Reasons To Invest In A Life Insurance Plan

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Life insurance is an essential part of life and a crucial element of sound financial planning. However, according to the Life Insurance Association of Malaysia (LIAM), over half of the country's population are still without life insurance coverage. 

Many see life insurance as an extra financial burden, even though affordable policy options are available. And for younger people, they typically don’t think life insurance is a necessity until they are older, which is a big myth.   

While some people may think life insurance is inconvenient, the truth is, there are compelling reasons to invest in a life insurance plan, especially if you have debts, and already have or are planning to start a family:

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1. Protect those you love

No one knows what the future holds. So, securing your family’s financial future with a life insurance policy is the least you can do to ensure your loved ones can move forward with their lives, in case something happens to you. This is even more important if you are your family’s sole breadwinner.  You don’t want to leave your spouse, children or parents with any extra financial burden in addition to the emotional burden they will face.

Your policy will serve as a financial cushion by providing your family with income to continue paying daily household expenses, maintain their standard of living, and clear off any outstanding debts such as your funeral costs, credit cards, car loan and mortgage.      

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2. Retirement planning

The main purpose of life insurance is to protect your loved ones from financial risks in case of your passing or disability. However, a life insurance plan can also come in handy for your retirement planning.  

During your golden years, your savings becomes your primary source of income, so you will want to ensure that you have enough to last for the rest of your life. 

An endowment plan - a type of life insurance policy that functions as a savings and protection plan - can serve as your additional source of retirement income by helping you save regularly over a specific period of time, so that you get a lump sum plus any additional bonuses upon the policy’s maturity. An example of this type of policy is Gibraltar BSN’s Go LiveWell.

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3. Tax benefits

Here is another good reason to invest in a life insurance plan - you get to claim tax relief on your premiums, making this another way for you to maximise your income tax refund!

As of 2019, the claim limit for life insurance is RM3,000. Pensionable public servants enjoy a higher claim limit for their premiums (up to RM7,000). 

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4. You may not qualify for a plan later on

For the young ones out there, consider this - when it comes to life insurance premiums, young and healthy = cheaper. When you are young and healthy, you qualify for lower premiums because it is less likely that an insurance company will have to pay you a claim. 

With each passing year though, premiums become more expensive, as your chances of developing health problems increases as you get older. In fact, if you wait till your later years to start looking for coverage, you may not even qualify for a plan. So don’t delay.  

Also, this may not be on your mind now,. But somewhere down the line, you will probably want to settle down and start a family of your own. Once again, with your age and health as your advantage, getting your life insurance in place now is the best thing you can do for your future spouse and children.   

We hope we have convinced you on why it’s worth investing in a life insurance plan. As mentioned at the beginning of this article, life insurance isn’t always expensive. There are various options available to cater to different needs and budgets. You will be surprised at how cheap and affordable the premiums can be! 

Protect yourself and your loved ones by securing your finances now. Check out Gibraltar BSN’s range of life insurance plans here.