Why the hack of buying Life Insurance at a young age?

Published September 13, 2024September 13, 2024 by jamin

Why the hack of buying life Insurance at a young age?

Let’s go more in-depth with real-life examples and illustrations of why buying life insurance early is important. Here’s a detailed explanation with examples that may resonate:

### 1. **Health Advantages: Lower Premiums When You’re Young**

When you’re young and healthy, insurance companies see you as a lower risk, so they offer you lower premiums. Once you hit your 30s, your health can begin to decline—whether it’s gradual weight gain, higher cholesterol, or even the onset of chronic diseases like diabetes. For example:

**Example 1: Daniel (Age 24) vs. James (Age 35)**
Daniel is 24, in great health, and buys a life insurance policy with a critical illness rider. He locks in a premium of $100/month for a $500,000 sum assured. Fast forward 11 years: Daniel’s friend James, now 35, decides he should get life insurance after hearing about someone in their social circle who had a heart attack. When James goes to buy life insurance, he discovers his premiums are $250/month for the same $500,000 sum assured. Why? By this point, James has developed slightly elevated blood pressure and is considered a higher risk to the insurer. Also, he’s older, which naturally comes with higher premiums.

Why the hack of buying life insurance at a young age?

#### Key Lesson:
**Daniel** pays $100/month, while **James** pays $250/month, yet both receive the same coverage. James ends up paying much more over his lifetime. By buying young, Daniel enjoys cost savings that add up over time, all while having the same financial protection.

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### 2. **The Unpredictability of Life: Accidents or Sudden Illness**

Many people think that because they are young and healthy, they are invincible. However, life has a way of throwing unexpected challenges our way. Accidents, sudden illnesses, or even genetic health conditions can arise out of nowhere. While we exercise and stay healthy, we can never predict when or if a sudden tragedy may occur.

Why the hack of buying life insurance at a young age?

#### **Example 2: Amy’s Story**
Amy was a fit and healthy 28-year-old marathon runner. She believed she didn’t need life insurance since she didn’t have any dependents and was focused on her career. However, she was diagnosed with an aggressive form of cancer at age 32, which required intensive treatment and left her unable to work for over a year. Fortunately, Amy had bought a life insurance policy at 29 with a critical illness rider when a friend had suggested it. Her critical illness payout of $200,000 helped cover her medical bills and living expenses while she recovered.

Imagine if Amy had delayed buying her life insurance until after her cancer diagnosis. Insurers would either refuse her coverage or apply hefty exclusions, leaving her with no financial safety net.

#### Key Lesson:
If **Amy** hadn’t bought her policy when she was young and healthy, she would have had no financial support during her illness. Her early decision to get insured gave her the security she needed when the unexpected happened.

Why the hack of buying Life Insurance at a young age?

### 3. **Financial Security for Your Loved Ones**

Even if you don’t have a spouse or children when you’re young, planning ensures your loved ones won’t face financial hardship if you pass away or become incapacitated. Accidents or illnesses can happen anytime, and life insurance ensures that your family is cared for, no matter what happens to you.

#### **Example 3: John’s Tragic Accident**
John was 30 years old, married, and had a young child. He had a good job, and everything was going well for his family. John was also an avid motorcyclist, and one weekend, while riding with friends, he was involved in a serious accident that left him permanently disabled. As the family’s sole breadwinner, his inability to work devastated the family’s financial stability. However, John had taken out a life insurance policy with a total permanent disability (TPD) rider five years earlier. The insurance paid out a lump sum of $500,000, which helped his family cover medical expenses, pay off their mortgage, and fund future living expenses.

Without this policy, John’s wife would have been forced to sell their home, and his family’s standard of living would have suffered dramatically.

Why the hack of buying Life Insurance at a young age?

#### Key Lesson:
**John’s** decision to buy life insurance early meant his family had financial security after his accident. Without that protection, they would have faced the harsh reality of selling assets, struggling with medical costs, and managing day-to-day expenses with no income.

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### 4. **Cost Efficiency: Locking in Lower Premiums for the Long Term**

Life insurance premiums are lower when you’re young. If you buy when you’re young and healthy, you’re locking in those lower premiums for decades. On the other hand, waiting until you’re older could result in paying much higher premiums for less coverage.

#### **Example 4: Sara (Age 24) vs. Lisa (Age 36)**
Sara is 24 and decides to get a life insurance policy. For a 25-year term policy with a $500,000 sum insured, her premiums are $120/month. Lisa is 36 and decides to get the same coverage. However, because of her age, and her recent diagnosis of mild hypertension, her premiums are $330/month. Over 25 years, Sara will pay $36,000, while Lisa will pay $99,000 for the same coverage.

#### Key Lesson:
By buying at age 24, Sara saved $63,000 over 25 years compared to Lisa, all because she locked in her lower premium when she was younger.

Why the hack of buying Life Insurance at a young age?

### 5. **Avoiding Future Exclusions and High-Risk Premiums**

As you age, insurers may impose exclusions for health conditions that could have been covered if you had bought your policy earlier. Chronic illnesses such as hypertension, diabetes, or obesity often result in higher premiums or exclusions for related diseases, like heart attacks or kidney failure.

#### **Example 5: Mark’s Health Decline**
Mark is 40 and just found out he has early-stage diabetes and high cholesterol. When he tries to buy life insurance, the insurer imposes exclusions on any claims related to heart disease, stroke, and kidney failure. Mark also has to pay a higher premium of $400/month due to his substandard health status. If Mark had bought his policy in his 20s, these exclusions or premium hikes would likely be much lower, as he was healthier then.

#### Key Lesson:
**Mark** is now stuck with higher premiums and exclusions, which he could have avoided if he had locked in his life insurance coverage when he was younger and healthier.

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### **Conclusion:**

While it’s tempting to focus on buying a car, a house, or starting a family when you’re young, life insurance should be part of your financial foundation. By getting life insurance early, you secure your financial future with affordable premiums, protect your loved ones from potential hardship, and ensure peace of mind. Remember, life is unpredictable—whether it’s an unexpected illness, accident, or even death, the consequences can be devastating if you’re not prepared. Buying life insurance is not just an investment in your future, but in the security and well-being of those who depend on you. You insure your car, a depreciating asset—why not insure the most valuable asset you have: your ability to earn and provide?

Taking action while you’re young and healthy ensures you lock in low premiums for life, gain higher coverage, and avoid future exclusions for health-related issues. It’s not about being pessimistic; it’s about being prepared. Your future self and your family will thank you for making this smart decision today.

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Beware 1 setback of Mortgage Reducing Term Assurance

Published September 5, 2023September 5, 2023 by jamin

Beware 1 setback of Mortgage Reducing Term Assurance

One alternative to mortgage-reducing term assurance (MRTA) is mortgage-level term assurance (MLTA). MLTA is a whole life insurance policy that provides coverage for the full duration of the mortgage term. Unlike MRTA, the coverage amount remains constant throughout the policy term, which may provide more financial security for the insured and their loved ones.

MLTA is typically sold by mortgage brokers, insurance agents, or bankers as an alternative to MRTA. It offers a broader range of benefits and flexibility compared to MRTA, including potential cash value accumulation and the ability to use the policy for other purposes, such as income replacement or estate planning.

It’s important to note that MLTA may have higher premiums compared to MRTA due to the longer coverage period and potential cash value accumulation¹. The suitability of MLTA as an alternative to MRTA will depend on individual circumstances and needs. Consulting with a financial advisor or insurance professional can provide personalized guidance based on specific requirements.

Beware 1 setback of Mortgage Reducing Term Assurance

Mortgage-reducing term assurance (MRTA) is a type of insurance that is specifically designed to cover a decreasing mortgage balance over time. Here are some pros and cons of mortgage reducing term assurance:

Pros:

Cost-effective: MRTA is generally more affordable compared to other types of mortgage insurance¹. Since the coverage amount decreases over time as the mortgage balance reduces, the premiums are usually lower.
Simplified underwriting: MRTA policies typically have simplified underwriting processes, making it easier to obtain coverage compared to other types of insurance.
Tailored coverage: MRTA policies are designed to align with the decreasing mortgage balance, ensuring that the coverage amount remains appropriate throughout the loan term.
Peace of mind: Having MRTA can provide peace of mind, knowing that your mortgage balance will be covered in the event of death or disability.

Cons:

Coverage reduction: As the mortgage balance decreases, the coverage amount also decreases over time. This means that towards the end of the loan term, the coverage may not be sufficient to fully pay off the remaining mortgage balance.
Limited coverage: MRTA only provides coverage for the mortgage balance and does not offer additional benefits such as investment or cash value accumulation.
Non-transferable: MRTA policies are tied to a specific mortgage and are non-transferable. If you refinance or sell your home, you may need to obtain a new policy.
Temporary coverage: MRTA policies typically have a fixed term, which means that coverage will end after a specified period. If you still have a mortgage balance at the end of the term, you will need to seek alternative coverage.

It’s important to evaluate your specific needs and circumstances before deciding whether mortgage-reducing term assurance is the right type of insurance for you. Consider speaking with a financial advisor or insurance professional who can provide personalized advice based on your situation.

Beware 1 setback of Mortgage Reducing Term Assurance

Investment Link and Mortgage Reducing Term Assurance are two different financial products with distinct purposes.

Investment Link is a type of investment product that allows you to invest your money in various investment options such as stocks, bonds, and mutual funds. The returns on your investment are dependent on the performance of these investments and can provide potential growth over time. This type of product is typically used to build wealth and accumulate savings for the long term.

On the other hand, Mortgage Reducing Term Assurance (MRTA) is a type of life insurance policy specifically designed to cover the outstanding amount of a mortgage loan. In the event of your death, the policy pays out a lump sum to the lender, reducing or fully eliminating the outstanding mortgage balance. The purpose of MRTA is to provide financial protection to your family and loved ones by ensuring that they won’t be burdened with repaying the mortgage in the event of your passing.

In summary, the Investment Link is for investment purposes, aiming to grow your wealth over time, while Mortgage Reducing Term Assurance is a life insurance policy that covers your mortgage loan, providing financial protection to your beneficiaries. Both products serve different purposes, and it’s important to assess your needs and financial goals before deciding which one is more suitable for you.

Beware 1 setback of Mortgage Reducing Term Assurance

One option to protect your housing loan if you are unable to work due to illness is to consider mortgage disability insurance. Mortgage disability insurance is a type of insurance that can cover some or all of your mortgage payments in the event that you can’t work due to illness or injury. This insurance policy provides a benefit specifically for your mortgage payments and can help ease the financial burden of your housing loan while you are unable to work.

Mortgage disability insurance works similarly to regular long-term disability insurance, but it specifically focuses on covering your mortgage payments during your period of disability. It does not pay a percentage of your pre-disability income like regular disability insurance would.

The cost of mortgage disability insurance will depend on various factors such as the remaining balance of your mortgage loan and the length of your loan term. It’s important to note that the cost of the insurance policy will typically be a monthly premium that you will need to pay.

In addition to mortgage disability insurance, it’s also recommended to be proactive in managing your finances and creating a plan to ensure you can pay your bills while you are unable to work. This may involve creating a bare-bones budget and considering other strategies to help ease the financial impact of your disability or illness.

Remember, it’s essential to carefully assess your financial situation and consider consulting with an insurance professional to determine the best option for protecting your housing loan in case of inability to work due to illness.

In order to cover illness and build cash value for your housing loan, there are a few insurance options to consider:

Mortgage Protection Insurance: Mortgage protection insurance is designed to provide coverage for your mortgage payments in the event of illness or disability that prevents you from working. It can help ensure that your mortgage payments are covered, and your home is protected.
Life Insurance with Cash Value: Another option is to consider a life insurance policy with a cash value component. Certain types of life insurance, such as whole life or universal life insurance, can build cash value over time. This cash value can be accessed in the future to supplement your income or cover your housing loan payments in case of illness.
Critical Illness Insurance: Critical illness insurance provides a lump sum payment if you are diagnosed with a critical illness covered by the policy. This payment can be used to cover your housing loan payments or any other financial obligations you may have while dealing with the illness.

It is important to carefully review the terms and conditions, coverage limits, and exclusions of any insurance policy before making a decision. Additionally, consulting with a financial advisor or insurance professional can help you determine the best options based on your specific needs and circumstances.

Note: The above information is a general overview and not personalized financial advice. Please consult with a financial professional for advice tailored to your specific situation.

5 Reasons Why You Don’t Want to Buy Life Insurance

Published April 11, 2022April 11, 2022 by jamin

5 Reasons Why You Don’t Want to Buy Life Insurance., sadly, just 62% of Malaysians had life insurance in 2021. It implied that 38% of the population is uninsured. Why is this situation so pathetic? Is it the fault of the agent or assured?

Not only no insurance, but also inadequate coverage. The average is RM100,000-RM150,000. Can it feed your loved one for 5 or 10 years if you don’t return? The sum varied depending on whether the spouse or children worked. Nonetheless, the little money insured hardly lasts a year for a single parent with two or three kids in the metropolis.

5 Reasons Why You Don’t Want to Buy Life Insurance

Is it the parent’s duty to look after the children after one dies? The bank auctions the house for six months arrears in repayment without any insurance to cover the loan tenure.
When one parent remarried, the innocent child suffered. Victimized by abusive stepparents? Unreported rape, tortured with several cuts and bruises, and ancient wounds on an emaciated body An nasty mother’s son was saved by the cops. The argument stated confined the youngster like a dog in a little cage. Can your spirit rest if your child is abused?

5 Reasons Why You Don’t Want to Buy Life Insurance

Expensive

Car loan, parking, gas, and vehicle maintenance all eat into a newlywed couple’s monthly budget. There’s also college loans, rent, utilities, an emergency fund for a child’s doctor, and gifts for elderly parents. It’s a blessing to have a little disposable income left over. Buying life insurance is a “luxury” for people on a restricted budget.
An economical term life insurance policy should cost less than a daily high tea at a local café. Do you prefer expensive life insurance to a bedridden spouse or child at home? Death brings swift solace, but the loved ones’ anguish endures. So why be a careless parent who may later curse those still alive who struggle to meet basic needs?

5 Reasons Why You Don’t Want to Buy Life Insurance

Healthy

Agents nowadays complain difficulty closing sales with youthful, busy people. The yuppie goes to the gym five days a week after work. Similarly, the diet eats moderately due to health and budget constraints. How true is it? Isn’t it Do you prefer soft drinks to mineral water or fruit juice? The diabetes and hypertensive sufferers slowly knock on their door. The Malaysian population portrayed young people in their 30s, which was unknown a century ago. How many Malaysians have a yearly physical examination? Congratulations on a clean report. Otherwise, you’re an insurable or substandard risk.

Money Printing Machine Cover

Understanding insurance and unpredictable humans behaviors may take years. You have covered their moveable possessions like car, motorcycle, home, camera, and household insurance, but not themselves. Road accidents and armed robberies are rampant, so they pray for nothing. No one can anticipate when you will be sick, bedridden, or in the grips. But there’s no insurance for the equipment that prints your money: your body. Overuse causes machinery to break down, and your body is no exception. As a result, a patient dies on a hospital bed.

5 Reasons Why You Don’t Want to Buy Life Insurance

Negative Views
The two older customers sat between a young man and an insurance representative.
As my neighbor’s son spent a week in a private hospital, his insurer declined his claim.
“Why,” another inquired.

“I don’t know why they rejected me; the agent was first helpful, but then he was unavailable.”
Agent and insurance are legal lesson conman that offer you the sky but provide a barren hope.
Please consult your spouse before buying your investment-linked idea, young man. A senior client consoled the vivacious agent.
“It’s fine to reconsider,” the agent says respectfully.
So one rejected assertion became a wildfire myth.

The reality
Sometimes the half-baked agent will ask the assured to sign without filling out the medical history. They informed him he has hypertension and is on long-term medication. Whose? It’s the Assured, who stupidly signed the dotted line on the proposal form.

Its moral hazard
I did help reclaim a denied case. A hospital record revealed that assured had removed kidney stones in a government hospital, to my dismay. When asked by the agent about previous operations, he said NO. As a result, the insurer refused his kidney dialysis claim.
Another case of hypertension was answered poorly despite regular oral treatment. Insurers frequently deny claims for later-stage stroke or kidney failure.

utmost good faith
The insurance legislation governs four principles, including utmost good faith. When entering into an insurance contract, the assured must disclose all material facts to the prudent underwriter before accepting or rejecting the offer. Whether the assured knows or not, inform the insurer. So, true advise bears all facts to the insurer to avoid future claim issues.

5 Reasons Why You Don’t Want to Buy Life Insurance

I am Single
Most y generation don’t care—chase after the latest trendy iPhone device every six months. Also, holiday priority, credit card payment afterwards. Life insurance? Why? I am independent. Hasty response? Single, no ties, no family obligations, no parent, no sibling, living in own world, why care? Then why not let the government handle the burial or leave the body on the road or hospital to rot?

Maybe a Tibetan “sky burial” with an eagle will do.
Your grey-haired retired government servant parent doesn’t get a double whammy. Who should pay for a burial place when you lose one child? Unfortunately, you’ve established entire permanent impairment; hiring a nurse or long-term nursing isn’t a hassle. If you are in a nursing home, who pays for your care?

No Cash
Nobody wants to wait for the newbie’s counsel. Eliminating intermediaries for singles or young married couples is common. Or postponed, they may procrastinate for years. Silent sickness has no red alarms on the body. If you have a car accident, you want to be fully covered. Do you believe the insurance company will accept your offer? You flatly decline. But, in reality, most insureds have this bizarre notion. During my 28 years in the insurance field, I’ve seen similar situations. Is the insurer heartless?

5 Reasons Why You Don’t Want to Buy Life Insurance

Tight Budget, put off
We aged with time and the daily ingestion of highly toxic junk food. I met an elementary school student who had dialysis at the public hospital. Today’s civilization is characteristic of a stressed lifestyle chasing monetary rewards. The insurance premium increases with age. If we compare a 20 year old to a 30 year old, the premiums are greater and the sum covered is smaller. Aging immune systems make us susceptible to sickness. It even applies to a ten year gap band.

In short, acquire insurance when you are young and healthy to save money on premiums and increase your coverage.

Sentence length jargon

How many lawyers and layman can read, understand, and interpret the insurance policy? As a result, no one is an all-rounder. Consult your agent or even the insurer for a comprehensive explanation. Examine the next point carefully; you will need to handle a claim soon.

Exclusions

The insurer would refuse liable if all sickness or circumstances defied the policy in this column. For example, commit suicide within a certain time frame or claim a pee-existing sickness. Please acknowledge receipt of the policy by highlighting to the assured. It is better to avoid short-term discomfort than to blame the consultant’s recklessness.

Start Date

The policy was enforced with the written date and the policy’s expiration date. In medical or 36 severe feared illness claims, the start date is crucial. Never miss it. Sometimes, assured would go to the hospital and bravely ignore the waiting period. The assured would then propagate rumors that the insurer is selling a fraud policy, even if the default is with the assured. Defame the agent, and damage your name.

The plan

In this schedule, your name and ID number should be spelled as on your ID. If you find a mistake, fix it right away. So the insurance can deny your future claims. Don’t risk the underwriter’s reaction to your consumer claim.

Indicate whether the insurance is whole life, endowment, term, or investment linked. Premium waiver due to dreaded sickness or the payer. Any day hospitalization, woman disease, and pregnant admission mentioned in your signed proposal form. Scan any deviations, notify the agent in writing, and verify the insurance approves the change. Finally, I noted the insured sum on the schedule.

Declared the policy number for future correspondence with insurance claims or endorsements. How much is the premium? Assured must warn adjusted premium during the life of the cover, not to mention the medical card renewal clearly indicated.

Invest in assurance.

Spend money on a romantic candlelight dinner, a lavish family vacation, or the latest gadget every six months. How about having a policy coverage that ensures all financial restrictions are not occurring in the continued household when you forget your way home one day?

Positively, Malaysia’s new business total premiums grew by 12.4% in 2021 compared to 2020, a double-digit increase.

Your Views
As always, please leave any ideas or questions in the comments area below.