A Personal Finance Blog for Malaysian: Rich Wants Life Insurance; Not-so-rich Needs Life Insurance; Poor Can't Afford Life Insurance?

Friday, October 1, 2010

Rich Wants Life Insurance; Not-so-rich Needs Life Insurance; Poor Can't Afford Life Insurance?

If we simply group people into ABC.

A - Rich
B - Not-so-rich (a.k.a. Middle Income)
C - Poor

What is the purpose of Life Insurance for each group? It should be different right?

Rich wants life insurance for their wealth allocation;
Not-so-rich needs life insurance for money management (saving and protection)
Poor can't afford life insurance, while they are the one NEEDED IT MOST.

  • According to Annual Insurance Statistic from BNM, more than 60% of Malaysian were uninsured. 
  • As at the end of year 2009, there are only 11.85 million policies in force. Just imagine, I have 5 policies while some people easily have 2~3 policies. Looking at Malaysian population of > 27 million, isn't it more than 60% of Malaysian were uninsured?
The problem with the poor is not only they think they can't afford it, I believe most life insurance agent also reluctant to sell to them for two reasons:
1) Low premium case - a waste of time and petrol;
2) Lapse case affects their performance bonus.

A term life of RM100,000 for a 30 years old male for a tenure of 20 years merely cost RM301 per year or RM25.09 per month. I hope those who think they can't afford will reconsider.

Click here for quotation.