85% Of Malaysians Unprepared For Family’s Financial Future, Survey Finds

Samuel Chua

19th March 2025 - 4 min read

A significant number of Malaysians have yet to establish a financial legacy plan, with 85% reporting they have not taken formal steps to secure their family’s future. This is one of the key findings from Sun Life Malaysia’s latest survey, Insure or Unsure: Sun Life Insurance Literacy Survey 2025, which examines financial literacy and legacy planning trends in Malaysia.

The survey, conducted among 1,040 Malaysians across various income levels and regions, found that while general understanding of insurance and takaful has improved from 28% in 2023 to 35% in 2024, nearly a quarter of respondents still lack basic knowledge in this area. Despite 65% of Malaysians acknowledging the importance of legacy planning, only 15% have implemented concrete measures to ensure financial security for their families.

The findings highlight a gap between awareness and action, with many Malaysians recognising the importance of wealth protection but not taking steps towards it. Those who have engaged in legacy planning commonly use financial tools such as insurance and takaful (71%), trust funds (53%), and wills (44%). However, the majority remain unprepared, which could lead to financial challenges and difficulties in intergenerational wealth transfer.

According to Raymond Lew, President and Country Head of Sun Life Malaysia, these results indicate a need for more accessible financial planning tools and greater public awareness. “Unfortunately, the results shine a spotlight on a worrying phenomenon. The majority of families are unprepared, placing their loved ones at significant risk of financial insecurity. With a more unified approach that respects cultural nuances and provides accessible tools, we can reverse this trend and secure brighter futures for Malaysian families,” he said.

The survey also noted that married individuals with children are more likely to acknowledge the importance of legacy planning. Among those who see its necessity, 60% are married, 34% are single, and 6% are divorced, widowed, or separated. Despite this recognition, many still lack formal financial plans.

Cultural and religious factors also influence legacy planning decisions. Malay respondents, for example, often prefer Islamic inheritance tools such as Hibah (a gift) and Wasiat (Islamic wills), which align with Shariah law. This suggests that financial solutions tailored to cultural preferences may help encourage broader participation in legacy planning.

The survey found that 54% of those who have begun legacy planning sought professional advice, indicating an increasing reliance on expert guidance. However, for families without a formal plan, the absence of clear financial strategies may lead to uncertainty and, in some cases, disputes over inheritance.

Three primary challenges were identified as barriers to legacy planning: financial constraints (41%), uncertainty about where to begin (39%), and competing financial priorities (35%). Lower-income households face the greatest challenges, with 68% of non-planners earning below RM5,249 per month. The survey also highlighted disparities in financial preparedness, with 72% of high-income earners viewing legacy planning as essential, compared to 45% of those with lower incomes. Among those who have not taken any steps towards legacy planning, 68% belong to the lower-income category.

Additionally, 48% of respondents identified preventing family disputes as a key motivation for legacy planning. Among different household structures, blended and mixed-culture families were the most likely to discuss their plans, with 82% reporting conversations on financial arrangements, compared to lower engagement in nuclear families.

While insurance and takaful literacy has improved, with self-reported understanding rising from 28% in 2023 to 35% in 2024, 23% of Malaysians still lack basic knowledge in this area.

Now in its second year, the InsureLit campaign aims to further enhance public awareness of financial planning, particularly legacy planning. Sun Life Malaysia plans to expand its outreach in 2025 with new digital and social educational resources, roadshows, an explainer video series, and financial literacy programmes for young people.

Lew emphasised that a coordinated approach involving financial institutions, policymakers, and community leaders could help address the gaps in legacy planning. “There needs to be a concerted effort by financial institutions, policymakers, community leaders and individuals to address this crisis, be it making legacy planning accessible for all income levels or offering multilingual resources to guide Malaysians in this area,” he said.

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