The Pros and Cons of Buying Insurance 

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As soon as you enter the workforce, you should have your own medical and life insurance. The reason for this is that you need more monetary coverage for all of your financial commitments, such as your student loan, car loan, rent or mortgage loan, home bills, helping your parents, and supporting your family if you’re married. 

After paying off all your obligations, you won’t have much money left over to pay for life and medical insurance policies, especially if you’ve just started working or earn a middle-class income. This is where a term life insurance policy comes in handy, as it is the most affordable way to obtain basic life insurance coverage in the event of an untimely death. Is it, however, appropriate for you and your financial situation? I’ll explain what term life insurance is and its benefits and drawbacks so you can make an informed decision. You can also find out more here if you are looking for investment-linked insurance policy Malaysia.

So, what is term life insurance? Term life insurance is sometimes referred to as the most affordable and straightforward life insurance product, and it is specifically designed for those seeking temporary coverage over specific financial commitments, whether it’s a debt, a loan, or as a final means of supporting a family after passing into the void. A term life insurance policy, in a nutshell, provides death and total permanent disability (TPD) coverages from natural and accidental causes for a set period of time (a term) with no additional cash or investment values.

Pros of Buying Insurance

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  1. Low monthly or annual premiums
  • Term life insurance is widely regarded as the most affordable type of life insurance. Depending on your coverage amount, you can now get term life insurance for less than RM20 per month, that’s only a few hundred Ringgit per year! Of course, these are affected by other factors such as your age and lifestyle habits, but the fact remains that term life insurance is a cost-effective option for Malaysians. Higher coverage amounts will cost you more in premiums, but the peace of mind you get knowing there is a safety net if you are no longer around to provide for those you care about is worth it.
  1. Less hassling application process
  • Term life insurance policies are generally simple to obtain. Most insurance providers sell it online, where you can buy it after answering a series of personal and medical-related questions (honesty is essential here; you don’t want to end up with a revoked policy due to inconsistencies in personal information). Furthermore, most term insurance policies do not even require a medical exam – you certainly get maximum convenience here.

Cons of Buying Insurance

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  1. Less comprehensive coverage
  • When compared to whole life insurance, term life insurance provides a slightly less comprehensive level of protection. To begin, you may be unsure whether the term you have chosen is adequate. It’s difficult to predict the future, especially when it’s 15 to 30 years away. Of course, you can always renew your coverage when the term expires, but premiums may have risen by then, and you may face complications if you have been diagnosed with any health issues along the way.