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June 14, 2024
Essential Life Tips: Securing Your Future with Insurance and Takaful
Tips for securing your financial future: Track expenses, save, pay off debts, and invest wisely. Are you ready for the future?
The future is inevitable. It is something some of us think a lot about, our minds weighed by various eventualities. And then there are others who refuse to consider it altogether, preferring to live in the moment and deal with things as and when they come. Most of us vary somewhere in the middle – we know the future is there, we know it is coming, and we may even have a plan for some of it. But how many of us are truly prepared for the future? Are we confident in our financial security for what will eventually come?
The Future and You
How do you picture when you think about the future? Is it something far in the distance, several decades away? Or is the future five to ten years from now, coming soon but not just yet? Perhaps it’s closer for you and is just a handful of months away. Or maybe the future is tomorrow, right on your doorstep and ready to pounce when you’re not looking.
Now, what do you think about when you think about the future? Do you have your next holiday on your mind, or are you thinking of something further down the line and picturing your dream home? Maybe starting a family is part of your future plans, or, if the future is when you’re significantly older, you might be thinking about retirement.
There are no wrong answers to the questions above because the future – whether near or far – will one day be today, and to plan is to anticipate the future. The question is, will you have the financial security and means to support your future, whenever and whatever it may be?
Are Malaysians Future Ready?
In the 2023 RinggitPlus Malaysian Financial Literacy Survey, 3,211 Malaysians were asked questions about their financial habits, including their financial preparedness for the future:
Can’t afford to save each month, while 48% can only save RM500 or less
Can survive 3 months or less on their current savings without changing their lifestyles
Live paycheck to paycheck, while 24% spend more than what they earn
Do not have medical protection, while 48% do not have life insurance or takaful
Have not started investing
Have not started planning for retirement
Feel they have enough in their EPF savings for retirement
While the overall results found that Malaysians were more financially resilient now compared to previous years, we are still quite vulnerable when it comes to being financially prepared for our future.
Financially Secure your Future Today?
Going on a holiday without having money to spend on food and other expenses is tough, but retiring without having sufficient funds to cover your daily expenses is probably tougher. Imagine being 80 and still having to go to work daily just so you can afford your meals, bills, and medical expenses.
Ideally, the best time to start planning for a secure financial future is when you’re still young, but the second-best time is today.
Here are Some Tips to Get You Started
Track Your Expenses
Helps you identify how and where you spend your money, debts, where you can cut back, and how you can use your money better.
Save What You Can
Channel surplus money towards your savings. Establish multiple savings goals, e.g. holidays, an expensive item you would like to buy, retirement, etc.
Pay Off Your Debts
Pay your installments on time to avoid hefty penalties. Paying your credit card in full is cheaper in the long run than paying only the minimum.
An important buffer for your savings and finances especially if you lose your job, fall ill, need to make large, unexpected payments, etc.
Invest, Invest, Invest
Investing helps your money grow. Invest affordably with Amanah Saham Berhad or Kumpulan Wang Simpanan Pekerja, or purchase property. Choose stable investments to protect your future funds.
Set Up a
Fixed Deposit
Fixed deposits can earn you good returns, and because they require some effort to access, you are less likely to spend those funds, making them a secure and stable way to protect your current funds for future use.
Insurance and takaful can significantly protect your finances and prevent financial loss, especially in the event of unexpected circumstances.
Protect Yourself and Your Finances with Insurance and Takaful
There are several ways insurance and takaful products can help financially secure your future.
Here's How Insurance and Takaful Can Help to Secure Your Future Financially
Financial Protection
Through illness, accidents and unwanted occurrences, insurance and takaful protects your finances by covering the cost of these incidences, minimising their impact on your hard-earned savings.
Specialised Savings Plans
Specialised savings plans help you save for specific life goals. These plans are usually linked to medical, healthcare, and other products so you can protect yourself while preparing for your future.
Total Permanent Disability (TPD) and Death Benefits
TPD and Death benefits ensure your dependents will be okay if you’re no longer able to financially support them.
Investments
Investment-linked products earns additional returns on your regular contributions. These returns can usually be withdrawn at specific time periods, or at the end of your protection coverage.
Maturity Returns
Reached the end of your coverage period without making a claim? You get all your money back, and more! If you did make a claim, the balance of your premiums paid will also be returned to you
While some might find paying for insurance or takaful counterproductive and would rather put that same amount into their savings, it’s important to remember that these plans provide significantly more in terms of coverage than you are likely to save even if you are diligent.
Consider this: cardiovascular disease is common in Malaysia, and is, in fact, the leading cause of death in the country.1 The cost of treating a heart attack at a private healthcare facility can be very expensive, with heart bypass surgery costing around RM70,000.2 This is equivalent to putting aside RM100 every month for more than 50 years. Had you signed up for insurance or takaful, the monthly payments of RM100 would have paid for your surgery whether you’ve been a policy holder for a few months* or 50 years.
So, if you’re thinking about securing your future, signing up for insurance or takaful needs to be a priority as it can help protect and even boost your finances in the short and long run. Etiqa has a variety of takaful and insurance products to support your future plans. Visit us on etiqa.com.my to find out more.
*Depending on the waiting period of your insurance policy or takaful certificate.
