GROUP 4 PFM

PERSONAL FINANCIAL

MATTER

DPA10203

Introduction..........................................................................................................................
Definition of Insurance.........................................................................................................
Types of Insurance................................................................................................................
Importance Of Insurance......................................................................................................
Financial Responsibilities of Getting Married......................................................................
Conclusion............................................................................................................................
Reference.............................................................................................................................

INTRODUCTION

Have you heard about financial problems in marriage? Or have you been in
the situation where you and your partner having a financial problems? You don’t have
to worry much because this book is made for those who are facing insurance or
financial problems in their marriage. This book will lead you on what is insurance and
what is the importance of insurance in our life especially for those who are married.
Furthermore, this book is published to help you identify what are the roles or financial
responsibilities of getting married. Do read more to figure out the strategy on
managing insurance for married couples.

Insurance is a legal agreement between two parties i.e., the insurance company
(insurer) and the individual (insured). In this, the insurance company promises to make
good the losses of the insured on happening of the insured contingency. The
contingency is the event which causes a loss. It can be the death of the policyholder or
damage/destruction of the property. It’s called a contingency because there’s an
uncertainty regarding happening of the event. The insured pays a premium in return for
the promise made by the insurer.

TYPES OF INSURANCE

Life Insurance

Life insurance is a policy or cover whereby the policyholder can ensure
financial freedom for his or her family members after death. Other than
that, life insurance insures you and your life against risk such as illness,
disability, and hospitalization. It is important to have insurance if there
are people depending on you. Suppose you are the sole earning member in
your family, supporting your spouse and children. In such event, your
death would financially devastate the whole family. Life insurance policy
ensure that such thing does not happen by providing financial assistance
to your family in the event of your passing.

TYPES OF INSURANCE

There are few products of life insurance: 2) Term Life

1) Whole Life Insurance This provides protection that only
available for a specified period.
As the name given, whole life insurance The money will be paid only upon
offer lifelong protection but you must death, total and permanent
pay premiums throughout your life. The disability or critical illness during
claim amount, including bonuses, will be the term of policy. This is also
paid upon death, total and permanent according to the amount agreed
disability or critical illness. Thus, the upon when buying the policy.
premium is higher than for term
insurance besides it provides cash value
during the term of policy.

TYPES OF INSURANCE

3) Endowment Plan 4) Investment-Linked

Endowment plan merges protection Similar to endowment, this combines
and savings. A portion of your investment and protection. Part of
insurance premiums go toward the your insurance premiums go towards
death benefit, while the remaining is mutual fund investments, while the
invested by the insurance provider. rest of it go towards the death
Maturity benefits, death benefit and benefit. You will get to choose the
periodic bonuses are some types of type of investment fund you wish to
assistance from these policies. invest and the amount of life
insurance coverage you want to have.
The amount of premium is flexible.

TYPES OF INSURANCE

5) Medical and Health 6) Mortgage Reducing Term

This helps to cover This is usually a single premium policy
the cost of medical with the coverage amount matching
treatment particularly the scheduled outstanding balance of
in regard to the loan. In case you default on the
hospitalization and payments due to illness or disability
surgery. or upon death, the policy will settle
the loan and the bank will release the
ownership of the house either to you
or your beneficiaries.

TYPES OF INSURANCE

7) Child’s Plan 8) Retirement Plan

This investment cum Also known as pension plans,
insurance policy, which these policies are a fusion of
provides financial aid investment and insurance. A
for your children portion of the premiums
throughout their lives. goes toward creating a
The death benefit is retirement corpus for the
available as a lump-sum policyholder. This is
payment after the available as a lump-sum or
death of parents. monthly payment after the
policyholder retires.

IMPORTANCE OF INSURANCE

Protection for you and your family

Your family depend on your
financial support to enjoy a decent
standard of living. Therefore,
insurance is important especially
once you start a family. This means,
the people who matter the most in
your life can be protected from
financial hardship if an unexpected
happens.

IMPORTANCE OF INSURANCE

Reduce stress during difficult times

No one knows what lies around the corner.
Unpredicted tragedies such as illness, injury,
or permanent disability, even death can leave
you and your family facing tremendous
emotional stress. With insurance, you or your
family’s financial stress will be reduced.
Meanwhile, you can focus on recovery and
rebuilding your lives.

IMPORTANCE OF INSURANCE

Provide safety and security

It doesn’t matter what your financial position is today, the
unexpected event can see it all unravel very quickly. There is
always a fear of sudden loss. Insurance provides a payout so that
if there is an unforeseen event you and your family can hopefully
continue to move forward. For example, in case of life insurance
financial assistance is provided to the family of the insured on his
death. In case of other insurance security is provided against the
loss due to emergency case, such as fire, accidents etc.

IMPORTANCE OF INSURANCE

Peace of mind

This is usually a single premium policy with the
coverage amount matching the scheduled
outstanding balance of the loan. In case you default
on the payments due to illness or disability or upon
death, the policy will settle the loan and the bank
will release the ownership of the house either to you
or your beneficiaries.

IMPORTANCE OF INSURANCE

Medical support

A medical insurance considered essential in
managing risk in health. Anyone can be a victim of
critical illness in any unexpected moments.
Moreover, rising medical expense is a great
concern nowadays. Therefore, medical insurance is
one of the insurance policies that cater for
different type of health risks. The insured gets a
medical support in case of medical insurance
policy.

IMPORTANCE OF INSURANCE

Promotes economic growth

Insurance provides significant impact on the
economy by mobilizing domestic savings.
Insurance turns accumulated capital into
productive investments. Insurance enables to
mitigate loss, financial stability and promotes
trade and commerce activities those results
into economic growth and development. Hence,
insurance plays a crucial role in sustainable
growth of an economy.

Financial Responsibilities getting married

getting married is a big decision, and it isn’t just about making a lifelong commitment to your
partner: Marriage is a legal contract. When you get married, you not only accept rights and
benefits, but you also take on legal and financial obligations.

in household, where one spouse shoulders all the financial responsibilities, that spouse is
typically the husband. It is a common for wives to handle to handle bills paying and shopping
while husband manage the big picture planning, such ad retirement accounts, insurance and
tax planning. Before getting married, this is how you manage/prepare your finances for
wedding:

Financial Responsibilities getting married

- if you and your spouse earn roughly the same salary, you may split your expenses down the
middle or you may contribute a proportional amount of money to the household based on your incomes.

- what is separate accounts:
separate accounts allow each spouse to maintain their financial independence and manage their own
income. This may be a viable solution if your partner isn’t great with money, or you both wish to keep a
level of financial autonomy.

Financial Responsibilities getting married

determine how to pay for your wedding

- you should budget for a wedding and honeymoon that leaves you debt free (or at least with a
plan to quickly pay it off). Whether that involves saving and careful budgeting, asking help from family
members or just doing the deed at the courthouse depends on you and your partner’s plain and desires.

- for examples, you can keep the guest list small, look for affordable food caterers or borrow a
friend’s backyard for the reception. In the long run, memories of celebrating with friends and family will
probably outshine expensive venues, lavish flowers, and luxury decorations.

decide how to split financial responsibilities

- every couples should decide how to split obligations like bills, savings, and everyday
purchases. For example, if one spouse is the sole breadwinner, they will likely be responsible for
expenses.

CONCLUSION

As a conclusion. There are lot types of insurance we can
claim in order to keep us safe for our financial problems in the
future. Besides, every types of insurance has its own benefits
for us. Therefore, everyone of us must claim our insurance as a
safety tool for our future. Other than that, there are many
financial responsibilities of getting married. Those
responsibilities includes determine how to pay for your
wedding, decide on how to split financial responsibilities among
spouse and more. Therefore, every married couples must
collaborate in order to manage their financial responsibilities.

REFERENCE

i) Internet:

✓ https://www.policygenius.com/personal-finance/news/how-to-prepare-your-
finances-for-marriage/

✓ https://www.bt.com.au/personal/insurace/learn/understanding-insurance/why-
insurance-is-important.html

✓ https://www.forbes.com/advisor/life-insurance/getting-married-insurance-plan/
✓ Types of Insurance: Different Types of Insurance Policies in India (godigit.com)
✓ General insurance - Wikipedia
✓ personal belongings insurance - Search (bing.com)

i) Books:

• Money $ense. (2008). Kuala Lumpur: AKPK

THANK YOU