There are five common types of life insurance in Malaysia: endowment, term, investment-linked, life annuity, and whole life. If you are planning to buy your life insurance and cannot decide which among these types is the right one for you, take a look at their differences below:
An endowment life insurance works like a regular savings plan but pays you a lump sum after a particular term. You will not easily access your money until the term ends. The growth of your money will depend on your fund’s performance.
Term Life Insurance
It has the lowest possible premium among all types of life insurance. If you died during the policy, your beneficiary would receive death benefits. Aside from the minimum sum, it usually includes critical illness coverage and accidental death benefit.
As the name suggests, this life insurance combines protection and investment. This is ideal if you want to vary the price of premium payments based on your financial capacity. It allows you to choose between single and regular premium plan.
This is the most recommended plan for people in their senior years. You can choose to have either a single payment annuity or flexible payment annuity. In the former, the life insurance product will be sold to you in exchange for the immediate payment of a lump sum while in the latter you can have it in a series of regular payments.
This is the most common type of life insurance. In here, the life insurance company will credit you based on the performance of an investment portfolio.
In conclusion, all these types of insurance require a long-term commitment. We all need insurance because life is full of uncertainties. You never know when an emergency or death may happen.
On the positive side, you may use it to secure your future. You can use it to buy your dream house, for starting a new business, or for your children’s education. Tuition fees increase every year. Be financially secure and talk to a financial advisor now!