You spot on.
I did not buy those elements that are good, that I WANT. I only buy what I NEED.
They are many benefits that I want from an life insurance product. I want my family to have a wind fall from my life insurance like hitting a lottery upon my death and not just an amount they could get by sufficiently without me. Should I have some critical illness at the age of 65, I want to claim RM500,000 from my life insurance coverage (not my cash value or investment in the life insurance). This is despite the fact that I would have earned less from my labour work if I am healthy. My financial position is actually better off upon this unfavorable event. You see, these are insurance WANTS. You pay a small sum and hope for windfall upon unfavorable events. You are not just covering possible actual loss of income but hoping for more money which you would not have earned if you are healthy. You are not just covering your risks, you are betting for odds.
To have level coverage through out the term of the life insurance, knowing that I will cumulate financial assets, is a WANT.
To put in more money in investment-linked that gives me unit trust return, no point. I am investing properly outside an life insurance product. To me, investment-linked insurance is a WANT.
But crisis coverage for critical illness is a NEED to me. I am forced to take the terms laid by insurance company. I am forced to paid a higher premium for level coverage, instead of reducing coverage, in order for me to buy critical illness.
The key idea is that, just don't buy what you don't need and you will make the hefty savings.
Pause and think. Taking out investment element and level coverage, insurance premium now seems extremely cheap. Why RM50,000 coverage only? It is hardly enough as a protection if you have dependents. By cutting down the unnecessary element in a life insurance product, you are now afford to ensure sufficient coverage.
Part 1: Reduce your life insurance premium
Part 2: Reduce your life insurance premium (2)
Part 3: Reduce your life insurance premium (3)
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Read what the expert says about life insurance, Term or Whole Life?