It’s very simple

At its core, life insurance is simple. In most cases, it’s not for the person who dies, it’s for the ones they leave behind. If you die while you have life insurance in place, the people you’ve chosen (your beneficiaries) will receive a sum of money, often called the death benefit, from your life insurance policy. The amount of money they receive depends on how much your policy is for.

The math is pretty straightforward. If you buy a RM250,000 policy, then the people you choose will receive RM250,000 after you die. You can have just one beneficiary or as many as you want. You can even choose how much of the money each one receives.

What do they do with all of that money?

If you have life insurance, then your loved ones will receive one lump sum of cash when you die. Certainly the money doesn’t replace you, but it does replace your lost income.

People typically use the money for needs, such as:

Funeral expenses
Mortgage payments or rent
Child care

Once your family has regained their footing, they can then start to consider goals such as:

A child’s college education or wedding
Retirement planning
Adult care
An emergency fund

Basically, they can use this money for anything without restriction. Now think about if you were to die without having life insurance. How would they pay for these needs? Life insurance can help make a difficult time just a bit easier.