1. Why do I need life insurance?
Insurance serves as a financial safety net should something untoward happen to you. Insurance compensation will help your dependents to tide things over in a time when funds are low. From The AIA Life Matters survey, ONE among almost every five Malaysians stand to face serious financial difficulties within just 3 months if he or she is forced to stop work through illness or accident. This is where insurance plays an important role in providing an emergency fund.
2. Which plan is right for me?
It all depends on the person's financial objectives and affordability. For example, a traditional whole life plan emphasises on protection whilst a traditional endowment plan offers protection which comes with a savings element. Thus, the premium for endowment plan is much higher than a whole life plan for the same amount of coverage. Other than traditional life policies, there is also option for investment-linked type of insurance policies which allows policyholders to determine the level of participation in equity market via the choice of fund(s) based on the risk appetite of the individual. Therefore, it would be a good idea to discuss with your financial planner the different options available.
3. Am I insurable?
Your insurability depends on three main risk factors:
i) Medical risk factors - built, personal medical records and family history
ii)Personal risk factors - occupation, moral hazard, avocations, hobbies, international residence etc.
ii) Financial risk factors (insurance coverage applied vs financial needs / income)
The final decision of acceptance lies ultimately with the underwriters.
4. How much will it cost?
It depends on factors such as your age, sex, health status, occupational risk, type of plan and sum assured purchased. Most importantly, you should satisfy yourself that the plan purchased will best serve your needs and that the premium payable is an amount you can afford.