Category: Protect Your Wealth

My wife and I are both accountants. We have two children, one of them is a child with special needs. I’ve always known the importance of getting our family’s financial planning done, but never quite came around to it due to our busy schedule.

We were lucky to have met Pauline, our Financial Planner. She was interested in finding out our goals and how she could help us to achieve them. After taking the time to understand us, she helped us in assessing where we are now and what actions we need to do in order to achieve our goals. She helped us to come up with our financial plan.

I’m very happy that we engaged Pauline for her services. Truth be told, it is actually a tedious process to get the plan done. It requires perseverance and knowing how to go through each of the steps. Luckily, with Pauline’s help, she guided us through it and gave us the options and suggestions which helped us a lot during our financial planning journey.

Once we have completed our financial plan, we now know our financial standing, and what our spending is like. When we first saw our cash flow, we were surprised that we have been running a deficit. Within a month, Pauline helped us to identify the key areas which can be improved.

Through financial planning, we also realized that some of our insurance plans did not match with our family’s needs. Pauline was non-biased and was very objective in her advice to us. She helped us to streamline and optimize our current policies to meet our objectives. With this, we are able to save a substantial amount of money on insurance premiums alone.

Pauline also helped us with our estate planning. We initially had our Wills and Trust drawn up. After reviewing it, we realized there were many areas that were left hanging and no longer matched our needs. Pauline highlighted the areas which we never considered before and it was extremely helpful for my wife and me to consider restructuring our Will and Trust.

This was especially true for our special needs child. This area has always been a major concern for us as we want to ensure that both our children are taken care of, in the event something happens to us.

I’m glad we did our financial plan with Pauline. Once you are her client, she puts your interest first and lets you know the best way to manage your finances even if it means she’s not going to get anything out of the recommendation.

This is what I call “professional” and doing her business with “passion” and “from the heart”. She is also very detailed and tactful on how best to resolve the issues by giving us options for us to consider.

The best thing about getting my family’s financial planning, is that me and my wife are clear on what our needs are and how much we need to save to achieve our goals. We no longer need to second guess like before. After going through this process, I feel that having a financial plan is very important. Especially if you have a family to take care of, or if you are unsure whether you are saving enough for the future.

About the Author

Pauline Teoh loves to coach busy professionals to achieve their financial independence. She is a Licensed Financial Planner, Childpreneur Coach and is an expert in Risk Management, Investment Planning and Estate Planning

“Losing your loved ones is tough, but having a financial planner in your life does help”

I am Monica, a widow aged 52 years old. I came from a poor family and didn’t know anything about finance or money management when I was growing up. I have been working hard with my late husband Andy, in the trading business for the past 20 years and we managed to grow our assets along the way.

Initially we thought that buying a simple life insurance is all there is to financial planning. That was until I was introduced to Stanley back in 2013.

We were skeptical and delayed our meeting with him as we thought he is another salesman coming over to sell financial products. I am a person who does not believe in investment and financial planning. Instead I believed that holding cash is the right thing to do.

Stanley spent many hours meeting us and patiently listening to our financial concerns. He is then able to understand and identify our life and financial goals. Stanley shows the financial pitfalls that we are facing and help us to visualize our cash flow and net worth at that time, while being able to identify our financial gap and estate planning concerns on multiple different scenarios.

After his careful review, he restructured our existing insurance portfolio and managed to increase my late husband’s insurance coverage substantially from what we have based on our limited cash flow. His integrity and process-oriented independent review, and ability to access all types of financial products in the market really impressed us.

Stanley also advised us to set up a complete testamentary trust in our will for resource preservation. Using resource liquidation strategy, we are able to avoid estate shrinkage and potential resource squandering by anybody who is not good at financial management. I am fortunate to follow the advice from Stanley which makes the estate execution process very efficient.

My husband was diagnosed with terminal cancer in 2017 and passed away a year later. Stanley did a good job with timely and efficient claims process. I was able to sail through the difficult period smoothly. He even visited my late husband almost every week in the hospital and accompany us until his last breath. Some of the big insurance policies that we bought a few months before the diagnosis date, Stanley is able to help us claim the insurance payout within a short period of time.

Our family benefited a lot from the insurance payouts. We managed to pay off our mortgages and ensure that our children’s tertiary education is fully funded. Our life and dignity is improved by using the resource optimisation strategy recommended by Stanley on a conservative money management. I am holding a well-diversified investment portfolio and received timely fixed payment to cover our living expenses. We are also being updated regularly on the market’s movement.

I am glad that Stanley is also able to provide my children with solid financial knowledge. Now all my children have graduated and they are back at my company to help me run the business. Stanley also provided my children with tips on business resource optimisation strategy to weather the pandemic and it has helped us tremendously.

I am comfortable knowing that we have a financial peace of mind under Stanley’s good hands. We are very much on track to achieve our family’s financial goals!

About the Author

Stanley Hon is Practice Group Director at FA Advisory Sdn Bhd. He is a Licensed Financial Adviser, MDRT & Speaker, Will & Trust Specialist.

How can you determine your insurance requirements for better financial risk management?

We often encounter young members of the workforce looking to embark on their financial planning journey with a simple life insurance coverage. This move should be lauded as it makes a lot of sense to play defense before offense, so to speak. To kick start the conversation, the question of affordability will inadvertently crop up – how much can you afford to pay? While this is a practical approach for young career starters, is there a more optimal way to determine your insurance needs for better financial risk management?

Before sharing some thoughts on risk mitigation needs that should be addressed by leveraging on insurance tools, perhaps it is best that I briefly touch on the types of life insurance coverage that individuals can consider.

The most basic is to address concerns in the event of death. The idea is that should financial dependents and family members face a premature or untimely departure of a main breadwinner, there will be a financial payout to help the next of kin recover from this setback by ensuring that living expenses and financial commitments can continue to be met with minimal disruptions for an extended period thereafter.

Related to this is the need to provide financial relief if the breadwinner is still alive but no longer able to generate income due to a total and permanent disability (TPD).

In this scenario, funding is required to replace the revenue of the income earner while also considering any additional living expenses that can arise due to the disability.

The third area is for critical illness (CI) needs where a lump sum is paid to the insured if there is a diagnosis of a covered serious illness. This payment can be used to fund non-hospitalisation related medical expenses as well as rising living expenses to aid a faster recovery.

It is no secret that medical inflation is rising rapidly. The escalating medical costs and the fact that life expectancy is prolonging means that it is more important now than ever to have our own hospitalisation & surgical (H&S) coverage (also known as medical card). Lastly, we are also exposed to the risk of all forms of accidents that might partially incapacitate us for a short period or permanently. Personal accident (PA) coverage provides payment for accidental related risks.

Having an appreciation of these five types of coverage will enable us to address our personal risk management need through insurance planning more comprehensively. However, as alluded to earlier, trying to address these areas based on affordability alone might give one a false sense of having effective risk mitigation in place.

So how then should one go about calculating the more accurate amount of insurance coverage for the respective funding needs?

1. Family Income

Family income refers to the amount of money required to provide sufficient levels of funds to surviving financial dependents, so long as they remain financially reliant on the breadwinner. This will need to cover expenses such as living expenses for the whole family including dependent parents (ideally until the youngest child reaches the age of 25 and for nonworking spouse for their remaining life expectancy), education fees and related costs for minor children up till tertiary education and insurance premiums for family members.

It can include funeral expenses and estate administration costs of the deceased also. The sum of these costs will give you a more precise indication of the amount required for death insurance coverage.

2. Income Replacement

This refers to the need for funding if one is no longer able to work due to TPD and is calculated based on how much expenses are incurred in a year for normal living expenses. In the ideal scenario, the calculation should be from now till one’s life expectancy. However, this could be a tall order for most people, particularly young employees, as such a simple guideline is that TPD coverage should amount to at least five years of income or until one’s retirement age (assuming that one is able to fund retirement expenses separately).

3. Debt Cancellation

For those who have outstanding loans, especially a mortgage on the family home, or any other loans, this may reduce the amount of money the family will receive and should be considered. Some clients will expect investment properties to be sold while others would prefer to transfer the assets to their loved ones free from encumbrance.

As such, depending on your wishes, you should consider the loan cancellation needs to ensure that your estate has sufficient funds to pay off these loans as well as providing the required funding for the family. You have the option to self-insure (if there are sufficient assets to settle the loan) or transfer that risk to the insurance company. The sum assured needed can be provided for utilising potentially cheaper products such as a term insurance policy over the outstanding loan period.

4. Critical Illness

If you are diagnosed with CI, you may need to stop work temporarily to undergo the necessary treatment and take a break to have a successful recovery. If you need to cover your living expenses during the recovery period due to concerns over non-covered medical expenses or higher cost of living, then CI funding will help to defray these expenses. To ensure that you are not over-paying in premiums for this need, you can use the rule of thumb to providea sum assured of between 3-5 years of your current annual income.

5. Medical Expenses

As mentioned earlier, medical costs particularly for private hospitalisation needs is rising. While one can depend on public hospitals for treatment, it is better to have alternatives via the private medical route. We do have some clients who work with multinational companies providing comprehensive medical card coverage and question the need for their own medical card.

However, our advice is always to obtain your own medical card early so that the premiums are lower while you are in better health. Purchasing one only upon retirement may make you ineligible (due to pre-existing medical conditions) or having to pay a hefty premium due to your age or loading due to medical factors. Ideally one should have a medical card providing a room and board of at least RM200 with an annual medical limit of minimum RM1 million and no lifetime limit.

6. Personal Accident

Lastly, one should also have coverage for the risk of accidental injury, TPD or accidental death which may not be covered by the above policies. It does not help that the statistics do not favour the young – a higher percentage of youths meet with accidents resulting in the inability to carry on employment, permanent disablement or even death.

One should not only rely on payment from SOCSO for accidental claims as there are terms and conditions to be met. Often forgotten (as they are rarely sold due to low premium costs), PA policies are generally very cost effective especially with the attractive renewal bonus offered. Similarly, you can use the guideline of providing a sum assured of between 3-5 years of your current annual income for this need as well.

In summary, the path to having the right insurance coverage is indeed a balancing act of sorts. Too much, and you might make it more daunting to save and invest to achieve your desired financial goals. If you are underinsured, then you or your dependents might be in a financial quandary. So good on you for getting the ball rolling by purchasing insurance policies based on what you can currently afford as a
fresh member of the workforce, but do recognise that you will need to review your needs over time to ensure that you have an effective financial risk management plan in place.

About the author

Felix Neoh CFP CERT TM is the director of financial planning at Finwealth Management Sdn Bhd and can be contacted at enquiry@finwealth.com.my.

We at Smart Investor and Finwealth is committed to help you better manage your financials. Get a free consultation from an expert by filling in your details here: https://www.smartinvestor.com.my/SIxFinwealth

We speak with financial planners to get their advice on what people at different stages in life need for insurance coverage.

If you think about your circle of family and friends, there is a good chance that you will know someone that works in insurance. But for a product that is seemingly ubiquitous, the numbers paint a different story.

In 2020, Life Insurance Association of Malaysia (LIAM) president Loh Guat Lan revealed that almost half of the country does not have life insurance, while the National Health and Morbidity Study conducted in 2019 by the Ministry of Health (MOH) showed that only 54% of Malaysians have health insurance coverage.

Apart from reasons of affordability, many do not have insurance simply because they do not see a need. However, this can be a dangerous mindset to have as it does not offer a safety net in the event of  unfortunate accidents or peril. After all, it is likely that anyone will go through life and come out completely unscathed.

Here is what three financial planners have to say about the types of insurance you should be looking to get:

What Insurance Should You Get In Your 20s?

This is the time when most people are settling into life as working professionals, often in their first job. Earning income for the first time can be a thrill, and with disposable income to spend on clothing, dining, hobbies and more, it is no wonder that insurance can often be the last thing on their minds.

“I often tell younger clients and friends that the first insurance one should get is a health insurance, or commonly known as the medical card,” says Marshall Wong, a licensed financial planner at FA Advisory.

“A health insurance covers the hospitalisation bill that may cost more than one’s annual income.”

He adds that personal accident insurance is the second most important insurance that young working adults should seek out, given that traffic accidents are the fourth-highest cause of death in the country according to the Department of Statistics Malaysia.

Although a life insurance policy will usually cover accidental death, he notes that the premium for such coverage is “a lot higher” than insurance for personal accidents.

“Young adults may not be able to afford an adequate coverage,” he notes, with this being the reason why personal accident insurance is important.

Although having insurance is always important, Wong acknowledges that many of today’s youths may be of the mindset that it is unnecessary given their age. He warns that a lack of insurance could potentially lead to financial ruin if an unfortunate event occurs.

“Young adults need to know that not all insurance is expensive, and not all insurance agents are out there to take their money,” he advises.

“There are plenty of affordable insurance that may be suitable for them. If you cannot afford an investment-linked medical card, you may opt for a stand-alone medical card. The standalone medical card may not have as many features as an investment-linked counterpart, however, it may cover the basic necessities, and it may cost 50% lesser!”

When quizzed about niche forms of insurance, Wong says that it is more important for young adults to “stay nimble” rather than opting for unnecessary protection.

“Hire a fee based financial planner to go through your financial position as the exit cost of some insurance products can be very high,” he suggests.

What Insurance Should You Get In Your 30s?

By this time, most people should be well-established at work and have built up a solid base in terms of finances. This is the period in which many start taking on more financial responsibilities and assets. So where does insurance factor into this?

“In your 30s, your financial status is likely to be more stable,” says Pang Wan Khim, a licensed financial planner with VKA Wealth Planners.

She recommends a life insurance policy for those who do not have one at this age, as most people will have plenty of bills and commitments to pay down, such as cars, houses, and even marriage.

“With many financial responsibilities, and good health likely still on your side, you should get a life insurance policy to protect your loved ones’ future from life’s uncertainties,” she says.

Such policies pay out a lump sum of money to beneficiaries in the event of premature death. The idea is that death benefit should be sufficient to replace future income loss especially if you have a spouse who solely relies on your income. The total amount will cover the expenses and obligations outstanding such as funeral costs, medical expenses, debts, children education or living cost for your loved one.

“This gives your family financial continuity so they do not have to struggle and have more time to structure the financial status or fill the financial gaps,” explains Pang.

With most people in this age bracket acquiring assets like property, vehicles, and businesses, the upfront cost usually takes decades to accumulate. This is where financial assistance from banks come into play, with loans usually taken to acquire these assets.

“But as a borrower, if you pass away, all the debts will still need to be repaid in full by your estate,” she warns.

“Life coverage plays a crucial role in this situation and most people tend to overlook this when planning.”

She also believes critical illness insurance is very important as it helps to cover insufficient limits on hospitalisation plans as well as costs not covered on such plans, as well as non-medical costs like nurse care, transportation expenses, income replacement, medical equipment or even time off while recovering.

Although she is recommending guidelines for those in their 30s, Pang believes that insurance should be bought as soon as you can afford it, regardless of age. It goes without saying that the best time to buy is also while you remain healthy, but ultimately, these are just best-case scenarios as life is not the same for everyone.

“My general recommendations will not work for everyone because our situations are unique and financial statuses are different,” she observes.

Pang also recommends investment-linked insurance because most people tend to be busy with work and family, and it provides flexibility and peace of mind. With the cost of insurance generally increasing, she suggests using some of the investment proceeds to cover this increase in later years.

“The design of this product does offer a structure that helps us to gradually accumulate value which may be used to help us fund for the future when charges are generally higher,” she adds.

“However, as this is still an insurance product, the main focus should still be about protection, not growing your wealth.”

What Insurance Should You Get In Your 40s?

Individuals in this age group should be firmly at their peak in life. Many will have assumed positions of seniority at their jobs or built a family. With all these added dependents, not having insurance by this time can often be concerning, with premiums usually higher due to the advanced age of potential buyers. So, have you missed the boat by the time you hit your 40s?

Nicholas Wong, a certified financial planner with IPP Financial Planning Group, believes that it is “never too late to get insurance”, but concedes that it is advisable to start getting insurance at an early age.

“It is always recommended to get coverage as soon as possible if one can afford it as one can only obtain insurance when healthy,” he shares.

The higher risk of developing illnesses or other serious health conditions means that for individuals in their 40s, it is now or never when it comes to buying insurance, especially if they are still healthy. Those with pre-existing conditions may find it harder to purchase insurance coverage says Wong.

“Your plan might come with exclusions or premium loading, which is paying more due to illnesses such as hypertension, for example. If one has diabetes, one generally can no longer purchase medical or critical illness coverage.”

“Thus, it is better to get a plan when you are younger as the premiums are lower and there is less risk of having exclusions or insurance coverage being denied,” he concludes.

For middle-aged people looking to get insurance for the first time, there is still time as alluded to earlier.

“For insurances, we always look at the needs of the individual and have to select the appropriate type of coverage,” says Wong.

“For example, if they have dependents such as young children or old parents, life insurance would be a need unless they have surplus liquid cash around.”

Wong, who formerly worked in insurance, recommends critical illness and disability insurance as a safety net against a loss of income arising from unfortunate events. This is because those in their 40s are likely to be at the peak of their career in terms of earnings and income replacement coverage will help to mitigate against unfortunate life-changing events.

“For critical illness cover, the recommendation is three to five times of the annual income or annual expenses,” he says.

“This means that while one is recovering from a critical illness, they would be able to take three to five years off work and not worry about expenses or dipping into their savings.”

Wong also recommends a 20-year term plan for those in their 40s as it is both affordable and provides large amounts of cover.

“A 20-year term plan with RM500,000 for life and total and permanent disability cover with RM100,000 critical illness cover can start from approximately RM200 a month,” he continues, noting that premiums may differ depending on plan benefits and type.

Wong suggests that one should usually budget 5-10% of total income for insurance payments, with this amount set aside to “protect or guarantee the remaining 90-95%” in the event of death, disability, critical illness or hospitalisation.

“Medical insurance which gives access to private healthcare is also something one can consider as it gives you more options when it comes to medical treatments as not everything is covered by our government hospitals,” he adds.

Insurance As Wealth Management

While many may look at insurance purely from a protection standpoint, it may also help to picture it as a mechanism to manage or preserve your wealth. Here are four ways which Angie Ng suggests insurance can be used for this purpose:

1. Wealth creation
“Part of the premium paid each month can go into cash value and there are also some products available that will help people who prefer very conservative savings instruments to build their wealth slowly and steadily.”

2. Debt cancellation
“There are insurance policies from which the proceeds can settle outstanding loans on assets like houses, cars, businesses and others in the event that they are unable to repay the balance.”

3. Wealth protection
“When risk is incurred, medical treatment, critical illnesses or total permanent disability occurs, insurance can protect their wealth as the treatment and insurance proceed can ease their financial burdens without
touching their hard-earned money.”

4. Wealth distribution
“In the event of an untimely death, life insurance policies can help to settle a person’s outstanding taxes, estate administration fees, and most importantly, leaving a legacy behind for their loved ones.”

In addition, insurance can also be used to mitigate the risk of natural disasters, no matter how rare or unexpected they may be. According to the Department of Statistics, the 2021 floods caused total losses of RM6.1 billion, with RM1.6 billion of damage to residential properties, RM1 billion to vehicles, RM900 million to the manufacturing sector, RM500 million to business premises, RM90.6 million to agriculture, and RM2 billion to public assets and infrastructure.

“If you are exposed to risk, for example, flooding in low lying areas or landslides in high hill areas, it is wise to include additional peril in your insurance policy to cover for natural disasters or other events,” says Ng.

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.

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