My Blog

Brunei Shell Learning Hub

"Supa Saver" — A supermarket in Brunei

Squash court in Kelab Rekreasi Petroliam,  Lutong.

WHPH — participating in boat rowing competition

local newspaper

A local bar wif live band (1 Heineken = RM14 + SC)

Wan Tan Mee @ RM3 (big). Not nice, all  white colour one.

21 days stay at Grand Palace Hotel, a 4 star hotel in Miri =)

Miri’s Court Mammoth (furniture delivery = RM50 !!!!)

Boulevard — Miri’s largest shopping centre, for now.

SSB’s Clinic

Good news!!! The Employees Provident Fund (EPF) targets on giving its members a 5.15 to 5.25% dividend this year as a result of its successful investment overseas. This is good as last year’s pay-out was only 5%. Currently, standard employee contribution as required by law is 11% while employer is 12%.

A quick comparison of our EPF with our neighbour’s (CPF, Singapore) –Employee 20%, employer 13%, interest rate 3.5%. What do you think ?

What life insurance agents truly care about is what they can get from you rather than what you can get from them.

Thus, we need to really understand our basic needs to avoid paying too much to the company. For example, let’s consider the following profile:

Profile: male, non-smoker, healthy, age 30

Insurance coverage: RM50, 000

Period: 30 years

Your agent will surely recommend on either:

1. Investment-linked life insurance

Premium: RM1, 800 per annum (increases as age increases)

Benefits: RM50, 000 coverage, level coverage, crisis cover with critical illness, investment value at RM250, 000 upon 30 years maturity (depends on how well the fund/bond you invest in perform).

2. Whole Life** Insurance (without investment activity) with a higher annual premium (does not increase with age) and a fixed cash value which is generally lesser than an investment return.

If he is truly a good friend of yours, he will probably quote you the following two "real savers" packages:

1. Term life** insurance (level coverage)

Premium: RM662.50 per annum (save 63% compare to investment-linked)

Benefits: RM50, 000, level coverage*, crisis cover with critical illness, 30 years term life without cash value or investment value

2. Term life** insurance (reducing coverage)

Premium: RM283.50 per annum (save 57% compare to term life level coverage)

Benefits: RM50,000, reducing coverage*, without crisis cover on critical illness, 30 years term life without cash value or investment value

**The difference between whole life and term life is that in whole life,

1. you will have to pay extra premium every year. This extra premium goes into your savings for the life insurance.

2. after 30 years, you get your return or cash value (usually at a rate equal to fixed deposit if nothing happens to you. If anything happen to you, you will get paid by that extra premium you’ve paid.

3. after several years, you don’t have to pay for the premium.

*The difference between level coverage and reducing coverage is that

1.  for level coverage, your life insurance coverage stays at RM50,000 for the next 30 years.

2.  for reducing coverage, your life insurance coverage will reduce every year from RM50, 000 right up to NIL at the end of the 30 years.

3.  level covers you from critical illnesses.

In my personal POV, if you want a risk-free and low premium policy, it is best to go for a level coverage term life policy. "Whole life" policy is truly misleading because what makes it look like a whole life protection is that such "financial protection" actually comes not from the insurance element of the policy but from the savings element of the policy (That’s your own savings and not "benefits" from the insurance company). You could have done so much better if you use the extra premium you have to pay for investment-linked or whole life on real estate, stock or FOREX.

Reducing coverage term life is generally not a good idea because it does not have crisis coverage. Crisis coverage for critical illness (now mostly they offer up to 36 kinds) is too important to sacrifice for a cheaper premium.

Investment-linked might be a good idea for those who do not know how to make money out of investment, or those who can’t save money. But remember, there’s always a risk in this policy.

With reference to ‘Life Insurance in Malaysia’ by a blogger named Chen Tong.