Life Insurance Update - Malaysia

Malaysia’s life insurance industry recorded a 6.9% growth in insurance protection to RM1.17 trillion for all policies combined in 2014 (RM1.09 trillion in 2013). The sum assured per capita in 2014 has also recorded an increase to RM38,449 (from RM36,387 in 2013).

 

Malaysia’s life insurance industry provided insurance protection to 12.4 million lives (counting lives with multiple policies as separate lives) in 2014 (an increase of 148,574 from 2013). On average, the gap ranges from RM100,000 to RM150,000. This means that the average sum assured of RM38,449 is still way below the amount needed to support one family member in the event of the death or disability of the breadwinner. 

 

The current penetration rate, as at 54%, was considered low as the government’s plan was that 75% of Malaysians be insured by 2020. There is a need to develop suitable insurance products to meet the different life stage needs of customers and introduce new delivery channels to reach out to the remainder 50%, of which a high percentage of the population could be concentrated in the rural areas. 

The life insurance industry in Malaysia grew by 5.5% in 2014, as measured by new business annual premium equivalent (APE).  APE comprises of the 10% single premium and 100% annualised premium. New business total APE in 2014 was RM4.71bil (as compared with RM4.47bil in 2013). 

In terms of individual business, investment-linked policies continued to outpace traditional policies with the former growing at 11.1% compared with the latter which shrunk by 1.6%. On total new premium basis, the industry grew 9.3% in 2014, with total premium volume recording RM8.95bil.

 

The total premium for in-force policies grew moderately at 5.8% in 2014 for individual and group policies combined. The life insurance industry also registered an increase of 21.3% in claims payouts amounting to over RM8.4 billion as compared with RM6.9 billion in 2013.

The high growth in claims payouts was contributed mainly by higher medical claims and bonus payments to policyholders. Medical claims increase was contributed mainly by strong growth in medical insurance business in recent years and partly by medical inflation. 

 

Increase in bonus payments was mainly due to the increased popularity of the cash bonus type of policies in recent years. The increase in death claims meanwhile was moderate at 7.6% in line with the increase in in-force sum assured 

Commenting on the outlook for 2015, Kwo said the economy’s strong fundamentals would continue to underpin the life insurance industry with expectations of a robust strong single digit growth.

Tips For Job Interview

If you’re meeting a recruiter about a banking job in Singapore or Hong Kong over the next few weeks, beware. Recruiters are not just the first line of defence, in a less buoyant job market they’re filtering out candidates within minutes if they make the following mistakes or mishaps. Avoid them.

Arrogance
“The biggest mistake I’ve noticed is when a candidate assumes the interview with a recruiter is a formality before the one with the employer and doesn’t take the process seriously,” says James Carss, Hong Kong director of recruiters HFG. “This has led me to see lateness without an apology or forewarning, not switching off mobile phones, taking calls during the meeting without explanation, making inappropriate comments that are irrelevant to the interview, and just generally adopting an unprofessional tone.”

Vagueness
Recruiters don’t like answers that begin with the words “around” or “about” – vagueness suggests you’re holding something back that could jeopardise the hiring process further down the track, says Carss. “For example, I need to know if you’re currently interviewing for other roles. If you’re vague about this then it’s very hard for me to work with you.”

Punking it
“I interviewed a candidate for a fintech job who turned up in casual clothes and had a punk-like hairstyle with multiple piercings in his eyebrows, nose and lips,” says Vince Natteri, director of recruitment at search firm Pinpoint Asia in Hong Kong. “His skills were suitable for a top-tier investment bank, but when I asked him whether he’d remove his piercings and dress more formally for the job interview he said ‘absolutely not!’ I then explained the bank’s culture and why he’d miss out on an interview if he didn’t change. But in the end I couldn’t submit his application.

Stubbornness about salary expectations
“When someone has a pre-conceived idea of how much they’re worth and refuses to listen when I offer advice around a more realistic salary increase, I usually rule them out pretty quickly,” says Samantha Ding, a manager at recruitment firm Greythorn Banking in Singapore. “In this job market, there’s simply no point in representing this person if I know that my client can’t afford them.”

Playing hard to get
Feigning aloofness about a role to make a recruiter want you more won’t work. “If you’re non-committal or play it too cool – saying things like ‘I might be interested, put me forward and we’ll see’ – then unfortunately, it’s a no from me,” says Ding. “If you’re interested in the role, say so upfront – it’s not going to damage your negotiating position. Banks want people with a genuine level of enthusiasm for the job.”

Smoking
Richard Aldridge, a director at recruiters Black Swan Group in Singapore, has met candidates who (literally) stink. “If you’re a smoker, fine – but it’s best not to have a cigarette or two just before heading into a confined interview room with another person – this will definitely put a recruiter off representing you to banks.”

Courting controversy
Keep any small talk small when you meet a recruiter. “I strongly suggest that any controversial topics or hobby should be left off your CV and not mentioned in meetings,” says Aldridge. “Putting ‘hunting’ on your CV when the interviewer or recruiter is a passionate animal lover may not be the best conversation starter.

Using casual language
Don’t break into Singlish or similar slang just because you’re meeting a local recruiter – this is not a casual chat. “Bad English is a major turnoff for multi-national clients,” says Adrian Choo, a principal at search firm CTPartners in Singapore.

Cussing your current bank
However tempting, it’s vital that you don’t launch into a tirade against your existing employer, says Choo. Remember that recruiters primarily have their clients’ interests at heart and aren’t a neutral sounding board for your grievances. These clients don’t like hiring people who have too many push factors for moving jobs.

Holding back the facts
Make sure you always answer questions about the basics of your current job: salary, bonus and notice period. “I had a meeting where someone refused to disclose their salary and unfortunately that meant I couldn’t represent them,” says Ding from Greythorn. “I had to end our meeting as they refused to accept that the request came directly from my client, not myself. This information is a pre-requisite for most banks.”

Positive Leadership

In business today, change can be rapid and unexpected. A great company one day can be not-so-great the next. Your best people may come and go, and your business strategy may need to change radically overnight to keep pace with ever-shifting markets.

Challenges like these can make leading a successful business difficult, but the most successful leaders have figured out how to build companies that can thrive in even the most difficult circumstances.

Extraordinarily successful leaders get the most out of their people by helping them become highly motivated, engaged in their jobs, and happy. Adopt these five habits of extraordinarily successful leaders and watch your company's performance quickly surge.

Set The Bar High
The best way to encourage your people to consistently give their very best on the job is to set the bar high and then challenge them to meet or exceed your expectations. Delegate some of your most vexing problems to your employees. Set realistic goals for them, treat each employee as a valuable member of your team, and give them the autonomy to make decisions and do their work as they see fit, so long as they meet their performance standards and your expectations.

Build A Productive Work Culture
A workplace that is industrious, trusting, open, and fun will be the most productive and successful, even during turbulent times. Be open to new ideas and suggestions that come from your employees, and show them that their voices are being heard and their efforts appreciated. Be Visible &

Honest And Keep Promises
Make the time to manage by walking around. Be visible to your employees. Find the pulse of your organization by observing your employees at work and asking them for their views on how they think things are going--at their level, management's level, and throughout the organization. Be frank and honest with them, and never make a promise you can't keep. Listen to their concerns and regularly schedule meetings to strategize and problem-solve with your employees.

Make Your Team A Part Of The Plan
While it's the job of a leader to set the course for the organization, your employees' knowledge and skill are critical for your success. Direct your employees toward your goals, but be as transparent with your people as you can be. Involve them in developing company plans and goals, and then show them what their role is in achieving them. When your employees understand the overall plan, they will view themselves as an important piece of the puzzle and may better understand your plans for the organization.

Celebrate Your Team's Successes
Take some time each week to celebrate your team's successes and to thank your people for their continued efforts. A sincere thank you for a job well done can be a powerful motivator. Thank your employees personally and promptly when you find them doing something right by writing a quick email or text message, or by dropping by their office to tell them in person.

Recruiting New Agent

Recruitment
The key tasks of a Leader of a life insurance Agency are Recruitment, Training, Motivation & Supervision (RTMS). Recruitment represents the most critical. Without recruitment – the Leader will have no agent to train, motivate & supervise.

It is often mentioned in the life insurance industry amongst agency leader – “Recruit or Die”. The key is to “Attract” not to “Recruit” new people into your business. Recruiting is the process where you convince people to join your organization. Attract is the process where people convince you to accept them into your organization. It is likely the same will attract each other. A MDRT Qualifier will certainly attract a potential MDRT Qualifier too. An established organization attracts the best talent. A mediocre organization recruits mediocre candidate.

Personal Production
Agency Leader must have a credible personal producer track record as a pre-requisite to be able to recruit effectively. An Agency Leader can then uses his credible sales track record as a show case to attract prospective candidate to join this business. Result speaks louder than talk. Prospective candidate is most likely to believe in concrete result more than mere talk.

Personal Income
Agency leader earns the maximum commission & overrides for personal production. Unlike an agent that earns commission only. Productivity combined with profitability offers highly stable and lucrative income for an agency leader. High & stable income is another show case that attracts talented entrepreneur into our business.

Developing 3Ps Agency
 “Walk Your Talk” by ensuring excellent personal production & personal income. Next – you “Talk Your Walk” – by showing your excellent track records to compete & attract the best talent from the market into your business organization. Talented entrepreneur represents a potential valuable asset that an agency leader can develop into a highly productive, profitable and professional agency.

Think, Do & Be Positive

Do you wonder how to be positive in your thoughts and actions especially when you are unhappy and unsatisfied, or when life is difficult and tough? For many, it is difficult to be positive, even when things go well.

Though it's so simple, most people don't know how to be positive. Sometimes, they prefer to stay negative, because it is a more familiar state of mind. Like every other subject, the know-how of how to be positive can be learned and the skill developed. It has much to do with changing your attitude and your mind-set.

If you keep thinking the same thoughts, day and night, they might, sooner or later, manifest in your world, becoming your reality. This means that if you want your life to be as you want it to be, you have to be careful of what you think. You need to start thinking more positively.

Your Mind Creates Your Reality
As you think, so your life becomes. Changing your attitude and expectations, will sooner or later, change your life accordingly. It is your mind that creates the kind of life you live. If you think positively, you will transform your life accordingly. Everything starts from within, from the most simple action, to the greatest achievement.

We cannot always control our external circumstances, but we can control our inner world of thoughts, where everything begins. We cannot always control our outer universe, but we can, with some effort, control our inner universe.

If you are unhappy and negative, you can change the way you feel and think.

With a little work and effort, you can change your attitude, expectations, actions and reactions, and this will lead to more motivation, happiness, and improved life conditions.

How to Be Positive

1. Substitute your negative thoughts with positive ones.
2. Focus on what you want, not on what you don't want.
3. Focus your mind on the good things you already have in your life.
4. Think and believe that you already have abundance, success, love and happiness.
5. Learn to feel, think and even act, as if you are already living the life you want. If you can feel, think and act consistently in this way, you will become happier, and will attract new opportunities into your life.

We get what we expect to get. Therefore, begin right now to expect the very best of everything that this world has to offer, and wish the same for everyone else. There is plenty of everyth in the Universe for everyone, and the Universe can create more of the good things for everyone.
Don't think lack, think abundance, for you and for everyone else.

Shit Stirrer

The workplace can be a cut-throat environment, with everyone trying to get ahead in some way, shape, or form. It’s no surprise that there are those downright malicious people who will do anything and everything to get a leg up on the competition and win.

Identify The Shit Stirrer
The first step is to know how to identify who the connivers are amongst your co-workers, which can be a tricky task. First, take a step back and evaluate the situation for what it is. Manipulative people are usually very good at disguising themselves as your friend when they need something, but could care less about you otherwise. Pay attention to how consistently you are being asked for help by this person, as well as how apt they are to acknowledge you or your contributions in a group setting.

Another indicator of a schemer is whether they are prone to bad-mouthing or gossiping about others in the office, including the boss. In general, anyone who always has something negative to say about other co-workers is probably not the person you want to surround yourself with, nor lend your assistance to.

Just Say No
After you’re able to identify the shit stirrer - don’t be afraid to say “no” to these cancers of the office, because they’re only out to advance their own careers, and definitely not anyone else’s. If you are asked for help by a manipulative co-worker, the best thing to do is explain that you’re busy trying to meet such-and-such deadline, and then maybe lend some advice to help that person complete the task. This way, you aren’t being rude or abrasive when declining to help, and are still offering free advice in the end.

It's Them, Not You.
These “wolves in sheep’s clothing” are taking out some personal issue or insecurity on you and it’s usually unwarranted. It’s crucial to maintain professionalism when dealing with such characters in the workplace, which oftentimes means biting your tongue when you want to lash out. The best way to deal with a manipulator’s continuous wickedness is to address the issue, professionally, with the person privately.

The absolute worst thing you can do when you’re being manipulated or taken advantage of in the workplace is to ignore the behavior, because it will only get worse. Take action as soon as you are aware of the cunning behavior before it ends up costing someone their job – and that someone will probably be you.

Poverty Is Self Made

You were born poor, but if you die poor you have yourself to blame. Before you finish reading this article, at least 8 out of 10 people will have done something that contributes to their future poverty. Only 2 out of 10 will have done what is required to remain prosperous in the future. The question you need to ask yourself today is, "I'm I among the lucky 2 or the not-so-lucky 8?"

Here are 6 habits that could easily draw your route-map to a life of perpetual poverty.

 

You focus on linear income instead of passive income

Most people focus on linear income in the name of salary, allowances and one-off payments. Wise men on the other hand focus on passive income in the name of royalties, interest rates, value addition and profit.

 

Relying on linear income is similar to using buckets to fetch water from the river. With time, you’ll get too old and too tired to transport them to and fro and that means you’ll have to starve for as long as you don't go to the river.

 

Relying on passive income on the other hand is similar to building a pipeline. It may require a lot of work at the beginning but with time, you’ll no longer have to go to the river to get water – the river will come to you and you'll not starve.

 

This is the most fundamental principal of wealth creation that most (including you) are oblivious about.

 

You’re still waiting to start your journey of success

Everyone wants to succeed but very few people are willing to step into the cold waters. Do you see the problem here? In the history of the world, no marathon race has ever been won (or even finished) by someone who never left the starting line.

 

As you’re stuck saying that you have no enough capital to start, someone else is busy making good use of whatever little they have.

 

As you’re busy lamenting that there are no business ideas, someone else is busy sharpening his innovation claws.

 

When you’re busy complaining about a problem in your society, someone else is busy thinking how to start a business that solves that problem.

 

Continue waiting at the starting line and poverty will soon find you there to keep you company.

 

When you earn more you spend more

Consistently raising your expenditure is a good way to accumulate debt and to remain stuck in the echelons of poverty. To stay out of bad debt, you will either need to find a way to earn more or spend less. The first and best option is to find ways to earn more and keep your expenditure constant.

 

As you know this can only be done by creating multiple streams of income and lot’s of thinking is necessary in that case.

 

The second option is to simply cut on unnecessary expenses. The money that is saved from these budget cuts could be used for embarking on future investment programs.

 

You complain instead of committing

“Life is too expensive”; “It’s hopeless; I’ll never get out of debt”; “I don’t earn enough money.” Have you ever uttered any of these statements before, or perhaps all of them? Old habits die hard; however, as long as you do nothing to change; then you and your coming generation have a direct ticket to the land of poverty.

 

Stop complaining and making lame excuses. Instead, take responsibility for your non-productive habits and focus on changing them – then do it!

 

You live for today, hoping tomorrow will care about its worries

In the 1950s a scientist from Harvard University studied the reasons for upward socio-economic mobility. He wanted to know how comes some generations get wealthier while others get poorer. All his research brought him to a single factor that he concluded was more accurate than any other thing in predicting success – he called it "The Time Pespective". 

 

Time perspective is basically how far you project into the future when you make a decision today. An example of a long-term perspective is when a wise family man buys land or insurance for their child, even though he or she will not need it for the next eighteen years. This is a long-term approach that involves sacrificing in the short term to assure better outcomes in the long-term.

 

Most people remain poor because their “time perspective” is focused on short-term goals such as meeting basic lifestyle needs, buying luxury items, paying rent etc…are you one of them?

  

You just don’t get it!

The problem is that you keep learning but you don’t get it. You’re educated but you've never internalized what your teachers told you. You have knowledge but you don't want to think too hard how to use it. You're still stuck at the starting line all along because you don't want to start small and grow bit by bit from there. You're still stuck in the lottery mentality hoping that one day you'll wake up and voila! discover "the newest, incredibly easiest way to get wealth."

 

Most people remain poor, not because they don't have the knowledge. But because they don't LEARN BY DOING. They just don't get it!

 

Final word

Being wealthy and prosperous requires more than just physical ownership. It is a state of happiness, well-being while wishing the same for others. So while you are working to escape from poverty, remember to be happy along the way!

 

 

EPF New Retirement Age 60

The Employees Provident Fund (EPF) is considering realigning its members’ withdrawal age for retirement savings closer towards the retirement age at 60, said chief executive officer, Datuk Shahril Ridza Ridzuan.

He said the country had to address the issue of withdrawal at 55 versus the new retirement age at 60, otherwise it would be a burden to the society to manage people who are retiring without enough money in their accounts.

Shahril cited independent research conducted by economists as well as EPF’s internal research that showed the average people tend to exhaust their retirement savings within three to five years after making full withdrawal.

 “Roughly about 70 per cent of people who withdraw their retirement savings in full will essentially deplete the money within three to five years time. “Malaysians now make the withdrawal first (at 55) before actually retiring (at 60), and we are looking at this issue for the right policy response,” Shahril told a media briefing here today in conjunction with the release of the pension fund’s 2014 Annual Report.

He said while the EPF recommended an amount of at least RM196,800 upon retirement, statistics showed that only 22 per cent of active 54-year-old contributors met this minimum last year. Even more alarming, 68 per cent of all EPF members of the same age had less than RM50,000 in their accounts, he said.

Information from the EPF’s report showed that the basic savings is set at RM196,800 to give a monthly income of RM820 for 20 years until age 75. It also stated that based on the retirement age for Malaysians of 60 years, and the life expectancy of 72.6 years for men and 77.2 years for women, the total savings (RM196,800) would require a retiree to survive on just RM700 a month for the rest of his or her life.

This is even less than the poverty threshold of RM830 per month in 2012 as declared by the Statistics Department. “It is important to start planning for retirement as early as possible because acquiring the savings habit requires discipline and adequate time. “The longer one saves, the more one accumulates in one’s retirement cache,” the report said.

A good plan ensures that a desired lifestyle is possible at retirement supported by sufficient income, but currently, the only significant form of savings for most Malaysians is the amount they accumulate in the EPF. The EPF said it had a pilot project aimed at increasing knowledge on basic financial and retirement planning by offering a retirement advisory service at its two branches in Kuala Lumpur and Petaling Jaya.

Post Insurance

SingPost and insurance company AXA announced on Monday that their partnership, AXA@POST, will now allow customers purchase general insurance at 34 post offices across the island.

This is in addition to the life insurance options that were made available at SingPost branches earlier this January - after the companies announced their exclusive 10-year postassurance partnership in July 2013. AXA hopes to expand to 44 branches, as well as offer business solutions by Q3 2015.

AXA is targeting SMEs, overseas Filipino workers, and expats and expect approximately 25 per cent of sales, on the life insurance from this distribution channel. With up to five financial advisors at each branch, as well as iPads displaying solution information to post office customers, AXA hopes to use this partnership to reach customers through a new channel.

AXA is a multi-access company working with agents, brokers, financial advisors and conduct direct business. What we want is to add community service - the post office - to our wide range of multi-access tools in order for clients to be able to choose.

LAIM Forecast 2015

The life insurance industry is expected to record a growth of between 5% and 10% in insurance coverage this year according Life Insurance Association of Malaysia (LIAM). The industry recorded a 6.9% growth in insurance coverage amounting to RM1.17 trillion in 2014 compared with RM1.09 trillion recorded in 2013. Total premium rose 9.3% last year.

The industry does pay out a significant amount, in terms of medical claims and bonuses to customers, which amounted to RM8.42bil last year compared with RM6.94bil in 2013.

Today, the life insurance and family takaful provides insurance protection for 55.5% of the Malaysian population. The Government has set a target that at least 75% of Malaysians should be insured by 2020. Strategies included looking at the rural areas as the concentration now was in urban areas. Possible deployment of a different distribution system, on how to tackle rural residents who have basic insurance coverage.

 

LIAM has 16 members comprising 14 life insurance and two life reinsurance companies.

Live Longer - Be Kinder

Gertrude Weaver, 116, believes the key to longevity is treating other people with kindness. Weaver, born on July 4, 1898, lives at a senior care facility in Camden, located in the US state of Arkansas, where she exercises in her wheelchair three times a week and eats three meals a day at the facility’s dining room.

“I treat everyone the way I want to be treated,” says Weaver on her 116th birthday when she received a letter from President Barack Obama.

Postive Attitude

A positive attitude helps you cope more easily with the daily affairs of life. It brings optimism into your life, and makes it easier to avoid worries and negative thinking. If you adopt it as a way of life, it would bring constructive changes into your life, and makes them happier, brighter and more successful.

With a positive attitude you see the bright side of life, become optimistic, and expect the best to happen. It is certainly a state of mind that is well worth developing.Simple Tips for Developing a Positive Attitude:

• Choose to be happy. Yes, it is a matter of choice. When negative thoughts enter your mind, just refuse to look at them, doing your best to substitute them with happy thoughts
• Look at the bright side of life. It's a matter of choice and repeated attempts
• Choose to be optimistic
• Find reasons to smile more often. You can find such reasons, if you search for them
• Have faith in yourself, and believe that the Universe can help you
• Associate yourself with happy people
• Read inspiring stories
• Read inspiring quotes
• Repeat affirmations that inspire and motivate you
• Visualize only what you want to happen, not what you don't want
• Learn to master your thoughts

Negative Attitude

7 things negative people will do to you. They will...
1. Demean your value;
2. Destroy your image
3. Drive you crazily!
4. Dispose your dreams!
5. Discredit your imagination!
6. Deframe your abilities and
7. Disbelieve your opinions!

Stay away from negative people!” ― Israelmore Ayivor

Office Politic

Office politics often involves power struggles and conflicts of opinion. Avoiding politicking in the office requires steering clear of gossip and refraining from nonconstructive criticism of others. A strong work ethic that prioritizes goal achievement helps to create greater integrity in the workplace. Here are some strategies for avoiding office politics.

Focus on the goals of the business or organization. Always remind yourself of your professional goals and role in the organization to keep your thoughts on productive tasks and discussions. Some office politics and gossip result from fear, feelings of boredom or lack of purpose. Staying purposeful decreases the amount of time available for engaging in gossip or analysis of coworkers' behaviors.

 

Work hard. The best way to ensure a promotion is to perform high-quality work. Some office politics is related to disputes about who deserves a promotion or more power in the workplace. A diligent worker does not need to degrade others or pit people against one another in order to advance, because a good performance speaks for itself.

Observe the unspoken rules of the office. For example, in some work environments, working long hours is a sign of commitment and dedication. In other offices, an employee who consistently stays late may be considered inefficient, needing more time to do tasks that others completely more quickly. Paying attention to these dynamics helps to avoid becoming the target of criticism.

Avoid gossip and backbiting. Discussions about the behaviors, habits, weaknesses and appearance of others can backfire or constitute a waste of time.

Consider the motivations behind the gossip. If a coworker approaches you with a story about another employee's mistake, try to understand the motivations behind the storytelling. The goal may be to belittle another person, chat out of boredom, or to help the coworker. If the intent is to degrade the person, find a way to avoid the topic.

Change the subject. Find ways to change the focus from the weaknesses of others to more productive topics. Some analysis of worker behavior is necessary, but that type of assessment is usually better addressed directly by a supervisor.

Be unavailable for idle chatter. Staying productive and committed to your work tasks will make it easier to be less available for fruitless discussions. A consistent pattern of not engaging in the criticism of others lets people know that you prefer to avoid office politics. It also might increase the trust of coworkers when they realize that you do not spend time discussing them.

Engage in fact finding missions. For example, if approached by another team leader about the negative motivations of the department head, ask for the facts. Determine how the negative conclusions were reached and if there are misinterpretations. If the team leader is referring to a recent memo from the department head, read the memo together. Arrange to meet with the department head to achieve greater understanding.

Observe the behaviors of respected employees and company leaders. For example, managers who treat everyone with respect, speak well of others and show appreciation for tasks well done are positive behavioral examples. These individuals usually avoid office politics by maintaining a positive attitude and dealing truthfully with people.

You Need A Life

If anyone depends on you financially, then you need life insurance. Some people need life insurance more than others, though. Here are four groups that need it the most.

Married Couples
If both you and your spouse work, then both of you need life insurance to cover your incomes and maintain the same standard of living if one of you were to die. If only one of you works outside the home, it is crucial that the breadwinner be insured. But stay-at-home spouses may need life insurance, too. If you have kids at home who will require child care or if you have a significant amount of debt, a term life insurance policy can protect the surviving spouse from having to shoulder these costs alone. Unmarried couples who maintain a household together should consider life insurance for these same reasons.

Parents
All parents with children at home should have life insurance — even those who stay home with the kids. For working parents, have enough coverage to replace your income, pay off debts and ensure that the family will be taken care of. For stay-at-home parents, be sure to calculate the cost of the services you provide, including cooking, child care and transportation, when figuring out how much coverage you need. Also factor in the potential loss of income if the working parent has to take time off from work if you were to die.

Business Owners
A small-business owner has a special dependent — the business. A life insurance policy can ensure your company keeps going after your death. Business owners can take out a special life insurance policy on themselves, a business partner or a particularly important employee. These special policies are called “key man” or “key employee” insurance and pay out if the insured individual dies. The purpose is to cover business income losses associated with losing that person.

Homeowners
Your home is your castle, and you may want it to stay that way if you die before your mortgage is paid off. Homeowners who want to keep their home in the family can cover their mortgage with a term life insurance policy or purchase mortgage life insurance just for that expense. Mortgage life insurance can be an option for homeowners who are denied regular life insurance for medical reasons.

Life insurance isn’t at the top of many people’s to-do lists. But if you have a family or others who depend on you, it’s essential to make sure they are provided for in case the unthinkable happens.

Businessman Need a Life

Life insurance is important on the personal level, protecting families from hardships in the event of a breadwinner’s death. It also has numerous business benefits.

For business owners, life insurance policies can help keep their company going in the event of a death, either their own or the death of a key business partner or employee. Life insurance can also reduce the chances that the business will be sold under duress, and it can help fund emergencies and business growth.

When speaking with business owner clients and prospects, producers should consider bringing up the following business uses for life insurance:

Liquidation prevention. If a business owner dies suddenly and without life insurance, his family may need to sell off assets quickly in order to pay the bills. These urgent sales often mean that families accept offers that are below market value. Life insurance can prevent this. The policy payout means families can take their time making business decisions and carefully consider all offers and options.

Key man coverage. If a business partner or key employee dies, what happens to the company? Purchasing life insurance on vital business partners and employees can give organizations the time they need to replace that individual, without worrying about the financial implications for the business. The life insurance payout can also be used by the surviving partners to buy out the portion of the business owned by the deceased partner.

Cash accumulation. In addition to providing protection, some life insurance policies build cash value over time. Business owners can purchase these policies and tap the accumulated cash in case of an emergency, for business expansion, or to supplement retirement funds.

Cancelling Your Life Insurance

Life insurance policies aren't always for life. Whether you have a whole life or a term policy, there are sometimes good financial reasons why you might decide to cancel it.

Giving up a policy isn't an easy decision. Once people decide to buy life insurance, they rarely opt out. Just 5.7% of individual policies were terminated in 2013, the fifth straight year the rate declined, according to the American Council of Life Insurers.

Still, dropping a policy isn't necessarily a bad idea, particularly if you've had a major lifestyle change. But there might be hidden costs, and if you'd like to stay insured, you could have options other than cancellation.

Here are some reasons to consider a change.

You have fewer financial obligations
Most people purchase term life insurance to cover specific expenses, such as to ensure support for children living at home or to help pay their college tuition. Those expenses may decline or disappear over time. As people get older, the original reason they had for taking the life insurance policy may no longer be relevant.

In the best-case scenario, you pay off your mortgage and see your children graduate college around the time your insurance term expires. In that case, you can simply elect not to renew coverage. But if you've miscalculated and would prefer not to pay premiums, speak to your agent. If you have what's called a return-of-premium rider on your policy, you could get a check back if you cancel.

You've experienced a loss of income
Term policies tend to be relatively inexpensive. But if you've bought a whole life insurance policy, you'll often pay at least twice as much, and that could strain your budget if you've lost your source of income.

Unfortunately, cancelling a whole life insurance policy can be complicated. In many cases, you'll lose value if you cancel in the policy's early years. There may also be tax consequences for cancellation, and buying a new policy in the future will be more expensive.

Job loss can also bring the importance of life insurance to new height and many maintained his policy during a recent period of unemployment. Life insurance is really crucial for people who are in transition. If you'd prefer not to cancel your policy during a tough time, you do have options. "You may be able to reduce the face amount rather than dropping the policy outright.

You're no longer happy with your plan
Some consumers cancel a life insurance plan because they find they can get a better deal elsewhere, especially on term life insurance. It's gotten a lot more competitive in the last few years. People [are] getting new policies at better rates.

Others might wish to switch from whole to term life insurance. Often [whole life insurance policies] are dropped when people fail to see the 'gains' materialize that they thought would come out of them.
There seems to be a general misunderstanding … about when the cash-value life insurance plans will actually begin to develop 'cash' in the cash account. Swapping plans? Read your new policy carefully before committing, and never cancel a policy until you're 100% certain the new policy has gone into effect.

The bottom line
You might cancel your life insurance for other reasons. Changes to your personal circumstances, including business failure or divorce, can affect your need for coverage.

But if you do have a need, and you can afford it, there's no substitute for the right amount of life insurance. Keeping your policy active should be a priority – and for most policyholders, it is. During the recession, lapses didn't increase dramatically, even though unemployment nearly doubled.

Captive or Independent Agent

When shopping for life insurance, the type of agent you choose could determine the price you pay.
Generally, there are two kinds of life insurance agents — captive and independent. Nearly half of new individual life insurance policies are sold by independent agents, with captive agents accounting for about 41%, direct marketers with 4% and other channels accounting for 6%, according to the most recent figures from the Insurance Information Institute.

A handful of life insurance companies depend exclusively on captive agents, but most rely on independent agents or a mixture of captives and independents. Both types of agents can provide the kind of quality expertise you need to make one of life’s important financial decisions. But there are some big differences between the two.

Captive agents
Captive agents work directly for a single life insurance provider and are limited to the products of that company. For example, if you call a captive agent for State Farm, he or she will market and try to sell you only State Farm products. These agents’ commission, if they have one, is set by their insurance company, and they are paid by that company.

On the plus side, these agents are experts in what their insurance companies have to offer. But they cannot help a client who doesn’t need or qualify for their company’s products. And captive agents usually have quotas to hit to keep their job and earn bonuses. Although that’s not terribly different from independent agents, you might feel a bit more pressure to buy car insurance from a captive agent when all you really want is term life.

Independent agents 
Independent agents, meanwhile, work for themselves and not any particular insurance company. They sell policies from a variety of life insurers, not just one, and make most of their money through sales commissions and bonuses from the carriers.

Independent agents can save you some time by getting quotes from a few different insurers, which could mean a better price. However, they may be less objective than you think. Because they make most of their money off commissions, independent agents may push you to buy a policy that gives them a higher commission — and not necessarily a better deal for you.

Which is best?
The type of life insurance agent you choose depends on your needs and your budget.

If you’re looking for multiple quotes from different companies, an independent life insurance agent probably is the way to go. It can save you time and money. On the other hand, some insurance companies may offer policies only through captive agents, and these agents bring a lot of knowledge to the table. You may have to get a few more quotes, but you could end up with a better deal. In some cases, especially if you are a well-informed consumer, you may choose against using an agent entirely and get a life insurance quote directly from the company.

Life Insurance Without Commission

A new rule which allows life companies t
o sell insurance without commissions and financial advice is about to come into force in Singapore.

From April 7, consumers will be able to directly purchase insurance – like lifetime financial protection – from a provider, according to a new rule introduced by the Monetary Authority of Singapore (MAS).

 

As well as the introduction of direct purchase insurance (DPI), the MAS has helped build an interactive web portal called comparefirst.sg which allows consumers to easily compare insurance products sold by different life companies.

 

Both initiatives have been introduced under Singapore’s Financial Advisory Industry Review (FAIR), which aims to stamp out unfairness in the city-state’s financial industry through amendments to the Financial Advisers Act and Insurance Act.

 

Premiums underlining direct purchase insurance – which can be identified by the word “direct” in their product names – are lower than comparable life insurance products because no commissions are charged. MAS said these products will be easier for consumers to understand and come equipped with a factsheet and a checklist.

Natural progression

Tim Searle, chairman of Singapore-based financial advisory firm Globaleye, said his advisers are ensuring their clients are aware of this facility, but that Globaleye clients who have more complex requirements when compared to the mass market would “prefer to seek specialist advice and solutions that transactional type platforms cannot support”. 

 

He said the DPI initiative is a natural progression of things. “The baby boomer money is going to start to dry up and the generation who welcomed a sit down over a cup of coffee with their financial adviser will diminish. 

 

“The new generation is going to need a new approach that comes with a cost benefit, and online platforms will feature heavily in that offering. 

 

“But there cannot be a total replacement by going online since complex financial solutions require a tailored result from a qualified and regulated adviser. Just because I can google medical information doesn’t mean I’m going to take my appendix out myself.”

Purely informative

Meanwhile, the new portal Comparefirst allows consumers to quickly compare the premiums and features of similar life insurance products to help them make informed decisions about which policy to buy and how much coverage to get. 

 

As the portal is purely informative, customers will still need to speak to their financial adviser or the life company to purchase the product.

 

The interactive tool is a collaborative effort by the Consumers Association of Singapore, MAS, Singapore’s Life Insurance Association, and MoneySense. 

Another avenue

Earlier this week, Manulife Singapore announced it is launching two new direct purchase products.

 

Hitesh Shah, chief marketing officer of Manulife’s Singapore-based arm, said the firm is supportive of the direct channel which “will offer another avenue for people to access insurance products and provides additional choice for self-directed and knowledgeable consumers who know exactly what they are looking for.”

 

However, he said experience from other markets has shown that direct insurance sales usually only takes up only a small share of the market. 

 

“Given the complexity and level of customisation in life insurance, we believe most consumers still value the expertise of an experienced financial planner in helping them to make important long-term financial decisions about their future,” he said.

 

“Most importantly, consumers need to ensure that they have sufficient coverage to meet their needs, as research shows that there is still a significant protection gap in Singapore.”

Stages in Life for Insurance

When you’re just starting out on your career path, life insurance may be the last thing on your mind, for good reason.

If you are young and single, you probably don’t need to think about life insurance just yet. Even the Insurance Information Institute, an industry-backed group, says: “In most cases, if you have no dependents and have enough money to pay your final expenses, you don’t need any life insurance.”
But then you get married, buy a house, have a child — and you start to realize there are people who would suffer financially if you died. How do different life events affect your life insurance needs?

Marriage
If you die, your spouse will need at least enough money to cover funeral costs and any taxes and expenses associated with winding up your estate. This generally adds up to $15,000 or more, according to the Insurance Information Institute. Your spouse also may be depending on you to help pay the rent. Maybe you’re covering all the living costs while he or she finishes school. Make sure to designate your spouse as your beneficiary.

Buying a home
Now you have a mortgage that depends on your income. You may want to boost your insurance to help cover that cost.

Having a child
Children are expensive. If you died, your spouse would face the costs of child care, clothing, food, schooling and much more. If you are a single parent, or if both parents died, that burden would fall to a guardian.

As the Insurance Information Institute puts it: “You want to be sure the family has the resources to maintain the home and have all the opportunities you want them to if you are not there.”
Don’t name minor children as beneficiaries, the National Association of Insurance Commissioners warns. Rather, set up a trust or designate a custodian.

Divorce
In the event of divorce, you probably want to change your policy quickly so your ex is no longer your beneficiary. That said, if you’re depending on child support, you may want to stipulate as part of your divorce settlement that your spouse buy a life insurance policy specifically to cover the payments if he or she dies, the National Association of Insurance Commissioners advises. “You should be named as the owner and beneficiary of such a policy to prohibit your ex-spouse from changing the beneficiary name without your agreement,” the group suggests.

Getting a new job
A couple of factors come into play with a new job. For one thing, new jobs often pay more, and your family may quickly come to depend on that extra money. That means you’ll need to boost your life insurance policy to match. Also, were you depending on a policy through your former employer? You may be able to take that plan with you or replace it with one from your new workplace.

Paying off your mortgage
The end of your mortgage payments cuts your family’s living costs significantly. This may mean reducing your insurance coverage.

Retirement
Before punching out for the last time, check with your employer to see whether the company’s group policy is portable. You may be able to buy continued coverage without a medical exam.

Also, retirement is a time when many of us have fewer financial commitments, such as mortgage payments and young children, and we may have accumulated greater savings that would cover costs if we died. If your spouse dies and you remarry, you’ll want to update your beneficiaries, assuming you still carry life insurance.

Sometimes it makes sense to allow your term life policy to lapse when your income and expenses are more limited. Or you may want to consider switching to permanent life insurance, which can act as an investment vehicle.

Some seniors consider “final expense” policies, which typically have relatively small payouts of $10,000 or $25,000 to cover end-of-life costs. These policies may be sold as “guaranteed issue,” meaning that no medical exam is required, but that can add to their cost. Also, final expense policies typically won’t pay the full benefit if you die in the first two or three years of the policy, the National Association of Insurance Commissioners warns.

How Much Life Do You Need

Not many people enjoy thinking about their death, and fewer still even remotely consider the possibility of an early death. Still, one should take the time to think about it, especially when it comes to the financial safety of your family.

Do you have enough money to pay all your debts and cover your funeral expenses? What about taking care of your family after you are gone? Life insurance is designed to create a safety net for your family in the tragic event of your untimely passing. But how much do you really need?

Should everyone have life insurance?
Before we can even consider how much life insurance you should purchase, you need to decide if you really need it at all. Buying life insurance isn’t right for everyone. If you are single and don’t have any dependents, you might not need it. This is assuming you have enough money saved up to cover the cost of your funeral expenses and debts if you do pass away. If you do not, you may want to consider life insurance even if no one is counting on the money you bring in.

You don’t want your family members having to pick up the tab for your death. So take a hard look at your finances and the money you have saved. If you have enough saved through your various accounts to cover all your expenses when you die, there is simply no reason to waste the money on life insurance.

Life insurance and your age
One of the greatest myths about life insurance is that it is harder to get as you get older. Insurance agents are notorious for hinting that this is true, although they will never come out and say it directly. That is because it isn’t true. If you purchase life insurance when you are young, your premiums will be very low compared to waiting until you are older. That is because the insurance company is betting on you living. If you do happen to die early, then you were a bad investment. However most young people live for a long time, making it a pretty safe bet for the insurance companies.

If you didn’t pick up life insurance when you were young, don’t believe that you can’t get life insurance. Insurance companies will charge you more for your insurance, as you will present a greater risk to the company. However, you should still get approved. The question becomes, can you afford to pay the higher premiums? Once you reach retirement age and are on a fixed income, it will most likely become more difficult to afford the payments, but the ability to qualify for life insurance won’t go down just because of a few extra years under your belt.

Determining your insurance needs
The largest part of choosing a life insurance policy is determining exactly how much you will need to take care of the expenses of your death as well as be sure your family members are taken care of if something does happen to you.

How much debt do you currently have?
All of your debts must be taken into account when you pass away. This includes your mortgage, car payments, and credit card debt. In any policy you take out, you want to be sure you have enough money to cover the costs plus any extra interest that gets added to the loan. For example, if you owe $100,000 on your home plus you have $20,000 left to pay on your car and $10,000 in credit card debt, you will need a minimum of $130,000 to pay off these debts, although you may want to consider adding a little more to be sure any interest is covered.

Does your insurance need to cover income replacement?
If you have a family that counts on your income to survive, you may want to consider adding in enough money onto your life insurance policy to ensure that they don’t lose that income if something unfortunate happens to you.

For example, if you have an income of $50,000 a year, and want to be sure you have enough money to cover 20 years of your income, you would need a minimum of $840,000 to give your family enough money after you are gone. You should also factor inflation into your final calculation. Usually, you can do that by simply adding an extra year of your salary to the final figure.

Will the policy need to cover other future expenses?
On top of your income and any debt, you will also want to cover other future expenses that go above and beyond your salary replacement. Do you have children? If so, you may want to build in a set amount of money for them to go to college someday without needing to take out thousands of dollars of loans in order to get their education.

It’s difficult to predict exactly how much the college tuition will be when your children are ready to head off to school, but you can look at tuition in your area and make an educated guess. Whatever figure you come up with, add it to the total of your policy.

Does your insurance also need to cover others?
There are most likely other people in your life who may need to be insured. As a rule, you only insure people who would constitute a financial loss if they died. The death of a child, while emotionally devastating, doesn’t cause you to lose income. But the death of an income-earning spouse is both emotionally and financially devastating. This financial loss is the perfect reason to purchase life insurance for them as well.

Life insurance is one of the best ways you can secure the future of your family in the event that something happens to you. Everyone wants to be sure their loved ones are safe and secure after they are gone, and life insurance is one of the easiest ways to do that. But, you need to carefully consider what you need to cover in the event of your death so you don’t under- or over-buy on your life insurance. It’s the best way you can be sure your loved ones are taken care of after you are gone, while ensuring that you don’t have to pay too much for that safety net while you are alive.

Bangan In Parliament

 "If you don't want to pay taxes, go live on the moon. GST helps the country and the rakyat. If the country goes bankrupt, the people will die" -Langkawi Member of Parliament Nawawi Ahmad -