14th August 2018 - 7 min read
Buying a life insurance policy as soon as we are able to is a responsibility that most Malaysians fail to accomplish. This important step to secure the long-term livelihood of our loved ones is often rejected due to a variety of reasons.
According to the Life Insurance Association of Malaysia (LIAM), only 12.6 million Malaysians are currently covered by life insurance policies in 2017, a figure which only grew by a paltry 0.1% from 2016. While growth is still positive, another statistic should give Malaysians a bit of food for thought: the sum assured per capita is an average of RM42,992 in 2017 (the sum assured is the minimum guaranteed payout that the policyholder will receive should the he/she passes away).
If that amount looks too low to sustain the livelihood of those who depend on you, that is also statistically correct. In a press release, LIAM noted that “based on 2012 Underinsurance Study in Malaysia undertaken by University Kebangsaan Malaysia and LIAM in 2013, the average mortality gap for each member of a family is about RM100,000 to RM150,000.”(the mortality gap is essentially the difference between the amount of sum assured and the actual amount they need to sustain surviving loved ones.)
Clearly, there is a disparity between the benefits of life insurance and the perception of it in the consumer’s eye. So, why is this happening?
This is easily the most common preconception about life insurance, not just among Malaysians, but around the world. For the low- and middle-income earners, many find it difficult to take on an additional monthly expenditure that will likely already be burdened by monthly loan repayments for car, property, and education. Young families will be even more hard-pressed, with infant-related expenses to consider. As a result, life insurance is considered a “luxury expense”.
The fact is that life insurance policies can be scaled based on the individual’s salary range as well as sum assured. There are policies that can go even below RM3 a day, while providing five-figure guaranteed coverage. That’s lower than what you pay for a plate of “Maggi goreng”, and less than half the price you pay for a cup of bubble tea. And, many don’t consider that as we grow into new jobs and larger salaries, we can opt to buy additional policies with larger guaranteed payouts and benefits.
For example, the Zurich SureCover policy can be subscribed at a monthly premium from just RM75 per month, but guarantees up to 500% of the basic sum assured should the life assured suffers an accidental death. It’s also got a unique Guaranteed Acceptance feature that provides coverage for life assured from age 35 until 80 years old. On the other hand, should the life assured lives on to 100 years old, the policy will mature and offer a lump sum payout of 188% of the total premiums paid.
In the daily hustle, having someone stop you to talk about life insurance will surely seem like a hindrance. And because this isn’t something that most Malaysians talk about regularly, it slowly becomes something that we promise we’ll look into “when there’s time”. After all, insurance agents always take so much time explaining the policies that takes time to digest and understand!
However, ensuring that your loved ones will be well taken care of financially if something were to befall you should always be something to prioritise. Life insurance isn’t as complicated as it is made out to be. Once you understand the jargon (which most agents will happily explain), the process gets easier in future; almost like riding a bike.
On top of that, it is in the insurer’s best interests to make its policies as clear as possible. Not only will this help the policyholder understand better, it also prevents future issues should there be any disputes over claims and payouts.
A good example is in the Zurich FlexiLife Premier life insurance policy. At face value, the huge list of features and benefits make it look very daunting, but if you take time to go through them (maybe even with the help of an agent), you’ll find that this is one of the best policies in the country. It offers high coverage with a high non-medical limit of up to RM2 million (a non-medical policy doesn’t require a medical test when issuing), total permanent disability (TPD) coverage of up to RM8 million, infectious disease coverage, an additional RM25,000 coverage every five years at no cost, and plenty more.
Besides being too expensive, there are several other popular misconceptions about life insurance policies. Some may say that if they are young and healthy, they have no need for life insurance. Others may feel that life insurance should only be for the older folk. Finally, another common reason for not taking life insurance is that they are already covered by his or her company.
The irony is that the truth is quite the opposite. It is better for those who are young and healthy to buy a life insurance policy as soon as possible, because it is much cheaper for them to do so in the long run. Buying a policy when a person is already old or has health complications increases the monthly premium that is required to stay covered. Finally, having insurance coverage as an employee is an added bonus while you are with the company; it is very likely that the policy will not cover you when you depart the company.
A rider is a provision to an insurance policy that generally adds to the coverage of the policy – at an additional cost. Most policyholders generally avoid taking on riders as they may consider the policy’s coverage to be “good enough”. In truth, a rider complements a policy by meeting a policyholder’s specific needs.
For example, if you’ve already got a good policy with great coverage like the Zurich FlexiLife Plus, adding a rider such as the Zurich MegaMed rider makes a lot of sense, because it offers additional benefits on top of your existing Zurich life insurance policy. It not only offers a high annual limit of up to a whopping RM2,250,000, it also has an extensive range of benefits for medical costs incurred as both in- and out-patients, which include up to RM380 Daily Hospital Room and Board limit, surgical fees, kidney dialysis treatment, as well as emergency accidental out-patient treatment. There’s even coverage for out-patient dengue treatment and overseas medical treatment –benefits and features unique to this rider.
Life insurance isn’t some necessary evil that we have to pay our dues to every month. It is actually an essential part of adulthood, and a responsible act to ensure the comfort of our loved ones if the unexpected happens.
Stay protected with Zurich’s extensive range of life insurance policies, with varying premiums to cater to various income levels. For more information, check out the Zurich Flexilife Plus, Zurich MegaMed rider, and other Zurich life insurance plans.
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