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I’m single. Do I need life insurance?

    Single people without dependents often think that they don’t need life insurance because no one is relying on their income. But there are some reasons why you might need life insurance even if you’re single.

    How does life insurance work?

    It helps to first understand what comes under life insurance.

    Life insurance pays out a lump sum to the policyholder’s beneficiaries after the policyholder dies.

    NOTE that most life insurance policies today also include coverage for Total Permanent Disability (TPD). So on top of providing the beneficiaries a lump sum in the event of the policyholder’s death, the insurance company will also provide a lump sum to the policyholder, should they become totally and permanently disabled, and therefore no longer able to work.

    How can life insurance help you even if you’re single?

    Being a single, career person with a comfortable income, surely, there’s no need to get life insurance at this point, right?

    Not really. Here’s why.

    1. You have debts to pay

    When you die, you would want to leave behind fond memories, not debts that will burden your loved ones, especially your guarantors who will have to take the baton and continue to pay off your debts. 

    Ideally, you would want to pay off all your debts before you leave this world. But time may not be on your side to settle your long-term debts like a housing loan given the usually large amount of debt. 

    If you’re in debt, it’s crucial to plan now how to pay off your debts after you’re no longer around. Even if your guarantors are capable of paying your debts, there’s no guarantee that they can still afford to do so in the future, right? 

    Above all, it’s primarily your responsibility to pay off your debts.

    How can life insurance help pay your debts?

    As your life insurance will pay out a lump sum to your named beneficiaries after your death, the money can be used by your guarantors to pay off your debts.

    Note that a higher amount of lump-sum payment by the insurance provider may translate to a higher insurance premium. In this regard, it’s best that you look into your financial commitments before deciding the amount of premium that you can pay either monthly, quarterly, half yearly or yearly, depending on your preferred payment mode.

    So give life insurance a thought. You’ll take comfort in knowing that your debts won’t be a source of burden to anyone, thanks to the cash payout from your life insurance.

    But I’m debt-free. Do I still need life insurance?

    YES! In the event that you become totally and permanently disabled, you may no longer be able to work and sustain yourself, so life insurance will be of great help as the next point clarifies.

    2. You may lose your income

    You may be gainfully employed and thriving in your career at this point of your life. Given your high-flying career and growing income, it’s pretty certain that you don’t have to worry about maintaining your life.

    But what if you get into an accident that leaves you totally and permanently disabled and unable to work?

    It’s hard to imagine but everyone has to prepare themselves for life-threatening accidents that can happen to anyone including you.

    How can life insurance help replace your income?

    When you have life insurance, you can put your mind at ease should anything untoward like accidents happen to you. When you’re no longer able to work due to total permanent disability, the one-off payment can ease your financial burden and help you in your recovery. As you’re free to use the money for any purposes, you can also consider investing the money to grow it if you have a knack for investing.

    The money you receive from your life insurance may not last you forever, but you’ll at least have a financial cushion that will support you longer while you look for other feasible means of income. So do consider life insurance to support you financially in your times of need.

    3. Someone has to pay for your funeral costs

    It’s best that you prepare ahead of time for almost everything that’s within your control now. This includes planning on financing your funeral.

    Do you know how much a funeral costs in Malaysia?

    Depending on a few factors including your religion and funeral rites, funeral expenses can eat up thousands or even tens of thousands of Ringgit. According to this source, the estimated funeral expenses for four main religions in Malaysia are as follows:

    • Muslim: RM1,000
    • Buddhist/Taoist: RM20,000 onwards (costs may shoot up during Chinese New Year)
    • Christian: RM10,000 onwards
    • Hindu: RM5,000 (including 8th and 16th day funeral prayers)

    Shocked by the figures?

    As morbid as it sounds, you may have to start saving up now to finance your funeral expenses. Just bear in mind that the expenses may inflate so it helps to save a few times more than the estimated figures.

    How can life insurance help finance your funeral costs?

    Saving up and setting aside a portion of your money for your funeral is a good way to prepare for your passing.

    Another recommended way is to get yourself life insurance as the cash payout from the insurance can be used for any purposes, including financing your funeral.

    Did you also know that certain life insurance policies come with “funeral expenses” benefit?

    When you pass away either due to natural or accidental causes, your family or beneficiaries will receive “funeral expenses” benefit in a form of money that your family can use to manage your funeral. 

    If you like, consider a life insurance policy that includes “funeral expenses” benefit, to relieve the financial burden of your loved ones. 

    Do you need life insurance even if you’re single?

    It’s a big YES. But you don’t have to rush into buying one. Do your homework first and speak with insurance specialists on Bjak so you can secure a life insurance policy that offers you the most coverage at the best price. 

    (Sources: iMoney, myPF)