How life insurance can help you and your loved ones

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One thing from MH370 we can all take to heart is how life insurance could have helped you and your loved ones.

Under an international treaty called the Montreal Convention, an airline must pay relatives of every deceased passenger a certain amount of money. In the case of MH370, CNN reported that the initial amount relatives of every deceased passenger must receive should be around RM484,875 to RM565,687 under the said treaty.

Some of the insurance companies, like China Life, are already handing out monetary compensation for the affected families.

Bereaved families

The Economic Society of Australia puts the estimated number of family members left behind, based on average size of Malaysian households, around 1,028.

With that many families affected, it is easy to understand why it is wiser not to solely rely on conventions, such as the Montreal treaty, for support and still set up protection mechanisms of our own – like securing personal insurance for ourselves – to protect those we love.

Term projections   

In Malaysia, there is an average life expectancy of 73.9 years.

You can make predictions for your own life expectancy and base your term on the average.

‘Term’ refers to the length of time you are covered by life insurance. If you pass away within the set term, your family will receive insurance.

Keeping one eye on the future is good, but be sure you are being realistic as well. Remember to set aside enough for those monthly insurance premiums.

The average monthly expenditure in Malaysian households is at RM1,953. Compute your monthly expenses like bills, groceries, allowances and so on and see if your expenditures fall over or under the average.

This should be a major deciding factor for you when you calculate how much your family is going to receive from your life insurance each month, when the time comes.

Make sure your insurance covers your dependents’ needs too.

For instance, the estimated cost of tuition for a business course in a private Malaysian university is around RM28,000 to RM36,850.

If you have young children and a house you are still paying for, you will want to include college education and mortgage payments into those projections.

The lesson of MH370

There were 239 people aboard the ill-fated flight MH370, counting passengers and crew members.

None of them could have predicted when or how they were going to be taken away from their loved ones.

The same uncertainty holds true for all of us.

There are, however, ways to protect the best interests of our family and safeguard their welfare even after we pass on.

And while measures may seem inadequate, may seem incapable of ever compensating for even a fraction of the loss, it will provide our families with support, and support, at that time, is honestly all of what they need.

 

This content is created by Floyd Sijmons for the readers of Borneo Post. Sijmons is the CEO of CompareHero, the most extensive Malaysian financial comparison platform today. He believes in the value of saving Malaysians time and money by giving them information they need to compare financial products in the market. For more, visit CompareHero.my.

ABOUT FLOYD

Floyd Sijmons gives you unbiased views on credit cards, loans, even on insurance and home services (like broadbands and telcos), along with other financial products in the Malaysian market. So go ahead and ask.