NH July2022

Living Well
Financial Protection
Choosing a Suitable Insurance Plan
There are generally three steps to take note of when you are looking
to invest in health insurance:
1
Know your current financial situation
What are your current financial needs? For example, Kenny is married with a five-yearold
son, and his household expenses are around RM 60,000 per year. In this case, Kenny
needs to consider, if anything should happen to him, how much to leave behind for his
wife to sustain their lifestyle, and how much to allocate for their son’s education. He
would also need to think about his liabilities, such as mortgage loan and hire purchase.
2
Assessing the risks and determining the sum assureDd
From the first step, we have determined how much Kenny needs, which reflects his Life
Insurance coverage requirements. Next, we need to determine the sum assured coverage
for his Critical Illness and Personal Accident plans. The benchmark for these plans is
between three to five times of a person’s annual income. Let’s say Kenny is earning
RM 100,000 per annum. As he has an office-based managerial position, he has a lower
risk than a logistic driver or field engineer. So, he needs to purchase approximately RM
300,000 for Early Critical Illness and RM 300,000 for Personal Accident.
3
Decide based on your requirements
Whether you talk to an expert and a licensed financial planner or insurance agents
from different companies, you will get a variety of quotations for different plans with
specific benefits and prices. Most importantly, you need to understand your needs and
how different features and benefits can meet your needs.
Other Factors to
Consider
The cost of insurance
and premium allocation
is also important when
comparing insurance plans.
Some companies will have
frequent price adjustments,
while some plans in the
market allocate a smaller
portion to the agent’s
commission. Nevertheless,
all this will benefit the
insured (who bought the
policy) because it helps to
raise the savings portion in
a faster period of time.
To take it a step further,
you can also personally
investigate the company’s
cash flow background,
payout history and
reputation. Some companies
have poor records of
insurance claims, which
may be due to the cash
flow situation of a company,
or the company is not
operating onshore. This
means that it takes a longer
time when it comes to the
claims procedure.
44 Natural Health * July 2022 VOL 128