Often one would ask, how much do I have to insure my life for in case of death and permanent disability? There are varying answers to this and they all depend on your financial profile, debts, assets, liabilities etc. As a rule of thumb, have at least five (5) years of annual income replacement in case of death and permanent disability. The higher the better. Say you earn RM60,000 per year, then insure yourself for at least RM300,000. Theoretically it means your dependent will be able to sustain their lives for the next five (5) years in case you are gone.
As a responsible parent, you would then ask, is five (5) years of income protection adequate for your loved ones? Would they be able to pick themselves up when you are gone? Should I provide more if I am able to do so?
This is when income protection using the Capital Protection method will be useful. This concept is pretty simple. Say in the case above with annual income of RM60,000, in case of your death, your dependents would need RM1 million in an investment instrument generating at least 6% per year in order to replace your income of RM60,000 per year when you are gone. Theoretically, by living on the dividends generated, the capital will be intact assuming there is no increase in living expenses and excluding inflation effect. This amount of money can last for generations! In our current financial market, 6% return per year is pretty feasible in instruments such as Tabung Haji, ASB, ASW etc.
By now you must be wondering:
- How much will it cost to own an RM1 million life policy?
- Do I have to undergo medical check up?
- Can I get back some portion of the money in case nothing happens to me?
- Can I choose to only pay the contributions until I retire?
The good news is AIA Public Takaful has the perfect solution for you with A-Life Signature-i. For a 40 year old non-smoker executive, you only need to pay less than RM700 per month to get an RM1 million life coverage. The younger you are, the cheaper it is. Better still, you don't have to undergo medical check up for coverage amount less than RM1.5 million.
You can also choose to contribute for 5, 10 or 20 years only but you are still covered until the age 70. The best news of all is that you will get back maturity benefit upon expiry of your life coverage. There would be no loss in paying premium. This can be a secondary source for retirement fund.
An RM1 million policy is now feasible with A-Life Signature-i. Prepare a legacy that can last for generations. Act today.