3 Ways On How Insurance Works In Malaysia
3 Ways On How Insurance Works In Malaysia
What is insurance? The jargon and terms associated with insurance can be a little bit intimidating for a layman like us, if you’ve ever felt like you were drowning in insurance jargon, this is for you.
Basically, we can see the function of insurance in 3 simple steps, namely:
- Create
- Protect
- Distribute
When we are at the beginning of our career or job, we might not have enough resources to create massive wealth or assets. Insurance pose as a flexible financial tool that gives you a 2-in-1 function, creating wealth in a systematic way through its invested funds and pay out a significant amount of money should premature death/disability occurs. It is considerably effect and important to create assets using life insurance at this point of time
As we ascend to the peak of our career or businesses, there might be times where we are exposed to creditors’ risk as part of the business needs. In order to protect and safeguard your asset and also your family’s (if available) wellbeing, insurance could be the perfect tool in doing so. The proceeds from insurance payout are creditor proof if it is a trust policy, which means the creditor has no rights in obtaining any portion of the payout and the beneficiary has 100% in enjoying the proceeds.
As our living dynamic and needs change, there will be a time for estate planning for the next generation. Would it be writing a will for effective distribution? Would it be setting up a testamentary trust for full control of instruction for wealth distribution involving minors? All this is essential in making sure our hard earn wealth and asset is passed on according to our desired intention. In this aspect, insurance plays a great role in creating the funding for the needed distribution with minimal cost and capital involved.
If you feel that this article helps you in understanding life insurance more, do feel free to share it out, and if there is any further questions you would like to ask, send your details below and our financial portfolio advisor will provide free consultation on financial planning and estate planning.
This post is written by our guest author, Brian Fam.
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