Even though the concept is far from new, many Malaysians still don’t clearly understand life insurance and its features. Knowing all you can about life insurance is essential because of the pivotal role this resource can play in securing your future. Without further ado, here’s a concise breakdown of all you need to know about life policy coverage today.
The Basics Of Life Insurance
Life insurance is an established agreement between you and your insurer that trades premiums for coverage. You pay your insurance company a bonus; your beneficiary gets financial compensation when covered events occur. Life insurance can take different forms.
This type of life insurance is issued only for a specific time frame. In most cases, the duration of temporary life insurance is between 5 to 30 years.
Features Of Temporary Life Insurance
The death benefit is for the beneficiary only if the insured party dies within the active time frame of the policy.
There’s no value offered at the end of the policy term.
It allows one to convert to a permanent life insurance policy without proof of insurability.
This type covers you for as long as you live, provided you do not renege on the payment of your premium or violate the terms and conditions of your policy.
Features Of Permanent Insurance
The policy beneficiary is guaranteed payment of a death benefit regardless of when the insured party dies as long as they’ve kept up their premium prices.
It comes with a savings feature.
It affords a loan or cash value you can invest, withdraw or borrow against.
Factors That Influence Life Insurance Premium Rate
As you may have noticed, one recurring theme with both term and permanent life insurance is premium. A premium is a price you pay your insurance company in return for their financial protection. The factors that determine just what you have to pay as a premium include but aren’t limited to;
The result of your medical exam.
Your family’s medical history.
Your marital status.
Your geographic location.
Your lifestyle preferences.
Significant Reasons To Get Life Insurance
Some reasons getting life policy coverage is an intelligent play are:
It Helps Cover Funeral Expenses
Today, funerals in Malaysia can cost anywhere between RM 3 000 to RM 20 000 or even more. Having a life insurance policy can reduce how much your beneficiary will have to shoulder out-of-pocket.
To Substitute For Income
In your absence, your loved ones may find it hard to make ends meet. With a life insurance policy in place, they won’t have to change their standard of living or get into debt.
To Help Transfer Wealth
With this policy, you can ensure that your family doesn’t succumb to financial burden as they’ll have a one-time payoff or a monthly inflow of funds to rely on.
Getting and managing a life insurance package may seem tasking at first but the financial safety it affords your loved ones in your absence makes it more than worth it.
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