
How to start off the year 2008 with a proper financial planning? Here’s a shocking statistic. Only 4 out of every 10 Malaysians have life insurance. If you are among the 6 who run the risk of living everyday unprotected, the first thing to do this coming new year is to get a life insurance policy for your complete peace of mind.
Why You Need Life Insurance
Contrary to popular belief that you don’t need life insurance if you don’t have dependents, the exact opposite is true. Life insurance is the important first step in any sound financial plan. With the various riders to life insurance policies, they not only cover death but also accident, permanent disabilities, illnesses and hospitalization. Before you even begin anything, you and your loved ones must be protected against untoward incidents. Your ability to earn income, not your house or car, is your greatest asset. Issit yours insured?
How does Life Insurance fit into your Financial Plan.
Financial planning isn’t just about saving money and investing for retirement. Saving and investing is only a small part of a more complex long-term financial strategy. It is not complete without the element of protection. Nobody plans for any mishaps. However, what you need is to have a contigency plan to prepare for the thunderstorms in life
When the breadwinner of a family dies, it is also a financially challenging phase, with added expenses arising from the funeral proceedings. Life insurance which is payable upon the insured’s demise helps the deceased’s loved ones to continues living with financial peace of mind. Without life insurance, the family’s financial plan will collapse and sadly come to an abrupt end. Even if you’re single with no dependents, the riders in an insurance policy can cover you against accidents, disabilities, illnesses and hospitalization.
The types of life insurance policies available in the market are term insurance, whole life, investment linked products, endowment, life annuity plans, mortgage reducing term (MRTA), supplementary riders which are attached to basic insurance plans and medical/health insurance plan. Each type has its own merits and help to protect you and your loved ones in the event of accidents, illnesses, disabilities and death. The ones you need would depend on your personal situation and requirements.
Starting Off Early with Life Insurance
If you don’t already have a life insurance policy, it’s crucial to start now. Here’s why :
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You will only be protected once the policy comes into effect.
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You can accumulate more for your retirement if you start early for policies with cash values
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The premium rates become higher the older you are. Start early to enjoy lower rates.
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Likewise, take on a life insurance policy when you’re still healthy to enjoy lower rates.
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Life insurer have an age limitmfor those they cover. Don’t procrastinate until you are of an uninsurable age
Buy Life Insurance For Your Children Too
Lif insurance is not just for you. Financially savvy parents buy insurance for the children from the moment they are born. It’s good to start as early as possible as the young enjoy the lowest rates. By the time they reach 21, their policies would have accumulated a tidy sum. This way, you’re carrying the legacy by helping your children protect their own children. Your children can add on to the policy to suit their needs when they grow older.
Confucius said: " A journey of a thousand miles begins with a single step". Financial planning wisdom states : "The first step in your journey to financial freedom is life insurance." Ignore life insurance at your own peril