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Think Twice About Being Uninsured

BY Team Loanstreet

Updated 18 Nov 2019

Before you dismiss this as just another cliché lecture on the importance of buying life insurance, why wouldn’t you think insurance is important?


Of course, this question is directed at the many young, uninsured Malaysians, which, as revealed by the Life Insurance Association of Malaysia (LIAM), makes up a disturbingly high amount of the population. Another finding was that individuals below the age of 25 have particularly unfavourable coverage statistics, despite the much lower premiums in accordance with age. Let’s take a look at why insurance is so important, and is as mooted in personal finance all over the world.

What's covered in this article?

Why Uninsurance is Rampant

We are all curious to discover the reasons behind the low insurance coverage rates among Malaysians, therefore Loanstreet talked to several working young adults who fit the profile: underinsured or uninsured, aged from early to mid twenties. While such information cannot possibly constitute as proper research findings, there were some striking similarities among the answers.

The answers revolved around two main reasons: that insurance payment contributes to monthly financial commitments and it isn’t really necessary since their households already have breadwinners. After all, this demographic group graduated from tertiary education, probably paying off their vehicle loans and have lifestyles to maintain. Top that off with a salary not far from a fresh graduate’s, and therein lies the perfect reason for keeping financial commitments low.

Insurance Makes Sense

Unfortunately, we can’t escape being a little preachy here. While the majority of young adults may not be their families’ breadwinners, none can deny the fact that should anything happen, a substantial burden would fall on their loved ones nonetheless. It isn’t a very pleasant thought to visit, but the reality would be much worse without planning and preparation. Just to remind you all that, basic life insurance typically extends to cover Total and Permanent Disability (inability to work) and critical illnesses (eg cancer, heart attack and stroke).

To highlight the dangers of being uninsured, let’s visit a scenario: you get hit with Total and Permanent Disability, and are not able to work for an income. It goes without saying that your family members will be at the paying end for not only your medical fees, but also to take care of you at home. Additionally, any vehicle or property loan you’ve taken out now leaves you with only two choices, which is to sell or further burden your family. Bear in mind, this is discounting the lost future financial contribution towards your household.

Now, what would happen if you die? In another study conducted by LIAM, “the average protection gap for families whose primary wage earner do not have life insurance protection is RM723,000 per family. What this basically translates to is that for a family to sustain their current lifestyle and continue with their daily consumption, they would need a sum of around RM723,000 to last them for 5 years. Mid-twenties might not be the average age of a household breadwinner, but one should take into account when the actual breadwinner is retired and has to depend on pension or EPF savings. Strained household income coupled with welfare costs and our rising cost of living is definitely not healthy for a household.

Buy Directly

The third most common reason for being uninsured was that, well, insurance agents are commission driven and don’t really advise on one’s welfare. While that may be true, it’s hardly a reason for putting yourself at risk and ultimately losing out if and when disaster strikes. Fortunately, just earlier this year, insurance coverage can be purchased online directly, in accordance with guidelines on e-policies issued by Bank Negara Malaysia. This effectively cuts out the agents with their exorbitant commissions, translating to much lower payment for the same amount of coverage.

Requesting a quote from UforLife, to cover a person aged 25 for a sum insured of RM100,000 requires only a monthly premium of RM17.70. A perfect solution to low financial commitments for essential financial security, wouldn’t you agree? Of course, going this route requires you to have at least a basic understanding of insurance components and how they work, which you can learn more from Loanstreet’s Complete Guide to Life Insurance: The 5 Basic Attributes.


Do not compromise – insurance is essential for financial security and peace of mind, metaphorically much like placing a safety net under a tightrope; and remember, it’s more for your loved ones rather than yourself. At this point, you should seriously consider revisiting your current policies, or purchasing one if you are uninsured. If you have reservations about what your insurance agent is telling you, read up on the Different Types of Life Insurance Policies available to gauge for yourself what best suits your current situation.

Other than that, if you're already planning to have your car, motorcycle and travel insured, check out our insurance page to get an instant quote for FREE and purchase it immediately if it fits your needs.

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About the Author

Team Loanstreet

Run by a professional human-sized team, get resourceful tips & guides from our very own library of financial articles that can help improve your financial lifestyle & make a well-informed money decision. We strive to provide you with the best service in helping you to get the most out of that DUIT!


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