Category: business

What Types of Insurance do Malaysian Finance Content Creators Have?

These content creators are known for their financial savviness but what about their own safety nets?

Personal finance is a topic that many Malaysians have begun taking an active interest in recent years, with more and more people looking up ways to maximise their net worth, especially in the wake of the pandemic. This surge of interest is also reflected by the number of personal finance content creators that have emerged and built up sizeable followings of their own.

But while investing in the wide array of products available may be more up their alley, how have they built their own contingency plans in the event of life-changing events? Here’s what some of Malaysia’s most well-known finance content creators have to say about insurance:

Leigh (32 years old) – Dividend Magic

SI: What types of non-compulsory insurance do you currently have?
L: Medical, life, and house insurance.

SI: Which of these is most important to you and why?
L: Medical insurance. My life insurance is the bare minimum as a base policy for medical insurance. I see medical as being the most important in the future and because I have no dependents now, no life insurance for me. As we all know, the medical inflation rate is crazy and way above the average inflation rate of the economy. I foresee myself having to increase my medical coverage in 10 to 20 years.

SI: What prompted you to purchase your first insurance policy?
L: Financial literacy and with the realisation that medical costs can reach hundreds of thousands of dollars!

SI: What type of insurance do you think every Malaysian should have and why?
L: Medical definitely, please please please get your medical coverage sorted out. As for life insurance, you should consider it if you have dependents. If your investments and savings are sufficient, you might not even need life insurance etc.

SI: Is there a niche form of insurance that you have considered purchasing?
L: No.

Read more from Leigh at dividendmagic.com

Helmi Hasan (35 years old) – Balkoni Hijau

SI: What types of non-compulsory insurance do you currently have?
HH: I currently have a personal life and medical policy, an additional life and medical policy from my employer, and house insurance. I also used to have annual travel insurance pre-Covid as I travel frequently.

SI: Which of these is most important to you and why?
HH: Medical and travel insurance is super important as I studied in the US. A friend of mine was hospitalised for a broken collar bone in a skiing accident had to fork out at least US$4,000 for his medical bill. Also, as a family man, a home is super important, so you might want to get house insurance and flood coverage since the last flooding event.

SI: What prompted you to purchase your first insurance policy?
HH: My mother asked me to buy insurance to follow in her footsteps. I started with investment-linked life insurance. But after I had kids, I needed to readjust my insurance plans. For me, I only want to get insurance coverage (without the investment part).

SI: What type of insurance do you think every Malaysian should have and why?
HH: Medical, life, and house should be mandatory for all. Also, all Malaysians MUST have extreme weather insurance coverage (floods etc).

SI: Is there a niche form of insurance that you have considered purchasing?
HH: When I was working in Singapore, there was something called “lifestyle insurance” where if you are laid off from your job, it can help to pay your salary for a few months. I have yet to see such insurance in Malaysia (besides PERKESO) and would like to consider one.

Also, as a YouTube content creator, I invest in expensive camera gear. I want to purchase camera/tech insurance as it’s normal to have this in the US.

Read more from Helmi at balkonihijau.com or subscribe to his YouTube channel.

Suraya Zainuddin (33 years old) – Ringgit Oh Ringgit

SI: What types of non-compulsory insurance do you currently have?
SZ: I have medical, critical illness and personal accident insurance.

SI: Which of these is most important to you and why?
SZ: In my early 20s, I thought medical card was the most useful, since I didn’t want to burden my family with hospital bills in case anything happens to me. Now in my 30s, I appreciate critical illness insurance more, especially after knowing the best time to get it is before having serious illnesses. Otherwise, you’ll be considered to have pre-existing conditions and the insurance won’t cover it.

SI: What prompted you to purchase your first insurance policy?
SZ: I heard ‘I wish I got insurance’-type advice one too many times, especially on the personal finance-related forums I used to frequent. Something about hearing complete strangers’ regret over not doing certain actions in their youth that would have greatly benefit them in old age made me determined to get my insurance situation sorted out.

SI: What type of insurance do you think every Malaysian should have and why?
SZ: Different types of insurance cover different types of risks, therefore there is no one type that is a blanket ‘must have’ for all.

I have two opinions when it comes to Malaysians and insurance. One is we should not pretend that comprehensive insurance coverage is not expensive, and out of reach for many Malaysians in the M40 and B40 category (and even for some in the T20 category as well). According to the Department of Statistics Malaysia, the median salary for Malaysians in 2020 is RM2,062. Paying for life, medical, critical illness, personal accident, house and car insurance with suitable sum assured can easily reach RM1,000 per month. The maths simply does not add up. Malaysians should be compensated better to be able to afford insurance.

Secondly, the irony of insurance is it is the most important for the people who cannot afford it. While there are now government programmes like Perlindungan Tenang specifically for the B40 community, take up rate is low. Rather than spending so much time and money and effort in educating about the usefulness of the tool, I wish it was implemented on an opt-out rather than opt-in basis, so the coverage is automatic for the people who need it. Alternatively, take-up rate may also be improved if insurance is added as a requirement for getting specific government services, such as cash handout.

SI: Is there a niche form of insurance that you have considered purchasing?
SZ: I have considered pet insurance before.

Read more from Suraya at ringgitohringgit.com

Chin Yi Xuan (28 years old) – No Money Lah

SI: What types of non-compulsory insurance do you currently have?
YX: I have life, medical, and critical illness insurance.

SI: Which of these is most important to you and why?
YX: All of them are equally important as they act as financial protection for me and my family under different circumstances in life. Life insurance pays when I pass away. Medical insurance pays if I am hospitalised. Critical illness comes in as income replacement if I get illnesses like cancer.

SI: What prompted you to purchase your first insurance policy?
YX: I upgraded my policy as there was a transition in my life from being a student to a working adult. I needed more comprehensive coverage in line with new commitments and rising medical costs.

SI: What type of insurance do you think every Malaysian should have and why?
YX: Everyone should get a medical card and critical illness protection in event where one is hospitalised and/or down with illness like cancer. Especially for people that have commitments and family, best to get life protection to help ease the burden of their loved ones when they pass away.

SI: Is there a niche form of insurance that you have considered purchasing?
YX: No.

Read more from Yi Xuan at nomoneylah.com

Ryan Lee Chun Hoe (31 years old) – Bujang and Broke

SI: What types of non-compulsory insurance do you currently have?
RL: I got myself life, medical and house insurance at various stages of life.

SI: Which of these is most important to you and why?
RL: Personal insurance is the most important to me because of unpredictable situations that may occur which I have no control of, such as accidents or health threatening diseases. Insurance may help to reduce the financial burden if I face hefty bills during the recovery phase.

SI: What prompted you to purchase your first insurance policy?
RL: I was late to buy my own personal insurance as you can actually pay a cheaper premium before you turn 25 if I am not mistaken. Around the age of 27 years old, I started to take adulthood and self-reliance seriously whereby if I happened to be on the hospital bed, will I be able to pay my bills? Would I want to seek help from my family members who are saving money for their retirement or medical bills? Hence, after giving it some thought, I personally did not want to trouble them which made me buy my first personal insurance.

SI: What type of insurance do you think every Malaysian should have and why?
RL: Medical insurance because operations and hospital accommodation are expensive, which could easily burn your hard-earned savings. The last thing you want is the hospital chasing you to pay your bills before they decide to treat you; we can’t blame them for this because that is what keeps their operation running.

SI: Is there a niche form of insurance that you have considered purchasing?
RL: Not at the moment; buying insurance is subjective as it is supposed to solve the problems that you are facing in life without much worries.

Watch more from Ryan on his YouTube channel.

Gracie (30 years old) – Ringgit Freedom

SI: What types of non-compulsory insurance do you currently have?
G: Mainly life and medical insurance.

I didn’t opt for mortgage insurance but instead, I purchased life insurance with sufficient cover to offset my mortgages as it provides greater flexibility at lower cost. I also added an additional buffer for families to have additional pocket money when I pass on.

As for the medical insurance, I also added some accelerated critical illness payout for myself in case of severe illness or major surgery, avoiding potential dents to my cash flow and emergency fund.

SI: Which of these is most important to you and why?
G: Quite frankly, both are equally important to me but if I really have to choose, I’ll pick the medical insurance with accelerated critical illness payout. If I were to be unfortunately affected by critical illness which affects my employability and disrupts my income (both from hefty medical bills and the lack of paychecks) – the insurance will definitely be a blessing for myself and my family since the large sum of payout via life insurance is only meaningful for my family members upon my death, not myself.

SI: What prompted you to purchase your first insurance policy?
G: When I signed up for a mortgage for our first family home, I had to purchase the life insurance on the same year to offset my mortgage loan, since my mom wouldn’t be able to service the mortgage loan upon my passing, hence I needed to ensure that she has a place to stay even if I moved on.

I relied only on my company’s medical insurance for the first few years until my salary grew enough for me to afford a proper medical card (whilst not overstretching my monthly budgets).

SI: What type of insurance do you think every Malaysian should have and why?
G: Personally, I think it differs on a case-by-case basis as everyone is exposed to different risks. But as a bare minimum, I would recommend getting a basic medical card whilst we’re still healthy with sufficient coverage proportionate to our risk appetite/level.

Leverage insurance can also be considered as a form of mitigation for risks we cannot afford to have – but be very careful not to fall onto the trap of over-insuring ourselves especially for risks that we can easily afford to take, since over-insuring will just do more harm than good on our cash flows.

SI: Is there a niche form of insurance that you have considered purchasing?
G: No.

Read more from Gracie at ringgitfreedom.com

March 24, 2022
Covid-19 The Catalyst in Estate Planning

Passing your hard earned wealth to the next generation is not as easy as writing a will.

The Covid-19 pandemic which started two years ago still lingers on today, which has affected the planning of individuals and businesses in many ways.

As far as estate planning for one’s estate is concerned, the awareness on the need to do personal estate planning has been heightened. This can be demonstrated by the fact that many will-writing and trustee companies have reported a jump in their will-writing business in the past two years. The unexpected spike in deadly casualties due to the attack by the Covid-19 virus has rattled many who began to worry about their health and safety.

What is estate planning?

Estate planning is actually more than having your will written, though it is a basic instrument in estate planning. To put it in layman’s terms, you can say that it is a well-thought through planning process to ensure that your loved ones are protected, your hard-earned assets are preserved, and your accumulated wealth is perpetuated to more than three generations.

You have probably heard of this Chinese saying that goes “Wealth does not pass through three generations”. Interestingly the Americans have a similar saying, “Shirt sleeves to shirt sleeves in three generations”. These sayings show that estate planning is both necessary and crucial, especially for those who are on their way to, or have accumulated a fair amount of wealth.

Is writing a will estate planning?

Most people have the impression that having a will written is having done their estate planning. Water is essential for soup, but soup is more than just water. In actual fact, there are more legal instruments than just a will, such as a testamentary or living trust, a shareholders agreement, a Labuan foundation, life insurance and its use of nomination. Even an EPF nomination or a joint-account, planned intelligently is an instrument in estate planning.

Integrated approach to estate planning

Thus, there is a need to integrate all your estate planning instruments into a coherent estate plan. This is because the various instruments you choose must work together to address all your concerns in the event you depart from this physical world.

On top of that, your estate planning must also be able to handle the situation, though less likely, in the most tragic event that you and your beloved spouse were to perish at the same time, or die within a short span of each other. We have seen such tragedies occur during this pandemic.

Estate planning must be objective-driven

As the estate planning industry in Malaysia is still very product-driven, financial consumers end up with, and having being sold, a will or a bunch of fragmented products. The danger in such a scenario is that when the time comes, there will still be gaps that will not be covered by the products, and left the beneficiaries dangerously exposed.

To eliminate such a risk, your estate plan must be objective-driven. What this means is that your estate plan must achieve all your intended objectives when the time comes.

To help you think through and to write down your estate planning objectives, you can refer to the 3Ps model in estate planning – protect, preserve and perpetuate your estate.

3Ps model in estate planning

Your first estate planning objective must always start with protecting your intended beneficiaries. Their welfare and financial well-beings must always be highest on your list. This is especially true when you have beneficiaries who are under-aged, be they your minor children or grandchildren. Parents with special needs children must also pencil in this objective when they start thinking about what will happen to their special need child if and when they, as parents, predecease the children.

Secondly, you must set in your mind to preserving your hard-earned wealth if you were to suffer an untimely demise. The tragedies we know of during this pandemic among our friends, and actual incidents we read in the newspapers remind us that life is uncertain and no one is immortal.

Preserving your wealth means you take deliberate strategies to prevent your wealth from being poached by potential creditors. It also includes preserving your wealth from being destroyed or diminished in its financial value from potential business risks as well as unexpected professional liability exposure. You can imagine it as a financial tsunami that hits you when you least expect it. The business and work environments faced by business owners and professionals can be quite unpredictable, especially in the post-pandemic world.

Thirdly, you should plan in such a way that your beloved family members and descendants will be blessed by your hard-earned accumulated wealth beyond three generations. In this modern and IT-centric world, there are many potential risks of losing your wealth when you pass your wealth to the next generation.

We have seen some people’s wealth dissipated due to low financial intelligence of their descendants; and some lost through scams; business failures or in some cases through indulgence of their descendants. It is always wise to be extra careful when you do your planning. When it comes to planning your own hard-earn estate, it is expected of you to exercise the same standard of care.

About the author

Lee Khee Chuan is a chartered financial consultant (ChFC), chartered life underwriter (CLU), CFP professional, and Fellow, Life Management Institute (FLMI) USA. He is also a licensed financial adviser representative with more than 25 years’ experience in estate planning. To learn more, visit: www.estateplanningmalaysia.com

March 22, 2022
Personal Tax Relief for 2022

Remember to take full advantage of the tax reliefs available in filing your personal tax returns in 2022.

It is that time of the year where you need to fulfil your duty as a Malaysian individual if you are earning income.

E-filing with the Inland Revenue Board of Malaysia (IRBM) will only be available from March 1, 2021 and you must ensure that you submit your filing by April 30, 2022.

For individuals filing their tax returns, you have some personal reliefs that you can claim, such as personal tax relief, medical and insurance premiums paid during 2021.

Additional relief is available to further reduce your tax burden for caring for your parents, spouse and children.

Some changes were made to reduce some of the taxpayer’s financial burden and adjusting to life during the pandemic.

Image from https://twitter.com/LHDNMofficial/status/1473529533391196160

Tax reliefs for taking care of your parents

With a growing ageing population, many of us are required to care for our ageing parents.

It can be a privilege to spend time with an older parent. However, it is also a huge responsibility and takes a lot of time, energy and money.

If you are caring for an elderly or sick parent, you can get a tax break to help relieve some of your financial challenges.

Effective from the Year of Assessment (YA) 2021, the deduction on the expenses incurred by an individual for the medical treatment, special needs and carer for his parents is increased to RM8,000, an increase of RM3,000 from the previous YA.

The amount includes parents’ medical treatment, limited dental treatment such as tooth extraction, filling and scaling services as well as care services.

Expenses for caregiving include nursing home or home caregivers, including cost of foreign hired caregivers with valid visas or special work permits.

However, it shall not include tax payers and taxpayer’s spouse or children. Note that parents who are physically and mentally healthy who may receive such care do not qualify for this deduction.

Tax reliefs if you have children

Having children is costly, and to reduce the financial burden will encourage better childcare.

For each child below 18 years old, taxpayers can claim relief of RM2,000.

For children above 18, the taxpayer can claim up to RM8,000, with the condition that the child is studying or serving under tutelage in a professional trade.

In addition, if you have children up to age six who attend registered child care centres or kindergartens, you can claim relief of up to RM3,000 for the expenses incurred.

Since YA 2017, to support mothers in breastfeeding their young children, breastfeeding mothers can claim relief for the purchase of breastfeeding equipment (such as breast pump kit, milk collection and storage and cooler bag) with proof of receipt.

The relief is up to RM1,000 allowed in total and only claimable once every two years.

One special tax relief that parents should consider is savings for their children in the Skim Simpanan Pendidikan 1Malaysia (SSPN) account.

While the child reliefs mentioned earlier can only be claimed by one parent, the relief of up to RM8,000 for savings in SSPN can be claimed by both parents for their respective contributions.

This is provided that each parent has contributed a net deposit of the claimed amount, even for the same child. This relief has been extended a few times, and the latest extension is to YA 2022.

Reliefs available for self

Regardless if you have any such dependents or expenses, you are entitled to RM9,000 relief where evidence of expenses incurred is not required.

However, for the rest of the reliefs, you are required to provide supporting records.

Disabilities

To provide further support for those with disabilities, the government has granted added reliefs for the taxpayers.

Except for the purchase of equipment for disabled use, the rest of the reliefs given do not require proof of expenses incurred.

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That summarises the reliefs you can claim in filing for your individual tax return this year based on the latest personal tax filing information updated by the IRBM on January 20, 2022.

Remember to keep all receipts and supporting records where applicable for seven years, which you will need to produce in the event that the IRBM wants to do a tax audit on you.

March 14, 2022
The Importance Of Islamic Estate Administration

For Muslims, Islamic estate planning can be key for the smooth distribution of assets to heirs.

When a Muslim dies, the Islamic Law of Inheritance, namely Faraid, applies in respect of the distribution of the deceased’s estate. The main heirs entitled for his estate will be the father, mother, husband or wife, son and daughter. In other circumstances where there is no father or son, the siblings, paternal uncle or the child of paternal uncle, or Baitul Mal, will be entitled to the estate. The rights and portions of the heirs are protected and stated in al Quran, an Nisa’ verses 11 and 12. Those not under the above categories would not be entitled for the Faraid portion.

In term of legal ownership, the rights of Faraid heirs would not be automatically transferred. However, such rights and portions must be claimed and vested through the legal process, or the estate will remain frozen under the name of the deceased and would not be of any benefit to the heirs. For a person who dies without a wasiat, a representative of the deceased shall be appointed as an administrator of the estate with the agreement of all legal heirs. He shall apply for a court order, namely a letter of administration to empower him to administer the deceased’s assets and liabilities subsequently to distribute the assets to the rightful heirs after making payment of the liabilities.

Depending on the gross estate value, the letter of administration shall be applied at three agencies as follows:

i) Department of Director General Lands and Mines (JKPTG) if the value of the estate does not exceed RM2,000,000 consists of movable and immovable assets
ii) Amanah Raya Berhad for the movable assets worth not exceeding RM600,000
iii) The Civil High Court for the estate value worth exceeding RM2,000,000

In addition, the representative shall apply for a Faraid certification at the Syariah Court to ascertain who are the legal heirs and their share over the deceased’s estate. But for applications made at JKPTG, the Faraid certificate is not required.

“It is advisable for a Muslim to have proper Islamic estate planning for the purpose of expediting the administration and liquidation of the estate.”

Islamic estate planning instruments
In consideration of the above issues, it is advisable for a Muslim to have proper Islamic estate planning for the purpose of expediting the administration and liquidation of the estate, as well as planning for a fair and balance distribution based on the wishes and needs of the testator and his family. Wasiat and Hibah are the two main instruments to be considered when preparing the Islamic estate planning.

Wasiat
Wasiat is an essential part of estate planning. Having a wasiat provides some advantages to the testator such as appointing an individual or a trust corporation as an executor to administer his assets and liabilities for distribution to his loved ones upon his demise. With the appointment of the executor, the tedious and lengthy process of getting an agreement from all legal heirs for the appointment of administrator can be avoided.

Appointing a trusted and competent executor is crucial so the testator can rest assured that the administration and liquidation of the estate will be conducted smoothly in the proper manner and the rights of the beneficiary(s) are preserved. Unlike an individual, a trust corporation such as as-Salihin Trustee Berhad is a perpetual, competent, professional and governed under the Companies Act 2016, Trust Companies Act 1949 and Trustee Act 1949.

In term of distribution, the testator is permitted to bequeath one third of his assets to his intended beneficiaries who are not his Faraid heirs. Therefore, wasiat is a good instrument for distributing assets to an adopted child, non-Muslim family member, orphanage, or charitable organisation.

In addition, one third also can be allocated for sadaqah and waqaf for the purpose of getting rewards from Allah and his blessing in hereafter. The remaining two-thirds of the estate is to be distributed among the Faraid heirs. Faraid merely indicates the fraction of the heirs’ entitlement over the deceased’s estate as whole. This could result in the fragmentation of a property; for instance, if the ownership of a house is to be shared among many heirs such as father, mother, wife, son and daughter. Therefore, in his Wasiat, the testator may ascertain the manner of distribution.

In other words, he may give specific assets to specific heirs within his Faraid entitlement or he will provide the executor with wide discretion to sell the asset without the necessity of obtaining consent from the beneficiaries. From the proceeds of sale, distribution of the estate can be divided without much delay. In brief, the executor may use his discretion and absolute power to execute the testator’s wishes provided that the wishes do not contravene Syariah law.

Hibah
Hibah is a gift made by a donor to a beneficiary(s) during his lifetime and effective immediately upon the setting up of the hibah. The hibah asset is not considered part of the donor’s estate and is not subject to Faraid. Of equal importance, hibah is used for distributing the asset to intended beneficiaries and avoiding fragmentation of the property. It is the most suitable estate planning instrument for a couple without children or only a daughter, a reverted Muslim, or a couple with a minor or special child.

Business owners may consider hibah in a business succession plan to ensure the continuity of the business. Allowing the business to be run by all Faraid heirs and inexperienced heirs may lead to serious disruption or dispute within the management of the company. Thus, deciding on the right and capable candidate for taking over the business is a must as it can help to create a smooth transition and management of the company upon his demise.

In conclusion, by drawing up an Islamic estate plan during his lifetime, the testator may determine who will be given the mandate to administer his estate and the manner of distribution of his assets upon his demise for the benefit of his family’s well-being.

Article by : Amna Fazillah binti Ismail, Chief Business Officer of as-Salihin Trustee Berhad.
as-Salihin Trustee Berhad offers full-fledged Islamic Estate Planning products and services such as Wasiat writing, declaration of Hibah, jointly acquired asset agreement, takaful trust and living trust.

January 27, 2022
Financial Planning: Things to Do After a Flood
The 2021 year-end flood which affected many areas nationwide surpassed all previous year’s floods within Malaysia. These has financial implications on the lives of our fellow Malaysians. For those affected, here are some ideas on how to pick up the pieces and build resilience moving forward.

1. After the flood – restarting your life

Consider the immediate aids you can leverage on to restart your life and get back on track. These can come in the form of financial, food, or accommodation aid, life essentials such as clothes and household items, or even transport arrangements for stranded individuals.

2. Get your mental health in check

Be sure to stabilise your frame of mind and check your stress level. There are a number of free services and apps such as:
- Talian KASIH (8am – 5pm daily 15999, WhatsApp 019-261 5999)
- Naluri (03-8408 1748, 24 hours, English, Malay and Mandarin)
- Selangkah – Selangor Mental Sihat (SEHAT)
- MySejahtera (Digital Health > Minda Sihat)
3. Gauge your financial situation

Once more urgent and pressing matters are taken care of, you can now take stock of your current financial situation. Ask yourself:
- What are my losses?
- What are my family incomes?
- What are my monthly commitments?
- What are my debts?
- What is the position of my current investments and savings?
- What is my protection coverage for my life and assets (takaful/insurance for personal and workplace)?
These questions will help you paint a picture of your financial situation and will quickly bring up areas of concern (if any) which you can focus on as you look to recover.

4. Salvaging assets from flood damage

The next step is to consider your current assets. Firstly, assess damage to items within your household. Check if you have household insurance and if yes, whether it covers special perils or not.

Assess damage to your vehicles, and be sure not to start them as the electronic system will short-circuit; get tow trucks to haul it to a workshop. Depending on the make of your car, the repair cost may range from RM4,000 to RM10,000.

Other things to consider:
- If you are working from home, is your laptop and handphone provided by your company? Do you need to report up or make a police report?
- Are your important documents destroyed?
- Do you need to replace NRIC/birth and marriage/divorce certificates at the Registration Department, driving licence and road tax at the Road Transport Department (JPJ), and school certificates from the respective schools?
5. Stay safe and healthy

In such trying times, keeping healthy may be the last thing on your mind but it is very important that you do your best to follow Covid-19 standard operating procedures (SOP) by getting help from NGOs and volunteers for masks and hand sanitisers.

Be wary of water-borne diseases such as typhoid, cholera and dysentery and use water-purifying tablets if you are unsure if the water is safe for drinking or you do not have access to clean water. Follow the dilution instructions that comes with the tablets.

6. Rebuild your financial status

The information in point (2) above is important to guide you on your next steps. You may seek help from:
- Agensi Kauseling & Pengurusan Kredit
- A licensed financial planner at SmartFinance.my where you can talk to an expert
Be on the lookout for scammers; they are heartless and only want your money. Only accept help from reliable sources. When in doubt, err on the side of caution!

7. Preparing for a future flood

The financial challenges you face today is the basis of your emergency fund for the future. Therefore, it is crucial to start building one when you can. Transfer some of the risks to your protection coverage and tap into your network of friends or relatives that you and your family can stay with.

Flood-proof your home and/or prepare your evacuation SOP and equipment (torch lights, inflatable boats, dry food, bottled water, charged power banks, clothes, blankets and toiletries in waterproof bags, disposable wares and bags). Be constantly alert of your surroundings. Chances are, it may be difficult to sell your home and move to another so you may need to continue staying in your current place.

Review how you place your furniture and appliances. Some homes put them on platforms that can be jacked up to desired heights (granted, if water level too high, it can render platforms useless). Store critical items in waterproof boxes when the rainy season approaches. It may also be prudent to check if you can convert your rooftop to an emergency accommodation equipped with the evacuation items listed above?

My heart goes out to all flood victims. We are fortunate there are volunteers and NGOs that we can contribute to, who will organise, mobilise and distribute contributions to as many victims as they can. I hope the above is useful to those affected. May you have a respite from your situation and the strength to ride through this tough times.

This article is contributed by Linnet Lee, CEO of the Financial Planning Association of Malaysia (FPAM).
January 10, 2022
Takaful Malaysia Launches Nation’s First Flexi Motor Takaful Plan with Pay As You Drive Daily Cover

Syarikat Takaful Malaysia Am Berhad (“STMAB” or “Takaful Malaysia”), the general takaful arm of Syarikat Takaful Malaysia Keluarga Berhad virtually launched Takaful myClick Motor FlexiSaver, the nation’s first flexi motor takaful plan with Pay As You Drive daily cover. Jointly organized by Takaful Malaysia and technology partner, Fusionex, the virtual launch was officiated by Dato’ Mohammed Hussein, Chairman of Syarikat Takaful Malaysia Keluarga Berhad.

“Virtual launch of Takaful myClick Motor FlexiSaver signifies Takaful Malaysia’s unwavering commitment to driving product innovation and delivering superior customer value. Flexible protection plans are the future of the insurance and takaful sector. Offering insurance and takaful products in the new mobility space that are simple, flexible, and usage-based is revolutionising the industry. This means, consumers have the option to decide and pay for just the coverage they need, as and when they need it. With more people driving less these days, while some may face financial challenges due to the impact of the COVID-19 pandemic, Takaful myClick Motor FlexiSaver is the best option that suits the financial and protection needs of those who drive infrequently or own several cars and want to save more on motor takaful or insurance plan. The Pay As You Drive daily cover available under this plan is ideal and rewarding, as we give customers the flexibility to activate it the day before they want to drive and will only be charged for the days they drive. Suffice to say, Takaful myClick Motor FlexiSaver is a quick win for customers to enjoy great savings and peace of mind when they drive,” stated Dato’ Mohammed Hussein, Chairman of Syarikat Takaful Malaysia Keluarga Berhad.

Takaful myClick Motor FlexiSaver is an online motor takaful plan that provides one-year coverage for loss or damage to your vehicle due to fire or theft, as well as third party bodily injury, death, or property damage. Offered through Takaful Malaysia’s online sales portal and Click for Cover mobile application, this plan provides a 24-hour roadside assistance program for unlimited breakdown towing service and minor roadside repairs, including tyre change, fuel delivery, battery change, and jump start. Featuring Pay As You Drive daily cover for accidental damage to your own vehicle and complimentary personal accident coverage of RM15,000 for the driver and all passengers as well as accident towing, Takaful myClick Motor FlexiSaver also offers add-on protection options for windscreen, personal accident, and key replacement. Customers can also enjoy an instant 10% discount when applying the base plan of Takaful myClick Motor FlexiSaver, and when activating Pay As You Drive daily cover.

Chief Executive Officer of Syarikat Takaful Malaysia Am Berhad, Mohamed Sabri Ramli said, “In our continued efforts to meet ever-changing consumer expectations, and in line with the rapid pace of digital expansion in consumer purchases, it is timely that we introduce Takaful myClick Motor FlexiSaver with Pay As You Drive (“PAYD”) daily cover to better serve our customers with innovative takaful solutions while preserving consumer choice. The PAYD is the key differentiator, a unique feature that sets us apart from other motor insurance and takaful plans available in the market. Customers only need to sign up for the base plan of Takaful myClick Motor FlexiSaver via our online sales portal or Click for Cover mobile app, before activating PAYD through the mobile app. Eventually, we want to make it easy and hassle-free for customers to enrol in this motor takaful plan online, corresponding to our digital strategy to enhance product and service accessibility.”

“Takaful myClick Motor FlexiSaver with PAYD not only provides a simple online application process along with an array of benefits and services offered to customers but also diversifies Takaful Malaysia’s product offerings and creates a value proposition for consumers at large. Takaful Malaysia’s strategic move to introduce this motor takaful plan will provide new revenue and value-producing opportunities for the company to stay ahead of the curve and remain competitive in the motor insurance and takaful market,” added Mohamed Sabri Ramli.

Dato’ Seri Ivan Teh, Group Chief Executive Officer of Fusionex said, “Insurance, at its core, is a business that underwrites risks and helps people in times of need. As such, I applaud Takaful Malaysia for revolutionizing their offerings and empowering their customers to take more control over how they purchase insurance. As a long-term and fully-supportive technology partner, Fusionex pledges to lend our experience, expertise and cutting-edge technology to drive excellent user experience for Takaful Malaysia’s customers, and this partnership continues to innovate with the launch of Malaysia’s first pay-as-you-drive motor insurance.”

“Together with Fusionex, which specializes in analytics, big data, and artificial intelligence, we leverage digital and social media platforms to actively promote this product. Ultimately, we want to ensure that our business is competitive and relevant to the growing consumer demands, particularly the tech-savvy generation. By embracing technology and digital tools to offer differentiated product offerings and services, we will be able to reach new customer segments through superior protection products and customer experience,” said Mohamed Sabri Ramli in conclusion.

Takaful Malaysia was recently voted once again by Malaysians as the Best Motor Takaful Company in Malaysia for 2021/2022. The annual award clinched by Takaful Malaysia is based on the results of the online survey conducted by iBanding, an independent, knowledge-based company that provides transparent insights about the local insurance and takaful industry that ranks insurance and takaful companies in Malaysia according to the actual feedback from survey responses among motor vehicle drivers.

October 28, 2021
How to Choose the Right Investment Vehicle for Yourself?
“Soo Yee, I saw someone on Instagram saying that stock investment is better than unit trust investment. What is your view?”

This is one of the questions that I get from my client on investment.

Everyday, we are bombarded by a myriad of information on social media. It’s especially important to process the information, rather than consuming it blindly. How can you take up a piece of investment advice from someone who does not understand your financial situation as a whole? Does the mentioned investment vehicle suit your investment plan?

Is stock investment really better than unit trust investment? It depends. Stock investment might be good for that person, but it is not necessarily good for you.

When it comes to investment vehicles that suit you, there are many factors to consider. Here are some of the questions to ask to find your preferred investment vehicle.

1. Risk level of the investment
- Is the investment low, moderate or high risk?
- Does it match your risk appetite?
2. Capital needed to start investing
- Does the investment require low or high capital?
3. Investment lock in period
- Is there a lock in period for your investment?
- Is the investment easy to sell?
4. Guaranteed element of the investment & its income tax implication
- Is there a minimum guaranteed return for this investment?
- How does this investment affect your income tax?
5. Other considerations on the investment
- Do you enjoy handling property management?
- Do you enjoy spending time doing stock research & analysis?
- Are you skilled in stock picking or do you prefer getting professional fund managers to manage your investment?
There’s a multitude of investments available, so here are five of the more common investment types for your reference:

If you’re a business person (without EPF contributions) and concerned about payable tax, some of the investments that can be considered are EPF and SSPN. Both EPF and SSPN will help to reduce your payable tax.

If you’re a person who doesn’t have time or enjoy doing stock research & analysis, perhaps you can look into unit trust investment that leverages on professional management to invest your hard earned money.

In short, a suitable investment vehicle for you should be tailored to your financial situation as a whole. If you’re clueless about your investment planning, you may consider investing in a licensed financial planner. A licensed financial planner will be able to look at your whole financial landscape and advise on the right investment vehicles to help you to reach your financial goals.

About the author

Kuah Soo Yee is a Licensed Financial Planner (CFP) who is passionate about helping people make sound financial decisions and achieve their financial goals, and recently launched her own app. Her personalised strategies and advice have helped many to gain better clarity and take firm control of their financial future. She can be contacted at soo.yee@ipp.com.my

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October 7, 2021
What Is Your Money Mindset?
This is the first part of this six-part series, where these topics will guide those who have just started to work or have just started their journey to build a strong financial foundation. Before we set out to achieve anything, it always starts with our mindset.

How do you know what your money mindset is? It’s how you feel about and view money. It helps to form your decisions on how you manage money by saving or spending it. How you believe money can work for or with you, will decide how you live your life in the future. Every single day, you’ll make many small decisions that will push you forward financially or set you on a reverse course; it’s entirely up to you!

Some of the great money mindsets are listed below:
- I have the ability to spend but I also empower myself to say “No”
- Everyone has their own path and I have mine
- Achieving financial goals are possible when I work towards them
As Henry Ford said, “Whether you think you can, or think you can’t – you’re right.”

Here are three ways to improve your money mindset:

1. Money is a tool, not a goal

Think of money as the fuel to your car. Is fuel considered the destination or is it one of the raw materials needed by your car to bring you to your destination?

If your answer is the latter, that’s correct! We exchange our time, energy and skills to earn money to buy us the things we need or want. Through your various life experiences, you may think that money is the answer to everything, but this isn’t true if you don’t know how you would like money to help you in life.

When you start seeing money as a tool, it’ll help you think about what your actual goal is. A simple goal could be living a life filled with fun and joy, where you enjoy travelling and eating – this will require money in order for you to fulfil this goal.

As you start setting goals for yourself to aim for, they also provide a purpose for your money to work on and naturally, you will start allocating your money to where it should belong.

2. Money needs to be managed

Did you know that most winners of the lottery actually end up losing all the money they won and go bankrupt in a few years? This is hardly surprising because if a person doesn’t know how to manage RM1,000, then they will definitely not know how to manage RM10,000. The same logic also applies to you. If you work smart and hard to earn the money you have, why not take the initiative to learn how to manage, allocate and save your money?

You can set up a few accounts to save and segregate your money. For starters, these could be a savings account, fixed deposit and money market. Although these accounts may not serve as long-term wealth builders, you can use them to practice saving what you earn. When you continue practicing this, it then develops to become a habit.

Assume your total take home pay for the next five years of working is RM200,000. How much do you think you would like to keep from this amount? Would you like to save RM20,000 or RM40,000 or even more? What you want to save entirely depends on you.

3. Using money is like two sides of the same coin

The “opportunity cost” or “trade-off” is defined as the loss of alternative choices when you make a decision on how to use your money. This is the same thing that happens if you flip a coin – it either lands on heads or the tails, and never on both sides.

For example, let’s say you decide to save RM10,000 every year from your take home income of RM50,000. By saving this RM10,000, you gain additional money in your savings account. However, you may miss out on having more fun by travelling, purchasing new gadgets, or buying new furniture that you might want to have.

Before making any decisions regarding money, learn to think about the potential opportunity cost or trade-off that you have to make. Will it be something you’re willing to miss out on? Would the trade-off matter in the years to come? Would your decision help to build the life that you want in the future?

If the decision isn’t urgent and involves an amount of money that’s a lot to you, and you’re not comfortable making it, then don’t. There is no harm in pausing and thinking through or seeking opinions from the financial planners that you know. For all you know, you may have just saved yourself from future troubles if the initial decision goes against you.

Finally, improving your mindset isn’t a “been there, done that” type of destination. It’s a continuous effort to enhance and practice, just like how we build our body muscle, otherwise our body muscle will slowly turn into…body fat.

Stay tuned for my next topic in this series!

About the author

Fong Woon Bing is a licensed financial planner who has coached, improved and broadened the mindsets of many people whom he works with, bringing them closer towards achieving their life and financial goals. He can be contacted at fongwoonbing@vka.com.my
August 13, 2021
Tax Obligations For Self-Employed Entrepreneurs
With the rise of self-employed entrepreneurs, here are some tax compliance obligations and common oversights.

There has been a dramatic growth in recent years on the number of self-employed entrepreneurs in Malaysia. From 2017 to 2018 alone, this number increased from 2.57 million to 2.86 million, an increase of 11.3% (source: Department of Statistics, Malaysia). In 2018, the self-employed are the second largest category (19.3%) in the Malaysian workforce out of a total of 14.8 million working adults.

Malaysia adopts a self-assessment system where taxpayers are responsible to determine their own tax liability and to submit their tax returns accordingly. As the number of self-employed entrepreneurs continues to grow in the Covid-19 economy, it is important for the self-employed to be aware of one’s tax obligations especially in the area of tax compliance. Failure to do so could result in penalties and additional tax payable.

A self-employed person is an independent contractor or a sole proprietor. The self-employed consists of sub-contractors working in the trades or construction sectors to professionals such as doctors, lawyers, accountants, engineers, and management consultants. Recent iterations include freelancers working in the commonly named “gig economy” (such as e-hailing drivers).

Here are some tax compliance obligations a self-employed individual should take note of:

1. Registration of Tax Identification Number (TIN) and submission of tax return

A self-employed individual should register for a TIN when the person has taxable income which exceeds a threshold of approximately RM28,000 per annum. A TIN can be registered at the nearest Inland Revenue Branch (IRB) branch or via e-Daftar at the IRB website.

For entrepreneurs running a business, the income tax return (Form B) will need to be submitted by 30 June the following year (eg. Form B for the year of assessment 2020 is due by 30 June 2021*extended to 30 September 2021 due to Government movement control, IRB website)

2. Estimate of Tax Payable

Under the Malaysian tax regime, a taxpayer pays income taxes on a “Pay-As-You-Earn” basis. Where an individual taxpayer receives other than employment income, the IRB may issue a Form CP500 setting out the estimate of tax payable under an instalment scheme. The Form CP500 is determined based on the tax liability of the previous year. What should you take note of:
- The tax estimate is six (6) bi-monthly instalments commencing from the month of March every year.
- Each tax instalment payment needs to be made within 30 days from the due date.
- The remittance slip (Form CP501) should be submitted together with the instalment payment.
- Should there be a need to revise the tax estimate which affects the instalment amount, you must submit Form CP502 to the IRB not later than 30 June each year on the revision payments. The IRB will issue a Form CP503 if the application is successful.
- The penalty for late payment of 10% shall be imposed on the unpaid amount if the tax instalment payment has not been paid within 30 days from the due date.
- Where there is a difference between the revised tax estimate submitted and the final tax liability which exceeds 30% of the tax payable, the difference will be subject to a penalty of 10%.
The following illustration shows the impact when an estimate of tax payable is inaccurate.

3.Employer’s Responsibilities

As an entrepreneur, you might hire employees to expand your business. In this case, you will be considered as an Employer for tax purposes. The responsibilities of an Employer are as follows:
- The Employer is to inform IRB of any new employees within one month from the date of commencement of employment.
- Submission of Return of Remuneration by an Employer (Form E) to the IRB on or before 31 March each year. <continues…>
[ You may read the full article HERE ]
August 5, 2021
How COVID-19 Affected Our Favoured Investment Themes

Schroders identifies eight themes that could transform the world, but how are these being affected by the coronavirus?

At the core of thematic investing at Schroders is the belief that the most powerful and persistent investment themes are those where human ingenuity ignites innovation to address imbalances in the world. These imbalances may be between populations and resources, or between supply and demand in individual industries.

As we all know, necessity is the mother of invention. As coronavirus throws the whole world into turmoil, humanity’s ingenuity and powers of innovation are being mobilised to fight the disease, care for our populations and adapt our work and home lives to a new set of economic, political and social realities.

Covid-19 is exacerbating existing tensions between populations and finite resources and dislocating supply and demand relationships in countless industries. Bearing this is mind, we examine the impact of this crisis on the eight investment themes that we think have the potential to transform the world we live in:

1.HEALTHCARE INNOVATION

“Crisis highlights importance of healthcare innovation”

This pandemic underscores the critical societal importance of healthcare innovation as countries seek to prevent and cure disease while wrestling with ongoing demographic and budgetary challenges. Central to our investment thinking in this area is the belief that science and technology will be crucial as companies harness data, computing power and medical knowledge to meet these goals.

We believe this will drive further breakthroughs in advanced therapies, medical technology, and healthcare services as well as in digital healthcare where technology in the form of ‘telehealth’ has shown its worth during this crisis as a means of making healthcare provision more responsive and efficient. As governments realise their vulnerability to pandemics, the drive to spend more on healthcare in the future can only intensify.

2.SMART MANUFACTURING

“Smart manufacturing essential as demand fluctuates”

Amid the acute demand and supply shock experienced by the global economy, manufacturers are also having to innovate. We expect to see companies developing local supply lines alongside their existing global networks while investment in data analytics will be imperative as a means of understanding and managing volatile demand and disrupted procurement in the future.

Investment will also take place in other smart manufacturing themes, including advanced manufacturing such as 3D printing, automation in the shape of robotics, sensors and controls, and advanced materials like lightweight composites as companies harness exciting innovations in hardware, software and materials to deliver greater agility.

While manufacturers face undoubted short-term headwinds, the disruption caused by Covid-19 demonstrates the importance of manufacturing innovation to ensure responsiveness and productivity in both good times and bad

3.CHANGING LIFESTYLE

“E-commerce and well- being are growing lifestyle trends”

[…continue to read this full article HERE ]

August 4, 2021