurance is cheaper?? This is like shopping.

<<but after 20 years, when I'm around 40 plus, don't have a life insurance. So what shall I do?>>

C) So, what is stopping you for getting longer term life insurance?? 35 years? Get a term life insurance that cover you up to retirement.

But,

D) After you paid off the house, you MAY NOT need that much coverage.

This is like any kind of shopping. You pay $X for $Y coverage over the period of Z. You choose the combination that cost you the least and still provide the sufficient coverage. It is not that hard.

Dreamer

This post has been edited by dreamer101: Apr 9 2008, 09:52 PM

yewkhuay,

<<1&2 : when was the last time u call up hospital n ask about this figure n the incidence rate n frequency ? i m in medical line, everyday i m seeing doctors n patients n we discuss about 1 common thing, no money for suitable treatment. >>

So, since you know, tell us and educate us typically what kind of medical condition and treatment costs more than 200K in Malaysia. Do not speak in general term. Give us some examples.

<<3. when was the last time u ever shop around for insurance ? oh u don't . may be insurance agents here can answer the below 200K n above 200K question. get ur facts right.>>

Okay. If you have more up to date information, correct me. If not, the best that you can say is you do not know. Then, why argue with me? Please note that I am NOT in your age group.

It is VERY SIMPLE. If you have BETTER and MORE up to date information, tell us. Correct me. I want to learn.

Dreamer

b00n,

It get worse than that. You do not have to pay fee and commission to put money into FD. But, you have to pay fee and commission into the saving portion of the insurance. So, the return is much lower than FD.

Insurance as saving ONLY work for people that cannot save money into FD or bank.

Dreamer

yewkhuay,

<<when u ask me to call up the hospitals to ask about the medical conditions tht require 200K n above n how likely it would happen, u should know the answer or hav the facts with u, if not , u r not different from ppl who can talk n divert conversation. obviously, u r either not willing to share or U DO NOT KNOW.>>

Okay. I am wrong. I do not have up to date information so I asked people to call. I do not know what is the latest price.

1) You are assuming that EVERYONE can afford to pay that amount of premium. My definition of whether someone can afford something is more flexible. If you cannot save 10% to 15% of your gross income, you have OVERSPEND. The problem here is people OVERSPEND on insurance until they have NO SAVINGS.

2) Under that condition. most people (99+%) of Malaysians do not have enough insurance to cover that. And, they cannot afford to pay the premium for that kind of coverage anyhow.

3) Read carefully. I am talking about Critical Illness and medical insurance. Not life insurance.

Dreamer

This post has been edited by dreamer101: Apr 10 2008, 07:28 PM

darthvader98,

1) So, this is like everything else in life. You shop for what you can afford and make sense.

2) You make sure that you can save at least 10% to 15% of your gross income every month. Use that to build your emergency and investment. That is your first level of insurance.

3) Then, you budget for some insurance to protect against your greatest risk. And, your risk profile is different depending on your job, age and so on.

4) Do more exercise and eat healthy. It is cheaper in the long run and you live a better life.

5) Stop smoking.

Dreamer