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You don’t need life insurance if..

Ahhhh insurance.. Many of us have encountered someone who tries to advise us on getting life insurance to the extent that we become sceptical of ‘life planners’, ‘insurance agents’ or ‘wealth advisors’. (They’re all the same, btw.)

Apart from the compulsory motor insurance for anyone owning a vehicle🚙, people often shy away from getting other types of coverage – particularly life insurance. Simply put, life insurance gives your family, friends, girlfriend, and boyfriend also can – a financial cushion should you pass away. A sum of money called a ‘premium’ 💰is paid to your insurer, and in return, whoever you nominate will receive a cash payout in the event that you kick the bucket (RIP).

You might have heard that getting life insurance is crucial, but that isn’t always the case if… 

You have no dependents.

For those of you that are relatively young 👶🏻, still studying 📚 , reasonably new in the working scene👨🏻‍💻, and have no massive liabilities for your family to cover in the event of death, life insurance is not a necessity. If anything, you might want to start looking at health coverage first.

You aren’t worried about burial expenses. 

Burial expenses for Muslims and Hindus are pretty economical as they typically cost below RM2,000. Chinese funerals can range from RM8,000 to RM150,000 based on the different types of burial plots, casket, tomb and how elaborate the burial ceremony is. Yep, if you want a ten-day ceremony, you’re looking at something within the five-figure range.  🤯

 

Given that you have already prepared this amount of money prior to your passing for your family to use, it’s okay not to take life insurance. 

If you contribute to EPF, it also comes with a death benefit of RM 2,500 for your next of kin. Just make sure to list the names of your eligible beneficiaries to ease the process.

You are debt-free!🥰

Suppose you do not have any of the five big loans, namely personal, education, car, home, and credit card loans, then congratulations! You’re doing great, and we are super proud of you!

In this case, your family members and guarantors would have nothing to worry about! You’ve settled all of your debts and don’t have to worry about being the cause of their financial pitfall, so life insurance can take a back seat for now. 

P/S: Do you know that a person is declared bankrupt if he or she fails to settle a debt of at least RM 30,000? (Bankruptcy Act 1967) 😱

Your nest egg is well-prepared for you and your family.👑

Life is a hustle. Kudos to you for now having accumulated enough wealth that’ll last beyond your retirement! Maybe tujuh keturunan also tak habis. 👸🏻

 

As a grown-up, you’re ultimately responsible for your children’s education and their expenses until they are big enough to earn independently. If you are financially independent and confident that your savings can cover all liabilities in the event that you depart, you can choose to self-insure instead. That’s pretty cool too.😎

The future isn’t what you are worried about. It’s the present.😰

It’s not that you don’t want to think about the future or you don’t want any coverage, but you’re rather struggling to keep afloat. Your monthly commitment is high👛, and you barely have anything to save. We gotchu. 

 

If this situation sounds familiar, there are two options you can consider for the time being. Firstly, put life insurance on the back burner and focus on getting your finances sorted♟. Take your time and learn how to generate more income while keeping an eye on your budget. Use the HeyAlfred app to track your expenses. There is NO RUSH in getting life insurance. 

Have a small budget but you still want to protect your family? Then this second option is for you. Try taking a look at Perlindungan Tenang offered by the Malaysian Takaful Association. Unlike other life insurance, Perlindungan Tenang allows you to renew your plan annually.  Premiums start from RM3 per month! Even a bungkus of nasi lemak lagi mahal nowadays okay. 

The application and claim process for this policy is fairly straightforward and there are six major takaful providers that you can choose from. Find out more about Perlindungan Tenang by visiting their page here.

The bottom line is..

Although life insurance is undoubtedly necessary for many, it is most certainly not compulsory for everyone. What matters is knowing how to prioritise. For more of everything finance, be sure to follow us on our socials!