Okay, let’s talk about those with NO life insurance. Almost 1/2 of the respondents are married with kids!
And the highlight for this finding is that 47% of those respondents who don’t have life insurance are married with kids! Say what? This is kinda mind-boggling. We also found that at least half of them have a household income and savings less than RM5,000. These families will face great trouble, financially, if something unfortunate were to happen.
But, what are their reasons for not buying life insurance?
Well, 78% of respondents WITH NO LIFE INSURANCE claimed they CAN’T AFFORD life insurance.
We discovered that 78% of the respondents who feel they can’t afford life insurance (whether they have a lot of financial commitments or think that life insurance is expensive) have a monthly household income that is less than RM5,000 with little or ZERO savings.
More than half of these people ARE NOT sole breadwinners and they’re aged between 26 to 35. This could be that the cost of living is getting high with stagnant income growth or they’re not sure what to prioritise financially.
And, that’s not just it. Additionally, 27% of respondents WITHOUT INSURANCE felt their FAMILIES CAN SURVIVE for more than 12 months without their income.
Well, we don’t want to be judgmental… so we decided to dig deeper. We noticed that 37% of the respondents with NO life insurance who believe that their families can survive without them are the singles. And, most of them have no dependents. This made sense because no one is relying on their earning capacity.
Tapi kan, what about the ones who are married (with/no kids)? There are 56% of them out of the total number who made the claim. Out of that percentage, 1/3 of them are sole breadwinners and the rest are not. To add, more than half of the 56% have assets below RM500,000 and debts below RM300,000.
Now, moving on to the ones with life insurance… Apparently, having a child is ONE OF THE TOP reasons to purchase it.
Overall, we found that 51% of respondents with life insurance are married with kids (which explains the trigger). The rest are single (29%), married (17%), divorced (2%) and widowed (1%). Having said that, 62% of them ARE NOT a sole breadwinner.
And, we also found that 61% of respondents are HAPPY with their life insurance coverage. But, is it really enough?
After analysing the data, we found that both groups have a similar number of dependents (mostly around 1 to 3), monthly household income and savings which is below RM5,000. And, those who feel that their family is sufficiently covered by insurance have coverage of RM100,000 and above.
Based on this info, we believe that they shouldn’t feel happy about it. Because ideally, the amount of coverage should be based on the families’ liabilities and lifestyle, with inflation taken into consideration.
Which explains why 11% of those with life insurance, TAK CONFIDENT their family CAN SURVIVE without them.
Although more than 50% of the respondents (with life insurance) believed that their families can survive for more than 6 months without their income, 11% of respondents don’t feel the same. Why lah? To understand better, we look back into the data that we’ve gathered.
These respondents have 1 to 3 dependents and have life insurance coverage less than RM 200,000. To add, more than 50% of them are not sole breadwinners.
We also found that more than 70% of those who claimed “They can’t!” have savings less than RM15,000, while the rest have between RM15,001 to more than RM55,000. Not to mention, most of these people have debts less than RM300,000.
So, it’s understandable why they feel their life insurance coverage is not enough. The coverage should be able to cover your debts plus any interest, enough to replace your income and match your family’s lifestyle, as well as aspiration.
On top of that, 16% of the 11% respondents of those who said their family can’t survive have no savings at all - which is alarming. Basically, lack of coverage, savings and high debts could be the reasons why they’re not confident about their families’ survival.
So, when is the right time to get life insurance?
Newspaper cutting from Harian Metro
Evidently, there’s no ‘RIGHT’ time to purchase life insurance. Without this protection, your loved ones might be left in a financial lurch if you pass away unexpectedly. Or, what if you’re unable to work due to permanent disability? You’ll lose a source of income.
Okay lah, maybe you’re the ATAS people. You have enough assets and cash in the bank for the family to survive. But, did you know that wealth distribution to the next kin or family can be a bureaucratic and lengthy process?
So, if you’re the sole breadwinner of the family, do know that your family’s day-to-day spending could be severely impacted.
And, to those who are single with no dependents, completely debt-free, and never want a family, you should still consider a small life insurance policy. Because who’s going to pay your end-of-life and funeral expenses if the worst should happen? Think about it.
Are you thinking about getting one? May we suggest to you Prudential’s PRUWealth Plus?
It’s an investment-linked insurance plan that provides high protection up to age 100 and for entry as early as 30 days old. To add, it has a flexible premium based on your financial capability. Take a look at below illustration, for better understanding.
For more info about PRUWealth Plus, head over to Prudential’s page here or contact your Prudential agent. He/she will be able to provide advice based on your financial needs and goals.
Not to preach, but REMEMBER: We can’t always anticipate things that are going to happen, but we can have a plan in case something drastic and unexpected occurs.
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