Everyone needs an insurance package. Ha… Ha… This statement is only true if you are like me - get a normal income. 95% of us fall in this category. Only 5% which are extreme rich does not need to have an insurance package. They can cover themselves if any unexpected incident happens. Since we are not in that group, do you know which insurance package to buy?

I did a very long research before buy an insurance package. I asked from a normal insurance agent to agency manager. None of them gave me a good insurance package that suits me. Some of the agency manager even wants to recruit me to be his agent. Ha… Ha… Too bad that most of the insurance package help insurance company earn money only. Therefore, I do not willing to ask people to buy…

Which insurance package I take? I chose a group term insurance package without any investment involved. I took MUTUAL LIFE PLUS 2 from Public Mutual with Great Eastern which renew yearly. I can take that package because I invest Public Mutual unit trust. There is a lot of group term insurance that available to lot of company. And most of them are cheap. For example, the package I take only cost me RM720 in the first year. It covers RM200,000 for natural death/TPD, RM400,000 for accidental death/TPD and RM200,000 for 36 critical illnesses accelerated. That is very cheap package compare to those insurance packages with medical card and investment link included. However, the price went up to RM950 per year after one year I took it. Ha… Ha… I am still fine with it because it is still cheap for that much coverage. Do you get a package like this?

It is funny that whenever I ask my friend how much coverage is their insurance package, none of them know it. They just buy it when somebody asks them so. And they do not think about it when they buy. As long as they have an insurance policy, they are fine. Ha… Ha… Are you one of them?

Most of the package suggested by insurance agent is around RM1800 per year. It includes life, medical and investment. However, the coverage is low. Example, I was given a package of RM50,000 life, RM40,000 critical illnesses, RM150 per month medical card and investment link for RM1800 per year. I forgot how much is the investment amount but I can assure you that you cannot manage the investment yourself. And most of investment package did not perform well. You cannot buy when the market price is low. And you cannot sell when the market price is up. No control at all. Therefore, you cannot earn more. Do you like this package?

Why we need an insurance policy? We need that to protect us from unexpected thing. Take an example, you just start working after school. You are young around 22 to 25 years old. You admitted in an accident and cannot work after that. Can your insurance policy coverage enough for you to spend for the rest of your life? With RM50,000, you will finish it in 4 years if monthly expenses are RM1,000 only. However with RM400,000, you will not finish using it until you die. Why? Keep RM400,000 in fixed deposit with 5% interest rate. You will get RM20,000 per year and that is RM1666 per month. Do you get my point?

Different age and situation have different insurance package to choose. A man with family should get a higher coverage insurance policy as he might be his family main income. Without his income, his whole family will in danger in economy. I am still single for the moment, therefore RM200,000 coverage is enough for me for the moment. I will increase it to RM400,000 or RM500,000 when I have family.
For short (what I did)…

• Take 5% to 10% income to buy insurance.
• No investment in insurance package. Do the investment yourself.
• Get a high coverage insurance policy.

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How to save money for the future?