Life Insurance with Guaranteed Income, Care, and Legacy for Your Golden Years

Planning for life’s golden years involves more than setting aside money for retirement. It dictates careful strategizing to ensure financial stability, health care, and a lasting legacy for loved ones.

Life insurance play a key role in achieving these goals, offering guaranteed income, care, and, indeed, a legacy. From understanding the different types of life insurance to examining specific products like Prudential's PRULive Well, this post aims to provide clarity and actionable insights.

What is life insurance?

Life insurance is a contract between you and an insurance provider. The concept is quite simple. In exchange for periodic premiums, the insurer pays a lump sum—referred to as a death benefit—to one's beneficiaries upon one's passing.

However, many modern life insurance policies now offer more than just a death benefit. They include options for guaranteed income, care benefits, and legacy planning.

Types of life insurance

The main types of life insurance can be broken down into:

• Term life insurance: Covers a specific term, such as 10, 20, or 30 years. It is generally less expensive and provides a straightforward death benefit.

• Whole life insurance: Provides coverage throughout your entire life.

• Investment-linked life insurance: Offers a combination of protection and investment, where policyholders can choose their preferred funds.

• Universal life insurance: A flexible policy that combines life coverage with an investment component. A combination of protection and investment, but the return is managed by the insurer. Policyholders can iteratively adjust their premiums and death benefits according to their financial situation.

 

Life insurance vs medical insurance

While medical insurance covers healthcare expenses during one’s lifetime, life insurance focuses on financial protection for your dependents after your passing.

In practice, medical insurance pays for hospital bills, treatments, and medical procedures, whereas life insurance provides a lump sum payment to your beneficiaries. In essence, both are crucial in a comprehensive financial plan but serve different purposes.

Why is life insurance important?

Life insurance serves as a proactive financial safety net for your family and provides multiple benefits during your lifetime.

Death benefit

The death benefit is perhaps the most recognised aspect of life insurance. This lump-sum payment provides immediate financial relief to beneficiaries. In fact, it can be utilised for various purposes, such as paying off debts, mortgages, or funding education.

Income benefit

One of the primary functions of life insurance is to provide an income benefit to dependents after the policyholder's passing. This ensures that loved ones maintain their accustomed standard of living —despite the demise of the primary breadwinner.

Disability benefit

Many life insurance policies offer disability benefits that provide financial support if the policyholder becomes unable to work due to illness or injury. This feature helps cover living expenses during challenging times.

Legacy planning

Legacy planning ensures that you leave behind a financial inheritance for your loved ones. It can include funds for education, maintaining property, or simply guaranteeing financial stability for future generations.

Insurance payouts are tax-free

In many countries, life insurance payouts are not subject to income tax. This means that beneficiaries receive the full death benefit without deductions, providing them with crucial financial support during a difficult time.

Retirement planning

Life insurance may also be an effective tool for retirement planning. Certain policies offer guaranteed income options that can supplement retirement savings, ensuring a comfortable lifestyle in later years.

Debt clearance

Life insurance can also be used to settle debts, ensuring your loved ones aren’t burdened with liabilities such as a mortgage or personal loans.

How to choose a life insurance policy?

Choosing the right life insurance policy requires careful consideration of various factors:

1. Assess your needs: Based on your financial commitments and objectives, carefully ascertain the amount of coverage you actually need.

2. Understand policy types: Familiarise yourself with disparate types of policies and select one that aligns with your needs.

3. Evaluate premiums: Compare premiums across different providers while considering your budget.

4. Check riders and benefits: Look for additional benefits like disability riders or premium waivers that enhance your coverage.

5. Consult an expert: Seek advice from a licensed insurance agent who can expertly explain the options available in your region.

Life insurance in Malaysia

Malaysia’s life insurance market offers a range of products designed to meet diverse needs. Among these PRULive Well, by Prudential stands out for its comprehensive benefits tailored for older adults.

It combines life insurance, income benefit, disability benefit, and financial planning into one robust product with the following benefits:

• Income benefit: Monthly income benefit payout upon disability to provide options for assisted living.

• Maturity benefit: Provides premium refund when your policy matures.

• Death benefit: To pass on your legacy.

• Waiver benefit: To waive your premium upon disability to ensure continuous coverage

 

How much is life insurance in Malaysia?

The cost of life insurance in Malaysia may vary based on factors like health, age and policy type. For example, whole life insurance may have higher premiums because of its cash value component. Riders like disability benefits and premium waivers can add to the cost but provide valuable protection.

However, as a rule of thumb, life insurance coverage should be approximately 10 to 15 times an individual's annual income. It is important to always speak to an established Wealth Planner to get the best coverage that can adequately protect your family.

Conclusion

Life insurance offers more than just protection— it's a comprehensive strategy for financial security, health care, and legacy building in one's golden years.

It can help pay for necessities like mortgage payments, school fees, and burial costs by giving recipients a tax-free lump sum. Financial security is further improved by the fact that most life insurance policies accrue cash value over time. This cash value can be used for emergencies or retirement funding.

Policyholders can also add riders to their life insurance to provide coverage for serious illnesses or long-term care requirements, providing complete protection at different life stages.