Putting off Purchasing Life Insurance

Life insurance is something most of us agree we need but don’t actually buy, according to research.
 

First, the numbers. The insurance and financial services industry research group LIMRA reported in 2013 that 30% of U.S. households had no life insurance at all, and an additional 26% had only group insurance (typically offered through employers, and often less than people need).

Meanwhile, half of U.S. households said they needed more life insurance, but only 8% said they were very likely or extremely likely to buy it the next year.

Why is that?
Here are some common reasons people don’t buy life insurance.

Cost. In a 2014 survey by LIMRA and the nonprofit insurance group Life Happens, 63% of respondents said they didn’t buy life insurance because they thought it was too expensive. That could mean they thought it wasn’t worth the cost or they couldn’t fit it in their budget. Representing the second camp, 69% said paying for basic living expenses such as housing, food and utilities kept them from buying life insurance, while the cost of extras like Internet, cable and cellphones was a barrier for 52%, according to the study.

Misconceptions. Asked how much they thought a $250,000 term life insurance policy for a healthy 30-year-old would cost, people under age 25 gave a median estimate of $1,000 a year, while older adults said $400, LIMRA and Life Happens reported. The real cost is about $150.

Other financial priorities. Other financial priorities kept 59% of respondents in the LIMRA/Life Happens survey from buying life insurance. In 2013, LIMRA reported that 67% of consumers listed saving for retirement as a top financial concern, while fewer than 40% cited other concerns that life insurance would address (such as premature death, funeral costs and leaving money for heirs).

Other demands on attention. Many of us start thinking about life insurance when we have children. But that’s also a time when we’re harried and sleep-deprived. Actually buying insurance can get shoved into our to-do list’s metaphorical diaper pails. LIMRA and Life Happens reported that 30% of people said they didn’t buy insurance because they hadn’t gotten around to it.

Complexity. Once we start looking into it, we’re confronted with term life insurance, permanent life insurance and their many variations. The LIMRA/Life Happens survey found 37% of respondents were unsure how much life insurance they needed or what type to buy. Given our limited attention span, it’s no wonder nearly 19 million consumers have gotten stuck in the shopping process, according to a recent LIMRA report.

Lack of trust. Some people don’t buy life insurance because they don’t trust insurance companies (38% of respondents) and insurance agents (37%), according to the survey.

Unpleasantness. Most of us don’t like thinking about death, and 30% of people gave that as a reason for not buying life insurance, LIMRA and Life Happens reported.

OnLine Purchase Life Insurance

FROM April 7, consumers looking to purchase life insurance products will be able to compare more than 200 products that are available on the retail market through a web portal.

Called compareFIRST, the web aggregator will allow consumers to compare the premiums and features of five classes of products.

They are: term life insurance, whole life insurance, endowment policies, investment-linked policies, as well as a new class of basic life insurance products known as direct purchase insurance (DPI).
Under the web portal, consumers will be able to compare up to four products at a time, using its drag-and-drop feature.

Information such as the product summary, the product brochure and credit rating of the insurer will be available. Twelve life insurance companies will also start to sell the DPI, which are sold without commissions and financial advice, on April 7. This will be done either through their customer service counters or websites.

The Monetary Authority of Singapore (MAS) on Tuesday said under the DPI, consumers can choose from term life insurance, whole life insurance and optional critical illness riders. As these basic policies are sold without financial advice, there is no commission and premiums are lower.

The rollout of the web aggregator and DPI follows the acceptance of the Financial Advisory Industry Review (FAIR) panel's recommendations in 2013. The move aims to empower consumers to make informed decisions through better access to information and it comes against the backdrop of mis-selling complaints over the years.

Said Lee Boon Ngiap, assistant managing director (capital markets) at MAS: "Buying a life insurance product is a decision for the long term. We strongly encourage consumers to use compareFIRST and assess the suitability of the various life insurance products offered by different companies before they buy a product." compareFIRST is the world's first web aggregator by a regulator.

In advanced markets such as the United Kingdom, web aggregators are run by commercial entities and have been criticised for pushing products from selected insurers.

Entrepreneur Tips

Millennials have become known for their desire for instant gratification. This is especially true in their careers: Instead of waiting around for that big promotion, young professionals are increasingly choosing to create their own executive positions by becoming entrepreneurs.

While they may have the requisite passion and drive, Gen Y's age and lack of experience may mean they require a little more guidance in the leadership department. Ten business leaders, many of whom founded companies or rose to leadership positions at a young age, offered their words of wisdom for today's generation of entrepreneurs.

Work hard to get ahead. "I have learned that success may come as a result of two things. One is luck and one is hard work. I chose the latter. Hard work and self-discipline are a common denominator between most business leaders, which proves that when you think you are working too hard, you are probably right, but it is also the reason you are where you are." – Amit Kleinberger, CEO of Menchie's frozen yogurt franchise

Strive for success, but remain humble. "First and foremost, any young founder must have an insatiable hunger for success and winning — and be resolutely prepared to work your a** off, as your competition most certainly will. Most importantly, stay humble and listen. Your team absolutely needs to understand that you're predictably calm and composed for them to flourish."

Allow your "great idea" to evolve and change. "Your idea is a great one, but on the road to fruition, understand that it will look very different eventually. It won't resemble your first concept, nor the second version, but the third, after tons of listening and learning — that's where success will come." – Shawn Mendel, founder of Funley's Delicious healthy snack line

Acknowledge your own shortcomings. "Know what your weakness is and hire people around it. The best trait in any leader is to be able to admit their weakest points and build a team to complement it." – Ashley Morris, CEO of Capriotti's Sandwich Shop franchise

Hire (and promote) the right people. "Hire the best, most talented, most knowledgeable people you can get to be a part of your senior management team early as you can. Give them equity to keep them motivated. Steve Jobs mentions something about a small team of A+ players being able to run circles around a large team of B and C players. I see that every day. The entrepreneurs [who] hire A players early and get rid of C players early, move faster and more profitably than anyone else." – Scott Jensen, co-founder of Rhythm Superfoods

Ask for help when you need it. "When you're young you have boundless energy and want to do everything yourself, but don't let your early success turn into an early burn out. Sometimes you will have to hire people older than you with more experience and take their advice, because there are times that you may not know best. And there are times you will. Know how to tell the difference, and know when it's time to ask for help." – Jeff Platt, founder and CEO of Sky Zone indoor trampoline park

Seek out a mentor. "As entrepreneurs we allow our ideas to rule our decision making and often throw analysis and planning out the window. A good mentor will help you think about things you have no experience with." – Jeff Salter, founder of Caring Senior Service franchise

Don't make promises you can't keep. "Your word is everything. If you say you are going to do something, do it. Whether it is a volunteer opportunity or your job, always follow through. [But] it is important to know when to say no. Say, 'I can't do that, but this is what I can do.' Offer what you can, without committing to something you are going to drop the ball on." – Lais Pontes, president and founder of The Pontes Group PR and marketing firm 

Always challenge and encourage yourself. "Young leaders must aspire to continually challenge themselves and focus efforts on improving their strengths as much as their weaknesses. You can be supported by the biggest team and staff, but sometimes as a leader it can be lonely. Those are the times you should find the drive and encouragement within yourself." – David Norsoph, owner and founder of Norsoph, Alcalay & Orner LLP (NAO Law)

Earn your team's respect. "Being a leader means being in command of yourself and your peers. Without either there is no balance. Show compassion and earn the respect of others. Learn to listen and guide." – Michael Kuang, owner and founder of Syphon Fitness

Tips For Leadership

When you take on a managerial or executive position, one of the first things you'll likely want to do is work on honing your leadership skills. But there's more to becoming a great leader than attending a manager training session, or sending team emails to make sure everyone is doing their job. You can build leadership skills with small but effective actions every day. Here are seven simple habits and practices to help you guide your team better.

Stay up-to-date on industry trends. When you're passionate about your job, you want to do everything you can to get better at it, and bring your company up with you. Keeping on top of ever-evolving industry trends is one way to show your dedication — and lead your employees toward that same passion.

Spend some quality time with your staff. You know the names and job functions of your team members, but do you really know who they are as people? Getting to know your staff on a personal level will not only help them feel more valued, but help you manage them better, too.

Try something new. The best leaders are those who can think outside the box. William Vanderbloemen, CEO and president of Vanderbloemen Search Group, advised taking on a task you don't normally do, preferably one you've never tried before, to help out your company and your team.

"People who show an ability to anticipate a company's needs and find an answer even before being asked a question are people who get promoted," Vanderbloemen said."Leaders should ask themselves, 'What can I do to further our company that isn't in my job description?' The skills learned in figuring out a project and carrying it through to completion will go a long way toward leadership development and career advancement."

Learn from your team. As every good leader knows, being in charge doesn't mean having all the answers. One way to find those answers is taking direction from the people you manage.

"Drawing [leadership] insights ... means getting in the trenches and learning from the experts on my team," said Joe Freitag, global brand director of eyewear retailer Arnette. "[I see] how they achieve top-level results and ask them to teach me what they know. Their approach to a topic that is foreign to me helps me open my view and see my own challenges in a different light."

Analyze your mistakes. At some point, every leader is going to make a mistake or two. Rather than try to ignore it or cover it up, it's better to sit down with your team members and talk through the situation so you — and everyone else — can learn and grow from it.

"[Ask yourself,]What was my thought process in making that decision? Why didn't it result with the outcome I thought it would? What can I do in the future to adjust and end with a different result?" said Brian Ruben, co-founder of Solé Bicycles. "Discussing this openly with your team shows [that] you are not above or better than anyone and breeds a positive attitude and environment that encourages personal and professional growth."

Mentor someone. Regardless of whether you hold a leadership position, you likely have been — or will be — asked for professional advice from a younger, less-experienced friend or colleague. You may not develop a formal mentorship, but pay close attention to the conversations you have with these individuals: They might help you become a better leader.

"Prior to leading teams and eventually starting a company, I had the opportunity to mentor younger family friends," said Doug Baldasare, founder and CEO of phone-charging kiosk provider ChargeItSpot. "Those individuals may have been considering a career switch, applying to grad school or looking for their first job. Coaching them through it helped me to understand the interpersonal nuances of leadership and gave me the confidence to help guide others as I grew in my career."

Get out of the office. Becoming a better leader doesn't only happen in the confines of day-to-day business. Sometimes what you do "off the clock" can translate pretty well into your professional leadership role.

"Show leadership in as many other parts of your life as possible," said Chris Toy, founder of group chat app Bindle. "Volunteer to cook dinner for friends, organize parties [or] take control of your flag football team. Like anything, practice makes perfect."

Mortgage Insurance

Your home is one of the biggest investments you’ll ever make, so families carrying a mortgage should buy life insurance.

Almost 21 million Americans, or 29.3 percent of homeowners, own their homes outright and have no mortgage, according to research by Zillow. But the majority of us are still making those monthly payments. Would your family be able to continue paying the mortgage if you were to die unexpectedly? Would they lose the house?

Mortgage life insurance, or mortgage protection insurance, can be a way to protect your family home, but it may be right for only certain homeowners.

What is mortgage life insurance?
As the name implies, mortgage life insurance is a policy that pays off the balance of your mortgage should you die. It’s often sold through banks and mortgage lenders.
The money doesn’t go to your family, but to your lender, and the payout of the policy is your mortgage balance, so the potential payout decreases over time.

Pros
The biggest benefit of mortgage life insurance is its convenience. There is often no life insurance medical exam required to buy a policy. So if you’re denied term life insurance or whole life insurance because of medical conditions, mortgage life insurance may be an option to protect your home.

Mortgage life coverage can also supplement an individual life insurance policy. For example, if your mortgage is paid off with money from a mortgage life policy then your family could use all the benefits from your term or whole life insurance policy for bills and other expenses.

Cons
Mortgage life insurance has limited advantages and serious drawbacks to consider.

The biggest downside is the declining benefit. Even though your premiums stay the same, your benefit amount is always decreasing as you pay your mortgage off. And that premium is often much higher than what you’d pay for term life insurance.

Some argue that mortgage life insurance benefits the lender more than your family because the bank gets the money if you die, not your beneficiaries. While the benefit can take away the financial stress of paying a mortgage, your family could still be left with bills and other debt they can’t afford.

With a term life insurance policy, your beneficiaries can decide how they want to use the money. Homeowners will often buy a term life policy that matches the length of their mortgage – for example, 20 or 30 years. You can also wrap other expenses into the face amount you choose, like income replacement and college tuition.

Many financial experts don’t recommend any insurance policy that only pays certain bills. Term life insurance can provide much better bang for your buck than a mortgage life insurance policy, so research the price of term life before you make a decision.

Accident Versus Life Option

If you think your life insurance needs are covered with an accidental death and dismemberment policy, you’re wrong. Life life insurance and accidental death and dismemberment, or AD&D, are two very different types of policies. Knowing the difference is crucial to buying the right coverage for your needs.

Life Insurance
Life insurance is basic coverage that pays out if you die regardless of the cause of death. You choose the amount of coverage and the policy term ahead of time, and your payments and benefit amount are guaranteed to stay the same. Term lengths typically range from 10 to 30 years. If you die after the term ends, there’s no payout because the policy has expired.

Accidental Death and Dismemberment
AD&D insurance can be purchased as a standalone product or as a rider on a life insurance policy. Unlike life insurance, AD&D policies pay out only if you are killed or injured in an accident. For example, if you die from a heart attack or cancer, there’s no payout. To qualify for a payout for injury, you must lose a body part or the ability to hear, see or speak. If you die in an accident covered by AD&D, your beneficiaries receive the full payout. If you suffer an injury, the policy generally pays out only part of the benefit.

Limitations of AD&D
While AD&D insurance may seem like a good idea, ask yourself if it’s really worth the money.
First, your chances of dying in an accident are relatively slim. According to the Centers for Disease Control and Prevention (USA), just 130,557 of the 2.5 million deaths reported in 2013 were accidental. A lot more people died of cancer, heart disease and other natural causes that would be covered by life insurance.

And if you die because of an accident but not right away, your beneficiaries might not see any benefits. To collect on an AD&D policy, it must be proved that a death or injury was directly caused by a qualifying accident or within a certain time frame after it occurred, usually three months.

AD&D policies often exclude deaths due to high-risk activities such as skydiving or car racing. And deaths caused by a drug overdose, drunken driving (by the insured person), war, complications from surgery, mental illness, suicide or certain other circumstances likely won’t be covered.

Which Is Right For You?
Although AD&D has significant shortcomings, there are times when it makes sense. If it’s free additional insurance coverage through your employer, it doesn’t hurt to take advantage of AD&D.
Overall, life insurance is a better option simply because it provides more coverage and, often, the chance for a higher payout for your loved ones. Although you’ll pay higher premiums for life insurance, it’s worth knowing that your family will be provided for should the unexpected happen — no matter the cause of death.

Reinvent Distributing Life Insurance

Faced with such dramatic shifts in their market, many insurers have fallen into the classic trap of trying to figure out how to sell their existing products, rather than creating new sales engagement models that focus on customers’ real needs.

In order to remain, or in some cases once again become, a relevant investment vehicle, life insurers need to shift to a needs-based, solution-selling approach. Client protection, investment, and retirement needs vary across life stages and demographics.

Changing customer behaviors driven by digital technology have altered the way consumers want to buy. Some prefer a “do it yourself” approach while others rely on adviser-based support models.

Most clients start their shopping process online, but still count on an adviser for the actual purchase decision. Insurers need to gain deeper customer insight to design new offerings and engagement models.

The business of providing guarantees against mortality, morbidity, and longevity risk is so complicated that the process is unlikely to be replaced entirely by a smartphone app – at least not anytime soon. But, to remain relevant and to reverse declining sales trends, life insurers should modernize their products, services, and marketing efforts in four key ways:

1. Understanding the customer. Insurers should be trying a lot harder to discover what customers of today really want. Rather than letting the assumptions attached to their existing products limit how they explore and define customer needs, insurers can gain in-depth insight into what motivates customer decisions through a variety of sources, including social media, analytics, mobile and call center data, and feedback from digital marketing efforts.

2. Developing customer-oriented offerings. New products should be based on real customer needs and made available at a range of price points through a variety of channels. To do this, life insurers need to be able to bring products to market quickly and more efficiently. Digital distribution channels, including mobile and online applications, can provide new sources of revenue by helping insurers sell relatively inexpensive products to new customers. Until now, it has not made economic sense to distribute such products through the traditional life insurance agent channel.

3. Providing a better customer experience. Life insurers need to start thinking less in terms of life insurance as an “event” purchase – bought once and kept in perpetuity – and more as a relationship. By collecting and organizing data from a variety of sources including phone calls, online interactions, and social media conversations, life insurers can personalize what they bring to the customer. Some companies are using analytics to streamline the sales process and develop new products. Vantis Life (formerly Savings Bank Life Insurance or SBLI) uses a simple application incorporating predictive analytics to support its “EZ Life” products — basic term life insurance with policies in the $100,000 to $250,000 range.  Predictive analytics anticipate mortality and longevity rates and help Vantis Life underwrite the policies without the medical examination and tests usually associated with life policies.   

4. Increasing efficiency. Many life policies are still paper-based, relying on manual processes for administering policies and paying out settlements. By automating workflow and decision support, insurers can cut costs while giving customers the immediate responses, tailored products, and personalized service they want.

These four approaches complement one another, and they are mutually reinforcing. Better analytics, for example, make it easier to identify narrow customer segments and carefully tailor products for them. Targeting smaller groups of customers with more specific products results in more finely grained data, and that supports better analytics.

Bankruptcy And Life Insurance

There is this a misconception amongst a majority section of our Malaysian population that a Bankrupt (Malaysian) is not allowed to have a bank account and is not eligible to purchase life insurance. Please allow me the opportunity to clarify.

A Bankrupt can be insured in a smart process that is legal and effective.

Personal Savings Account
A Bankrupt is eligible to a personal saving account with a commercial bank in Malaysia. This personal saving account will enable a Bankrupt to conduct day to day banking transaction. For example, an employer may transfer monthly salary to a personal saving account. Therefore a personal saving account is a necessity for a Bankrupt.

Purchasing Life Insurance
A Bankrupt may not pays for the life insurance premium on his/her own life or on others life. However, a third party with insurable interest on the Bankrupt may purchase a life insurance policy on the life of the Bankrupt and pays for the premium. The Third party is the "Owner" of the policy and the Bankrupt is the "Insured".

A third party with insurable interest on the life of the bankrupt may be:-
1: Spouse of a Bankrupt
2: Children of a Bankrupt
3: Employer of a Bankrupt
4: Creditor of a Bankrupt
  
Nominee of the Life Insurance Policy
The Owner of the policy may appoint a Nominee (Beneficiary) to the policy. The Nominee can be the spouse of the Insured, Children or Parent (if the insured is unmarried). In cases where housing loan is concern, the creditor (Bank) could be the Nominee of the policy. Or the employer could be appointed as a Nominee in a group insurance policy.

Creditor Proof
Life insurance proceed (sum assured) paid on the policy is creditor proof. This means that no creditor will have access to the proceed (sum assured) of the life insurance policy.

Type of Policy
Most life insurance policy offering typical death and disability is suitable to meet a Bankrupt need. However, living benefits is extremely important to a Bankrupt's needs where instant cash is crucial. Living benefits under life insurance extended plans that are typically offered as supplementary contract to the basic life insurance plan. For example:-
1: Accidental Protection
2: Disability Income
3: Medical Insurance
4: Crisis Cover or Critical Illnesses

Who Is Tim Cook

Apple Inc Chief Executive Tim Cook is joining the roster of the very rich who are giving away their wealth. Fortune magazine cited the head of the world's largest technology corporation as saying he planned to donate his estimated US$785 million (RM2.88 billion) fortune to charity – after paying for his 10-year-old nephew's college education.

The 54-year-old CEO's revelation in Fortune's lengthy profile of him is an example of the increasingly public philanthropy of the world's richest people. Billionaire financier Warren Buffett is encouraging the very wealthy to give away at least half their worth in their lifetimes through the Giving Pledge," whose website lists such luminaries as Microsoft Corp's Bill Gates, Mark Zuckerberg of Facebook Inc and Oracle Corp's Larry Ellison.

Leadership - Core Issue

There are so many aspects to effectively leading others. Have you ever felt overwhelmed just thinking about where to begin?

For instance, we know that we need good business acumen, but we also need to have the emotional intelligence that allows us to effectively serve and care for team members. We also need to be competent, and we need to be able to inspire others with a positive vision of the future.
What's the most important of these? How should we prioritize our time and energy?

What if there was a single skill that helped us improve every aspect of being leader -- a meta-skill that influenced all the others?

Wouldn't that be the most important skill to develop?

There is such a skill. It is self-awareness.

This is the most crucial skill there is for leadership (and for life in general) and I believe that the vast majority of people have likely reached less than five percent of their potential for self-awareness ability.

Why Self-Awareness Is So Crucial
Self-awareness affects every aspect of leadership in some way, but for the sake of space here we'll focus on emotional intelligence, business acumen, competency and vision.

Emotional Intelligence
According to Daniel Goleman, who literally wrote the book on emotional intelligence (EQ), self-awareness is the core competency of EQ. Self-awareness is most strongly associated with self-regulation and empathy, which are both crucial for driving positive emotions in those around us, but it is linked to every other EQ competency as well.

Business Acumen
Self-awareness and self-regulation are also crucial for making good business decisions. The more resilient we are in stressful situations, the better our decisions will be under pressure. Self-awareness also helps us to see more clearly when we are making decisions out of habit and be more willing to move out of our comfort zone. Self-regulation helps us to stay out of our comfort zone when we realize that that's what we need to do in order to achieve optimal results.

Competency at Technical Skills
Although not nearly as important as EQ for effective leadership, competency at our job skills is certainly necessary to obtain and keep a leadership role. Self-awareness allows us to better see our strengths and weaknesses as a leader, including with regards to job skills, which allows us to appropriately leverage our strengths and compensate for our weaknesses. Self-awareness also helps us remain free from distracting patterns of thoughts and emotions, which speeds up our ability to learn new things.

Vision
Self-awareness helps us to create better visions for the future by allowing us to have a more objective, realistic view of the current situation, which is key for charting a course for the future. Self-awareness and self-regulation also allow us to spend more time in a positive emotional state, which is essential for creating an optimistic vision of the future.

We Have a Long Way to Go
Of the thousands of business people I have presented training for over the last couple years, only a handful have stated that they intentionally train their awareness on a daily basis.

Do this sound familiar to you? How many people do you know who intentionally train their awareness each and every day?

As a result of not taking time to train, most people have reported to me that they are generally self-aware quite randomly, and can only sustain self-awareness for 10-15 seconds (even under very favorable conditions) before they are pulled back into being their thinking.

I estimate that most of us spend the vast majority of our time, probably 95 percent or more, being that voice in our heads, being our thinking, being our conditioned habits, and only five percent of our time being the awareness that can observe and/or listen to those things. We are fully self-aware only about give percent of the time.

Fortunately, it doesn't have to be that way. Self-awareness is a highly trainable skill.

Training for Self-Awareness
Daily mindfulness training can help us gradually reverse that trend. With consistent practice we discover that we are able to intentionally become self-aware at will, and sustain self-awareness for longer periods of time in increasingly difficult situations.

The relationship between mindfulness training and developing self-awareness is now widely understood. This relationship is the foundation of the highly-acclaimed Search Inside Yourself (SIY) program created at Google, which applies mindfulness training to develop self-awareness and other emotional intelligence competencies.

The SIY program leans heavily on scientific research that support the link between mindfulness training and increased self-awareness, such as research conducted by Sara Lazar at Harvard University in 2005, which suggests that mindfulness training results in thickening of the areas of the brain associated with self-awareness. Just as we can develop stronger legs from doing squats at the gym, we can develop a stronger "self-awareness muscle" by practicing mindfulness regularly.

Research from neuroscientist Richard Davidson of the University of Wisconsin suggests that mindfulness training allows us to develop extremely refined levels of self-awareness, such as being able to accurately report something as subtle as our clarity of perception. As he discusses beginning at time 46:30 of this talk given at Google, long-time practitioners of mindfulness are able to report their own clarity of perception with very high accuracy, whereas people with no mindfulness training are unable to report their clarity of perception with any accuracy at all.

If you'd to begin integrating some mindfulness training into your daily life, here's a simple, free quick-start guide to easily begin practicing without adding anything to your schedule.

New Idea - Living Benefits

Throughout the years, the vast majority of life insurance policies have been purchased for their death benefit coverage. But today, more carriers are offering the ability for insureds to access a portion of the face amount — in some cases, up to 90 percent or more — while still alive, provided that they meet certain qualifications. This can be accomplished through living benefits.

Living benefits are also referred to as accelerated death benefits. Having these benefits will essentially "accelerate" a portion of the death benefit on the policy so that the funds can be used prior to the insured's passing. These benefits can be added as a rider to a life insurance policy at the time that it is purchased, or alternatively, it can be added at a later time.  

Accessing Living benefits Fund
Living benefit funds can be received either as one single lump sum, or they can be taken by the insured in regular installments. While the insured must qualify based on a health or medical condition to receive the cash, the money doesn't have to be spent on medical bills.

So, if the individual wants to pay off their insurance deductible or the cost of their medical procedures, they can do so. But if they would rather use the funds to take a vacation, they can do that, too.

The amount of the cash that is accessed will be applied against the policy's death benefit. It is thus important to consider how much survivors will need at the insured's death and whether decreasing the amount of the death benefit will create a potential hardship for beneficiaries.

The money received by the insured is typically not subject to federal income tax, provided that the distribution meets certain criteria. This criteria includes the insured being classified as terminally ill when filing an income tax return.

Also, living benefits from life insurance policies aren't subject to state income tax in most U.S. states. (There may still be some instances where taxes are due, though, so it is always best to check with a tax advisor in this situation).

Policy holders need to keep in mind that even though the death benefit will be reduced when they receive living benefit funds, they will still be responsible for paying the policy's premium, as this will keep the remainder of the policy in force.

Types of living benefits available
Several types of living benefits are available, each typically requiring different qualification criteria from the insured to pay out. Such benefits can include:

• Critical illness: The critical illness benefit will pay a lump sum benefit if the insured is diagnosed with a critical condition such as a stroke, heart attack, or cancer. Other conditions may also qualify, such as kidney failure, Lou Gehrig's disease (ALS), or blindness due to diabetes.
  
  
  
• Chronic illness: The chronic illness benefit pays out a monthly benefit if the insured is diagnosed as being chronically ill and they are unable to perform two activities of daily living. These activities may include bathing, eating, dressing, transferring, continence, or toileting. Typically, the policy must be in force for a certain length of time before this benefit will pay out.
  
   
• Terminal illness: The terminal illness benefit will pay the insured a percentage of the death benefit if he or she is diagnosed with a terminal illness that results in the individual having a life expectancy of 12 months or less (in some states this is 24 months or less). Funds may be used in any way that the insured sees fit.

Advantages and considerations
There are a number of reasons why offering life insurance policies with living benefits could be attractive to consumers. First, many Americans today live with little savings. Even those who do have a sizeable nest egg will likely have those dollars earmarked for things other than paying for critical illness or long-term care.

Next is the issue of long-term care itself. Today's long-term care insurance policies have become extremely costly. The few carriers left in that marketplace have seen some fairly substantial rate increases over the past couple of years.

So, even though living benefits shouldn't be considered a replacement for long-term care insurance, they can provide a good source of cash for someone who doesn't have this coverage, which can in turn help to protect their other financial resources.

For those who are able to access living benefits for a critical illness situation, these funds can be a godsend. Bankruptcies resulting from unpaid medical bills can affect millions of people every year — even those who have health insurance or Medicare.

Policies that carry 4- or 5-figure annual out-of-pocket deductibles can easily be reached when someone is struck with an unexpected ailment like a stroke, heart attack, or cancer. So the funds from a life insurance policy could be a good solution.

That being said, it is also important to ensure that removing a certain percentage of the death benefit will not create a financial burden on survivors after the insured passes away. For example, it is important to be sure that the original intent for the life insurance is still being covered.

Allianz Malaysia Updates

Allianz Malaysia Bhd, one of the largest listed insurance players in the country, sees 2015 as a very challenging year for the company and the industry per se as it grapples with the economic uncertainties further compounded by the fall in oil prices.

Its newly appointed country manager and CEO Zakri Mohd Khir (pix) said that the low interest rate environment coupled with the sluggish economic growth will dampen investment returns, a key source of income for insurers. It is going to be a very challenging year with the economic ambivalence. The drop in oil price will lead to a lot of challenges domestically. Zakri noted that as large investors, insurers are all impacted by interest rates.

He said life insurers are more impacted than non-life insurers, with savings business being the most affected. He noted that the savings element in the life insurance "is virtually gone" because of the low interest rates. Basically, that bus has gone … the whole savings element is gone," he added. As a result, he said, all life insurers have decided to move away from products with a pure investment and toward pure protection products.

Currently, about 51% of Allianz Malaysia's life gross written premiums are from savings products, and the balance 40% from protection and health.

This year, the life insurance business will face challenges for growth," he said. He pointed out that with the frail economy and rising costs, in addition to the upcoming Goods and Services Tax (GST), consumers may not have deep pockets to spend on insurance.

"The question is how much money is an individual willing to spend to protect himself?," he asked.
"I think people are going to be very cautious (with their spending). And therefore, insurance is going to be way down the agenda," Zakri said.

Interest rates have the largest impact on long-term business where investment income is a major source of earnings for insurers. In non-life insurance, however, the interest-rate risk can be contained through prudent asset-liability management.

On the life insurance side, savings products are the most exposed to interest-rate risk because investment income is the main source of profit. Long-term interest rates serve as the valuation basis to determine premiums, policy reserves, guaranteed rates of return and profit-sharing.

All life insurance companies buy investments like bonds, sukuk and mortgages, and then repackage the benefits into their products. Ultimately, these products must reflect the yields of the underlying investments. As a result, interest rates have a direct and indirect impact on life insurance companies, their new product offerings, and existing policies.

The benchmark interest rate in Malaysia now stands at 3.25%. It averaged 2.94% from 2004 until 2014, reaching an all time high of 3.50% in April of 2006 and a record low of 2% in February of 2009.

The yields on Malaysia Government 10 year bonds increased to 3.85% in February from 3.80% in January of 2015. It averaged 4.05% from 2001 until 2015, reaching an all time high of 5.35% in April of 2004 and a record low of 2.87% in January of 2009.

On another note, Zakri said in 2014 Allianz Malaysia's life insurance business did well whereas the general side grew within expectations. Allianz Life Insurance Malaysia (ALIM) is the fifth-largest player in the life insurance market with a market share of 7.2% as at September 2014. Allianz General Insurance Company (Malaysia) Bhd, the general insurance subsidy of the group continues to lead the way as the leading conventional general insurer in the country with a market share of about 12.4%.

Despite a challenging environment ahead, Zakri expects the company's strategies to sustain its above-industry growth. In the 12 months of 2014, the group recorded a total insurance premium revenue of RM3.25 billion compared to RM2.85 billion in 2013. Net profit for the year increased by 24.4% to RM295.9 million from RM237.9 million in the previous year. The group's total assets grew by 13% at RM12.16 billion as compared to RM10.76 billion before.

On-line Insurance China

Small and medium-sized insurance firms currently dominate China’s growing online life insurance market, the Insurance Association of China revealed. Small and medium-sized insurers now account for 82% of total online life insurance sales in China. These insurance companies collected a total of Rmb29bn (USD4.68bn) online life premiums, or about 82% of the total Rmb35.3bn (USD5.7bn) online life insurance premiums.

The association said nine of the top 10 online life insurers in China are small and medium-sized insurance firms, led by Sun Life Everbright Life with a 16% share of the market and ICBC-AXA Life Insurance, which takes up 12% market share. Foreign-owned life insurers are also afforded more prominence in the Chinese market through online channels although their share of the total life insurance market in China is only around 5%.

Death Or Disability Insurance

Life insurance and disability insurance are both important for working families. But when you don’t have much money to spare, paying for policies like these can seem like a luxury. According to LIMRA, a marketing research organization, 70% of consumers say essential living expenses are keeping them from either buying life insurance or increasing the coverage they have.

And buying both life insurance and disability insurance? That might seem financially impossible.
But insurance is about protecting finances from disaster. Americans are more likely to have life insurance than disability coverage, yet the chances of needing disability insurance are higher. LIMRA says 44% of people have individual life insurance policies, compared with 29% who have disability coverage.

If you’re in your 20s, you have more than a 1-in-4 chance of becoming disabled before you retire, according to the Social Security Administration. By contrast, for a 25-year-old male, the probability of dying before age 65 is 1 in 6, according to Life Happens, a consumer education organization. For a 25-year-old woman, the chances of dying before 65 are 1 in 9.

Many people think disabilities are caused primarily by serious accidents, but that’s one of the biggest myths about disabilities, according to LIMRA. The top causes of disability are actually chronic conditions such as back problems and muscle pain.

And life insurance won’t pay for any disability costs. To protect your income, consider having disability insurance in addition to life insurance.

Life insurance vs. disability insurance benefits

Life insurance and disability insurance cover very different things. Life insurance won’t pay out for disability, and vice versa.

Life insurance pays your beneficiaries if you die. In some cases, policyholders can access life insurance benefits early, known as “living benefits.” However, eligibility for living benefits (previously known as “accelerated death benefits”) is generally restricted to those with a terminal illness.

Policyholders with permanent life insurance can take loans from their policy’s cash value to pay for expenses. But this isn’t necessarily something to rely on. It can take many years for a policy to build up enough cash value to be useful. And if the underlying investments in your policy don’t perform well, you may not have much to borrow. Finally, if a loan isn’t repaid, the benefits paid to your family after you die would be reduced.

Disability insurance pays part of your salary (often 60%) during periods in which you’re too sick or injured to work. Most policies require a certain time period of disability before they kick in, and cover a specific benefit period. There are both short-term (whose benefits generally expire after two years or less) and long-term disability policies.

There are potentially other payments related to disability, but you shouldn’t count on them. Workers’ compensation, for example, applies only if you’re injured at work, and Social Security disability benefits have strict eligibility requirements and average only $1,165 a month.

Reducing costs for both types of coverage

A 20-year, $500,000 term life insurance policy could cost a healthy 35-year-old woman around $20 a month, according to Trusted Choice, an organization that represents independent agents.

If you’re shopping for life insurance and looking to reduce costs, you can reduce your term life coverage amount and/or term length. Shopping around also pays off, as prices from different life insurance companies can vary by hundreds and even thousands of dollars for the same coverage.

Maxing out any group life insurance available through work is also generally a cost-effective way to buy life insurance.

While disability insurance through work is often free to employees, an individual long-term disability policy will cost about 1.5% to 3% of your gross income, according to the National Association of Health Underwriters.

There are also ways to reduce disability premiums. Opting for a longer period before benefits kick in, or a shorter benefit period, will lower premiums.

Life Insurance Indonesia Updates

The life insurance industry expects to book at least 20 percent growth in total revenue this year despite macro economic challenges including the rupiah’s depreciation.The target is lower than last year’s growth of 33 percent to Rp 167.76 trillion (US$12.85 billion) from Rp 125.82 trillion in 2013, according to the Indonesian Life Insurance Association (AAJI) report.

“We are optimistic about our target because the life insurance industry remains solid despite the rupiah depreciation and a slow economy. An average growth between 20 percent and 30 percent is good enough for us,” AAJI chairman Hendrisman Rahim said on Thursday.

He added that the life insurance industry had been majorly affected by the weakening of the rupiah against the US dollar and predicted that the rupiah would strengthen in the first half of this year.According to the AAJI’s latest assessment, Hendrisman said, the domestic life insurance industry would suffer only if the rupiah fell to 16,000-17,000 per US dollar.

“We have conducted a stress-test simulation that shows that a rupiah between 16,000 and 17,000 per US dollar would start to affect our liability ratio,” Hendrisman said.In addition, Hendrisman said, the Financial Services Authority (OJK) planned to merge state-owned reinsurer PT Reasuransi Internasional Indonesia (Reindo) with PT ASEI Reasuransi Indonesia to create Indonesia Re, a local and more powerful reinsurance company, as part of its efforts to retain dollars in the domestic market.

Given Indonesia’s relatively small reinsurance business, the domestic insurance industry, especially general insurance, routinely pays out large sums of dollars for overseas reinsurance.“The reinsurance merger plan will help Indonesia reduce forex outflows and the current-account deficit.

Usually, Indonesian insurance companies pay for reinsurance in the fifth month or May, so we can expect to see a boost to the rupiah soon,” Hendrisman said.Indonesia’s current-account deficit narrowed to 2.95 percent of gross domestic product (GDP) last year from 3.18 percent the previous year. Previously, the size of Indonesia’s current-account deficit has reached 4 percent of GDP, which has worried investors and put pressure on the rupiah.

The rupiah, along with other emerging-market currencies, has been under selling pressure because of increased demand for dollars amid better conditions in the world’s largest economy, with US central bank the Federal Reserve expected to raise interest rates mid-year.

The rupiah was trading at 13,008 per dollar on Thursday, strengthened from 13,164 per dollar a day earlier, according to the Jakarta Interbank Spot Dollar Rate (JISDOR).Meanwhile, the World Bank has forecast that Indonesia’s economy will grow by only 5.2 percent in 2015, lower than President Joko “Jokowi” Widodo’s target of 5.7 percent.Despite economic slowdown, Indonesia’s life insurance industry still managed to post a skyrocketing 458.2 percent growth in investment returns to Rp 40.84 trillion last year, from Rp 7.32 trillion.Hendrisman said the huge jump was prompted by the industry’s strategy to buy stocks when Indonesia’s stock market slumped in 2013, reaping the results when it rebounded in 2014.

“We are expecting investment returns to grow between 20 and 30 percent further this year, especially on the back of stocks and mutual funds,” he explained. - See more at: http://www.thejakartapost.com/news/2015/03/20/life-insurance-eyes-stable-growth.html#sthash.eKrZuKg1.dpuf

Do You Need Life Insurance

If you are like many other people, you'll spend plenty of time worrying about whether you are saving enough for retirement and give relatively little thought to the issue of life insurance.

Life insurance often gets short shrift, partly because many people come at it with preconceived ideas, and that, according to advisors, results in some fairly common mistakes. Very often, people buy life insurance right after they get married or have their first child and don't give it another thought until their policies are set to expire.

One of the most common mistakes people make with regard to life insurance is assuming that their lives aren't going to change, and so they plan for a short time horizon on the insurance front. By midlife, many people are in the throes of raising children and paying off mortgages and may want higher levels of coverage but have difficulty getting it. Sometimes as we get older, we lose our insurability because we are no longer as healthy or we can only get the coverage we want at an exorbitant price.

The first issue to consider when it comes to life insurance is whether you need it at all. The answer to that question hinges in large part on whether your death would create a financial hardship for a surviving spouse and any children in terms of lost income.

If someone else depends on your stream of income, then it makes sense to consider life insurance.
One of the biggest mistakes some married couples make is insuring one partner, the primary breadwinner, and not the spouse who has stepped back from his or her career to take care of children. That can be a costly mistake if the stay-at-home parent dies, advisors say. Among other issues, the surviving parent may face much higher child-care expenses.

How To

So you've decided to buy life insurance. What now? The next step, advisors say, is to determine how much of a death benefit you really need. The death benefit is the amount that an insurer pays out to the designated beneficiaries of a policy if the owner of the policy dies.

Some advisors undertake an exhaustive needs-based analysis that takes a number of factors into account, such as how much it would take to pay off mortgages, send kids to college and replace lost income.

Those in the market for life insurance should also consider how long they'll need coverage, which will help them determine what type of policy to buy. Life insurance comes in two forms, term or permanent, although some policies are a combination of the two.

Term insurance provides coverage for a specific period of time, and the premiums are typically fixed during that period. Many experts say term insurance is the right choice for most people because you buy coverage for only as long as you need it, although that involves some guesswork.

"Change in health status is one of the more common reasons why someone would come to us and say, 'I think I need to change my short-term coverage to long-term coverage. We are going to look at what they have right now in terms of life insurance and what options their policies offers them in terms of conversion" to different types of policies or longer-term policies.

Permanent insurance includes universal and whole life. As the name implies, permanent insurance provides lifetime coverage. Often such policies build a cash value that their owners can access before death through loans or withdraws, much like tapping the equity in your home.

Not surprisingly, permanent insurance will typically end up costing you more than term insurance. It can also be complex and thus confusing to many consumers. What's more, some critics of permanent insurance argue that even policies that accumulate a cash value may represent mediocre long-term investments as compared to other options, such as mutual funds.   

Lee Kuan Yew - The Greatest

Passed away March 23, 2015

Lee Kuan Yew became Singapore's first prime minister in 1959 and held onto power for over three decades, overseeing the island's transformation from a port city battling crime and poverty into one of Asia's most prosperous nations.

Kuan Yew, a British-educated lawyer, is widely credited with building Singapore into one of the world's wealthiest nations on a per capita basis with a strong, pervasive role for the state and little patience for dissent.

Kuan Yew co-founded the People's Action Party (PAP), which has ruled Singapore since 1959 and led the newly born country when it was separated from Malaysia in 1965.

“I ignore polling as a method of government. I think that shows a certain weakness of mind - an inability to chart a course whichever way the wind blows, whichever way the media encourages the people to go, you follow. If you can't force or are unwilling to force your people to follow you, with or without threats, you are not a leader.” – Lee Kuan Yew.

Medical Premium Up Up Up

An insurance company has sent a letter to inform me of the 30% increment in the medical insurance that I have bought for more than 10 years. This will mean a RM350 increase bringing the total to RM2,000+. On top of that I have to pay GST of 6% which will amount to RM120+.

I am a retiree and I am not a civil servant. I am neither poor nor rich. I am not entitled to aid for the poor except for BR1M of RM350 this year and I am not surrounded by maids or live a life of luxury. I have contributed to the Malaysian economy and to the Inland Revenue Board. Today, I have to rely on my hard earned savings which is diminishing before my eyes. I will have to pay a lot more for my other insurances and necessary consumption. Who can I turn to?

It is very distressing to note that healthcare and a lot of medications are not GST zero rated. Those drugs that are GST exempted are few as many are replicated from the same molecule. Aging is bad enough and to fork out more money for necessary medication is terrible. Please exempt healthcare medicine from GST.

The prime minister said that healthcare in Malaysia is one of the cheapest in the world. Our income is also one of the lowest in the world. EPF had recently announced that 80% of contributors who retire today have savings below the poverty line. The ringgit weakness and the cost of living are a concern for most Malaysians.

It is sad and painful to hear of billions of ringgit lost in government projects and wastages when the rakyat have to pay more taxes. I see this as the tip of the iceberg as our quality of life declines further. Is there a solution?

Letter from a Retiree

Life Insurance 2014 Updated

 
Malaysia’s life insurance industry recorded a 6.9% growth in insurance protection to RM1.17 trillion for all policies combined in 2014, its industry body said on Friday. The Life Insurance Association of Malaysia (LIAM) said the amount was 6.9% higher than the RM1.09 trillion in 2013.

 

Sum Assured

“The sum assured per capita in 2014 has also recorded an increase to RM38,449 from RM36,387 in 2013,” it said. LIAM president Vincent Kwo said the healthy performance of the life insurance industry reflected the people’s rising awareness on the importance of insurance protection. 

 

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 when compared with year 2013. Kwo said the increase in the number of lives covered by life insurance and higher sum assured protection reflected a higher level of financial literacy among Malaysians. 

Protection Gap

However, based on the Protection Gap Study undertaken by University Kebangsaan Malaysia and LIAM in 2013, there is still a huge protection gap for families with life insurance. 

 

“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,” said Kwo. 

Penetration Rate

He added 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. 

“Additionally, insurers could also leverage on their existing customer base for upselling or cross-selling initiatives given that even among those who have insurance coverage, in most cases they were not adequate,” he added. 

Growth

Based on preliminary figures, 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. 

As for group insurance business, it recorded a 5.1% growth. 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.

Claims

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.

EPF Updated 2015

Nearly 80% of workers who will turn 55 this year will not have enough savings in their Employees Provident Fund (EPF) to live above the poverty line, according to figures released by the fund’s chief executive officer.

Datuk Shahril Ridza Ridzuan said for the next 20 years, the workers would not have enough in total EPF savings to enable them to live on RM800 a month, which is close to Malaysia’s average poverty line income of RM830. This is because most of them had low wages when they started contributing to the fund in 1980s, and continued earning relatively low salaries till they turned 55, said Shahril, who did not provide a number for this batch of retirees.

The revelation shines the spotlight on the problem of low incomes among a majority of Malaysian workers, even as Putrajaya said it aims to make Malaysia a high income nation in five years’ time. According to Shahril, more than 75% of its 14 million EPF contributors earn less than RM2,000 a month.

About 15% earn between RM2,000 and RM5,000 a month, while those earning more than RM5,000 are in the top 10%. The EPF has set RM196,800 as a savings threshold that would allow a contributor to spend at least RM800 a month for the next 20 years. The threshold is revised every three years to take into account inflation.

Only about 20% of its contributors who turn 55 this year are expected to have RM196,800 in total savings. That percentage is likely to stay about the same in the coming years, said Shahril.

“Historically, we have a low wage environment, so that percentage has inched up only a little. “This is why we tell contributors not to take out their savings till they are 60, when they really retire. “That extra five years can earn them an extra 40% through compound interest,” Shahril said when met after a talk organised by the Chevening Alumni Association in Kuala Lumpur last night.

These figures, he said, reflect the new reality of working life in Malaysia, as people will have to work beyond 55 in order to save enough to live out the rest of their lives. “This is the trend in developed countries and we are getting there. The reality is that you cannot retire and enjoy yourself at 55 any longer.”

 That age was set in the 1950s and has not been changed to take into account longer life expectancies, he said, adding that these days, people expect to live through their 70s. This trend is compounded by the fact that Malaysia is a rapidly ageing nation. In 2030, 17% of the population will be aged above 65, he said.

In 2040, people aged 65 will outnumber younger individuals. “So we need policies to deal with this, such as financial literacy training so that young people are aware of the need to save for retirement and how to integrate old workers into the market.

 “These are issues that advanced economies have to deal with and we are getting there,” said Shahril.

Health Insurance

In Malaysia - health insurance is not that big a deal, especially when it comes to women. You either have a cover from your job that pays a certain percentage of your expenses - maternity included - or you share a plan with your family members and not really look into too many details. And you really can't be blamed either.

Life insurance takes more importance over health any day and a glance through a regular 20-something woman's investment portfolio will show a huge chunk of her savings going into life insurance with health as only a secondary option. The reason? We pretty much think that we are never going to fall sick, ever!

It's surprising that we have this lackluster attitude towards health when we are probably the ones who need it the most. Just pause and reflect on your daily routine. You are a homemaker in the morning, probably getting your kid ready for school while cooking a meal for the family and also rushing to finishing off your daily commitments. The stress continues as you deal with a job, family, household chores and unexpected emergencies. Quality me-time, if any, comes in the form of toilet breaks. Phew! With so many parts to play, it's almost imperative for you to take care of your health. Here are five reasons your health needs a plan:

You can't predict your health: You may be healthy now, but tomorrow can be a different story. Even if you lead a healthy lifestyle, dealing with uncertain emergencies and stress are a part of our daily routine. Events such as accidents can affect you, regardless of your age, and the expenses will continue till the time you are cured completely. Make sure you have a fall back option to manage such unforeseen medical expenses and their impact.

The best laid plans can go awry: A critical illness can let your financial goals go for a toss. Uncovered medical expenses have to be paid off with funds earmarked for buying a new house or taking an international vacation. If you are the sole earning member in the family, you might find yourself in the middle of medical debt.

You need a wholesome cover: During a critical illness, you not just incur medical expenses but you might have to think of pending bills.  This is where your health insurance comes in. Life and Health insurance covers your expenses for the medical treatment and also gives you the liberty to use the compensation amount as per your own discretion. Also the premium that you pay towards your health insurance is eligible for tax deduction.

You might not have the money: As per a Forbes article, for every Ringgit you spend for medical treatment, RM0.70 goes in buying drugs. With the addition of good quality private hospitals, treatment charges have shot through the roof. The improvement in technology and services has pushed up the medical cost. With everything from medical costs to doctors' bills on the rise, it is better to have a separate health cover that deals with your expenses.

Lifestyle changes have an adverse effect: Over the last 10 years, there has been a marked change in the lifestyles and eating habits of people. Add to it long working hours, late night parties and smartphone addiction and we have a host of newer medical problems to deal with. It is advisable to have a good cover that takes care of all your medical bills while you recover from the illness, rather than worry about cash.

No Commission Life Insurance

Singapore - Consumers may be able to start buying basic life policies directly from insurance companies from as early as next month, bypassing financial advisers and saving on commission, the Monetary Authority of Singapore (MAS) said yesterday.

The much-anticipated move is aimed at giving consumers another avenue to buy insurance products and encourage more people to be insured. However, industry professionals told TODAY they do not expect the take-up rate to be high due to the limited coverage of the plans and the typically complex nature of insurance policies that many might have difficulty understanding.
            
“My guess is 10 to 20 per cent of people, which is not a big number, will buy directly from the insurance companies. The MAS has also imposed a maximum sum assured per person per insurer of S$400,000. If you want more, you will have to buy from another company, which can be cumbersome. I don’t think many people have the time and financial expertise to do everything on their own,” said Mr Christopher Tan, chief executive of financial advisory firm Providend.

The direct purchase initiative is a result of the Financial Advisory Industry Review (FAIR) introduced in 2012 to raise the standards of the insurance sector. Another initiative, a single information portal where consumers can look up and compare available life insurance products, will also be launched in April, the MAS said yesterday.

Last July, the MAS laid out the features of the term and whole life policies that consumers can buy directly from the companies.

It emphasised yesterday the direct purchase products will be “a new class of life insurance products for basic needs that is ‘retail-access friendly’.”

“It will be simpler as the features are broadly standardised. This allows a consumer to make straightforward product comparisons when deciding which (product) to purchase,” MAS deputy managing director Ong Chong Tee said yesterday. “Consumers who know what they want and do not need financial advice will be able to buy (the products) directly from life insurers. It will be cheaper as no commissions will be charged,” he added.

On concerns expressed by some financial advisers that their livelihoods might be affected by this initiative, Dr Khoo Kah Siang, president of Life Insurance Association Singapore, said this was unlikely.

“The products available through the direct channel are those with very simple proposition; there are safeguards to make sure people who purchase them really understand what they’re buying without advice,” Dr Khoo said. “But if you look at the range of insurance (products in the market), it’s very wide. They can also be very complex and because of the complexity, advisory is very important.”

In addition to providing advice, financial advisers also “follow up with clients if anything were to happen to them” — something that the direct purchase channel cannot provide, noted Mr Rave Peh, agency development manager at AXA Singapore.

Consumers concurred that the personal touch provided by advisers is hard to replace. “I would like to feel more secure, that there is someone I can trust, an individual to provide that connection to the insurance agency. I’m willing to pay commission to get that kind of service,” said Mr Steven Chung, head of events and programming at Sentosa Leisure Management.

Synergy Financial Advisers executive director Jeff Lee said the move could force the industry to improve. “If advisers don’t improve their skills and don’t add value, then they’re just out there to sell and will lose out. But if they improve their competency ... and give good advice to clients, I don’t think (the initiative) will put many out of jobs.” Lee Yen Nee, with Additional reporting by Angela Teng

Top Insurance Brand

Global leader in life insurance and investments, AXA, was recently named ‘Number One in insurance’ by Interbrand for the sixth consecutive year. According to Interbrand, the brand strategy and design consultancy whose “Best Global Brands” ranking has become an industry benchmark, AXA moved up six slots to 53^rd place, with a brand worth of $8.120 billion.

Some key achievements in 2014 such as expansion in new territories, investment in technology labs and start-ups, partnerships with leading technology companies and universities, and various CSR activities have been particularly highlighted by Interbrand to reflect AXA’s leadership in the insurance industry and its brand strengths.

According to Interbrand, “AXA is adapting intelligently to a changing world, strengthening its connection in both the enterprise and consumer spaces.”Interbrand has also assessed AXA as the Best Green Brand in the insurance industry worldwide; particularly underscoring its role in addressing climate change through improving the understanding of the environmental risks, as well as the reduction of AXA’s environmental footprint.

“We are all very proud to be the leading insurance brand for the 6th year in a row, one of the world’s 100 best brands across all industries. “AXA” is a strategic asset to attract and retain customers, partners and talents worldwide. The strength of our brand is instrumental to our expansion in higher growth markets and a competitive advantage in the digitization of our business,” said Véronique Weill, Chief Operating Officer of the AXA Group, whose headquarters are in Paris, France.

AXA is a global leader in insurance serving 102 million customers in 56 countries. In 2013, AXA released US$ 15 billion in benefits to its policyholders. AXA is also ranked as the 16^th largest corporation according to the 2014 Fortune Global 500 list and 33^rd by Forbes Global 2000.

Imortal Need No Life Insurance

Abhilesh Ranjan, 32, a successful businessman based in one of the fastest growing city in India, Gurgaon suddenly got worried about his family’s financial security. He is blessed with two children and both are studying in well-reputed schools. His parents get a decent level of retirement income from real estate and thus only his immediate family i.e. his wife and two kids are dependent on him.

So, what is keeping him awake at night? Actually, he recently came across an unfortunate incident wherein one of his friends Rajneesh Jain lost life in a car accident. Rajneesh and Abhilesh had similar profiles. The mishap was a massive setback for his family. Rajneesh was running a flourishing business and had a happy family with two kids, both studying in a good school.

It was just 5-6 weeks after Rajneesh’s demise, his family started bearing the brunt of financial crunch. Naturally, Abhilesh was feeling bad. Had Rajneesh been covered under a life insurance plan, things could be very different. Nothing can compensate the loss of a loved one, but life has to go on. No one wants his family to get into financial troubles and live a miserable life, even in his absence.

That explains the significance of life insurance cover.

Just look around. You will find several such stories. Of course, you cannot change the past or predict future. But you can always fulfil your responsibility towards your family by taking care of certain elements. Covering unforeseen risks is an imperative and there is no reason why you should not have sufficient levels of life insurance coverage.

Why do you need life insurance?
You need life insurance not for one reason but many. Life insurance not just provides you guarantee but it also lets you live with ease. Given that your life is exposed to various risks you need life insurance to:

• Fulfil your family’s financial requirements:
Sustenance is impossible without an intact cash resource. Your family is dependent on your income more than you are. You need to keep their present as well as future financial requirements in the view. Your family members need to carry on with their lives even when you are not with them.

Without you their financial sources will cease. So it is your responsibility to arrange for an alternative source of income for them or anything that can make them move on.

• Repay debt:
Loans and debts are an inseparable part of financial planning for most of the people. It gives you an additional source of funds. There is no harm in taking loans. However, you should also be able to pay it back what so ever is the case. If you have taken a loan you should definitely have a life insurance policy also. Having an appropriate life insurance plan will save your family to take the burden of repayment of loan in case you are no more. Calculate how much debt you need to clear and add it to the sum insured of your life insurance policy.

• Get emergency funds:
A life insurance policy can let you avail loan against the amount you have paid as premium. So it is not just for your family but also to fulfil your own needs.

• Avail other benefits
There are many riders available with a life insurance policy. These riders help you to extend the benefits you get from your life insurance plan. Besides death benefit, you can get many more benefits which add value to your plan. Disability benefit, accidental death benefit and dismemberment benefit, critical illness benefit, waiver of premium, accelerated death benefit and the list goes on. The rider you choose is subject to the kind of life insurance plan you choose.

How much does it cost?
Many cannot afford to pay life insurance premium. More cannot afford not to be insured!! If you can afford to pay life insurance - you probably have no need for life Insurance