For_Proposal_health_insurance_v1

SPECIALFOCUS

UNDERSTANDING

DLIIFREECITNTSEURMRANCE

With Direct Term Life insurance,
Malaysians can buy directly from
insurers without paying
any commission

In my previous article, I covered ‘Buy by offering commission-free coverage. What choices do I have?
Term and Invest the Difference’ As a result, these protection plans
and why direct term insurance were introduced to the market: Most of the insurance companies
is beneficial for Do-it-Yourself (DIY) • Direct Term Life Insurance/Takaful; have made their Direct Term Life
investors. Therefore, in this issue, I • Direct Critical Illness Insurance/ plans available online. You can easily
would like to go deeper and cover get an instant quotation from their
what are the options available for you. Takaful; and official website. All you need to do is
• Direct Medical & Health Insurance/ to search for the following plans via
As mentioned previously, term- Google.
life insurance is a type of insurance Takaful
that provides protection for a pre-
By Marshall Wong determined period. The shorter the Company Product Name
pre-determined period, the cheaper
the premium will be. AIA AIA Starter Plan
AIA AIA One Plan
Life Insurance and Family Allianz i-EssentialCover
Takaful Framework AXA eLife Protector+
(LIFE Framework) Etiqa Ezy-Secure, and Ezy-Life Secure
Gibraltar i-Care
It all started in November 2015. Great Eastern Great Term Direct
Bank Negara Malaysia (BNM) wants Hong Leong Assurance Term Cover 10
insurance and takaful products to be Manulife ManuProtect
accessible to the consumers through a MCIS MyLife Protect
wider range of delivery channels, and Prudential PRUdirect protect
at the same time lowering the cost of SunLife Sun eSsential Life
distribution. Tokio Marine TM TermDefender

The central bank made it
compulsory for all insurance
companies and takaful operators to
build the presence of direct channels

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The basics of of the term. If you’re not
Term Life Insurance Here are some tips on how to comfortable with the
increase of premium
Even though Direct Term Life is choose the right Term Life Insurance: every year, you may
a simple product compared to
an investment-linked policy, each #1Determine your want to look at the
product is different. It is important objective few companies that
to go through the details thoroughly offer a term longer
before committing to any one of A term plan is flexible than one year. Note
these plans. as you do not need to commit for
a long period. Thus, it is perfect to that the longer
Here are some important basics of cover many circumstances such as: the term, the more
a term life insurance: • Income protection; expensive it gets.
• Living expenses protection;
Term • Children education protection; year. To enjoy this convenience, look
The length of the insurance coverage. for a direct term that guarantees the
If the term is 10 years, it means the and renewability of the policy.
policy/contract will last for 10 years. • Mortgage Reducing Term
However, the premium of these
Maximum coverage age Assurance (MRTA) / Mortgage policies is not guaranteed. Every
The maximum age that the insurer Level Term Assurance (MLTA). insurer has its indicative premium
will cover. Regardless of the term, the tables for different age groups, you
insurance will mature at the maximum #2Determine the may want to have a look at that.
coverage age. correct coverage
If you’re not comfortable with
Renewability From the objective that the increase of premium every year,
The capability of the policy being you have chosen above, calculate you may want to look at the few
renewed. If the renewability is how much money is needed if you companies that offer a term longer
guaranteed, one can purchase a are no longer in the picture. How than one year. Note that the longer
new term without going through much does your spouse, children, the term, the more expensive it gets.
additional underwriting. This is parents or other dependents need
important as one may not be able to to sustain their living expenses? If Final thoughts
purchase a new term due to health the amount is more than RM500,000,
issues. you may need multiple plans as With the introduction of Direct Term
most companies only cover up to Insurance, DIY investors can now save
Is the premium guaranteed? RM500,000. money on insurance premiums while
Most direct term insurance have a maintaining the same coverage.
one-year term (yearly renewable), You should also pay extra caution
therefore the premium is not to exclusion clauses for direct term However, if you are not confident
guaranteed and may be subject to life policies. I encourage that you in choosing your own insurance,
increase after the one-year period. read your policy once you received it it is highly encouraged to look for
from the insurance company. If you a financial planner to assist you.
Beneficiary do not like what you are reading, Should you have any questions,
A beneficiary is a person who will you may utilise the free 15-day free feel free to email me at Marshall@
receive the insurance benefits upon look period to return your policy for plannerd.io.
the death of the life assured. a refund.
Marshall Wong is a fee-based
Do I get anything back #3Choose the financial planner holding licenses
at end of the term? correct term from the Securities Commission
No, most direct term life insurance is Malaysia and Bank Negara
pure protection insurance. There will Most of these direct Malaysia.
be no cash/savings value at the end term insurance policies have a
term of one year, and this means
you will need to renew your policy
every year. Most of the time, this
process is automatic, and you are
not required to fill up a form every

SmartInvestor |05/06 . 2020 | 37

SPECIALFOCUS

PROTECTING economical and effective way of dealing
with these risks at every stage of life.
AYCOXRUEARAWWTOEEAARLTLHTHWITH
You need to protect the most
AXA AFFIN Life Insurance’s new legacy plan important asset that creates wealth.
helps you create and protect your wealth For example, when you start to earn
an income, you need to protect
Creating wealth is paramount people losing their jobs. your ability to earn that income. As
in your journey towards Whatever the circumstances, you move through life and perhaps
achieving financial freedom. get married or have children, there
However, in this journey of wealth we need to focus on growing our are new responsibilities that need
creation and accumulation, many wealth and keep a lookout for new a secure protection strategy. There
people often overlook the need for opportunities which will help us achieve are also specific financial risks that
wealth protection. This is extremely our financial goals. While there are many need attention when you take on
risky. Any unforeseen event can investment vehicles in the market, there new financial responsibilities, such as
destroy your wealth overnight and are very few which offer overall wealth starting a business or taking a loan.
leave you and your loved ones to creation, accumulation, distribution and
suffer great loss, derailing all your most importantly protection of wealth in In later stages of life, you may
well-laid plans in the process. a single product. want to adjust your insurance plan to
take into account your grandchildren
The COVID-19 pandemic is What is Wealth Protection? or extended family, so that you can
a pertinent example of how an A great financial plan takes into account allocate funds and distribute benefits
unexpected global health crisis has possible threats and risks that you might across generations.
resulted in many losing not only part face and uses tools and strategies to
of their wealth but also their lives. mitigate and manage those risks. For LIFE INSURANCE
The pandemic has stalled businesses most of us, there is no greater risk than How much are you worth to your
across all sectors, and is expected the collapse of a financial source due family? Of course it is impossible to
to lead a contraction in the global to premature death, illness or injury. quantify in emotional and relationship
and Malaysian economies, with many Efficient insurance planning is the most terms, but it is measurable in financial
terms. Think of how much you earn and
how many years you will be earning
it – and then think of what your family
would do without that income.

TOTAL AND PERMANENT
DISABILITY (TPD) INSURANCE
Have you considered how you would
manage without an income? If you
become permanently disabled you
could suffer devastating financial
impacts, when your focus should be
on your rehabilitation.

TERMINAL ILLNESS
Are you in a high-risk category for
suffering a heart attack? Not all
serious medical conditions result in
permanent disability, but they can
still result in serious financial impacts.
Imagine suffering a stroke or learning
you have cancer.

What would you want to do to

38 | SmartInvestor | 05/06 . 2020

SPECIALFOCUS

ensure a strong recovery and to de-
stress your life?
• Fund the best possible medical

treatment?
• Pay off your existing loan

obligations?
• Take an extended holiday?
• Leave your job or scale down

hours?

INCOME PROTECTION
Could you manage financially if you
no longer earned an income? Some
injuries or illnesses may result in
temporary loss of income that cannot
be covered by savings and will outlast
any sick leave you may have.

BUSINESS PROTECTION Upon maturity of the policy, you Family who wants to secure financial
Are you self-employed? Having a will receive your maturity benefit of a stability for their loved ones
business protection plan is particularly lump sum payment that is equivalent • Instant cash flow for your family in
useful for you to cover fixed business to your account value. The plan is
expenses should you be unable to guaranteed renewable up to the age any unexpected events
work due to illness or injury. This can of 100 at your option.
keep your business active while you Looking for Loan Protection
recover and can be used to reimburse It also comes with additional • Protect your assets from your
costs such as rent, salaries, loan features which are new in the market
repayments and utility expenses. to increase wealth accumulation such creditors
as Loyalty Bonus and Loyalty Booster, • Effective wealth management
AXA AFFIN Life Insurance’s new which will be credited into your
legacy plan helps you create and account value the moment you reach and separation from business and
protect your wealth certain policy milestones. personal needs.
• Providing security to your loved ones
With these needs in mind, AXA On the protection side, AXA from being burdened by any loan
AFFIN Life Insurance has launched Wealth Creator covers accidental repayments especially housing loan.
the AXA Wealth Creator, a regular death, death, total & permanent
premium investment-linked insurance disability (TPD) and terminal illness. Creating Wealth & Legacy for Your
plan that gives you peace of mind Family
throughout your wealth management This plan is suitable if you are: • Leave a lasting gift of a meaningful
journey. This plan essentially offers
you an optimum combination of An entrepreneur looking for financial legacy to your family
insurance protection and investment. multipurpose protection across generations
• Protection on financial loan
AXA Wealth Creator features • Coverage on business creditor risk For more information, visit www.
flexible options such as short premium • Emergency cash axa.com.my, contact 1 300 88 1616
payment terms and coverage terms or get in touch with your nearest AXA
to cater for different needs. There are AFFIN Life Insurance Agent.
four premium term options to choose
from (5, 10, 15 or 20 years) to suit your
financial planning needs at different
stage of life.

SmartInvestor |05/06 . 2020 | 39



















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