Do I Need Life Insurance?
One of life’s certainties is that one day, we will pass on. While we may not be around to worry about money at that point, our loved ones will still face financial responsibilities. That is where life insurance comes in — it provides protection and peace of mind for those we leave behind.
This article is part of a series that reviews the main types of insurance and protection products available, including:
Accident, Sickness & Unemployment Cover
Income Protection
Critical Illness Cover
Life Insurance
What is Life Insurance?
Life insurance pays out a lump sum to your beneficiaries when you pass away. It’s called an assurance rather than insurance because it is guaranteed to happen eventually.
There are different types of life insurance:
Whole of Life Cover – Protects you for your entire life. It will eventually pay out, usually up to a very advanced age (e.g., 90+ years).
Term Life Cover – Provides protection for a fixed period (e.g., 20 or 30 years). It is generally more affordable and is often used to cover financial obligations such as mortgages or raising children during their dependent years.
Level, Decreasing, or Increasing Cover – Refers to whether the payout amount remains the same, decreases (commonly used with mortgages), or increases over time (to offset inflation).
Why Would I Need It?
Life insurance is most relevant for individuals with financial dependents. Common reasons include:
Paying off a mortgage
Covering outstanding debts
Ensuring family members can maintain their lifestyle
Leaving behind an inheritance or charitable donation
Covering estate taxes or final expenses
If your family would struggle financially without your income, life insurance becomes an essential safety net.
But What About Employer Benefits?
Many employers provide death-in-service benefits, often a multiple of your annual salary. While this is valuable, it may not be sufficient to cover all your financial obligations. Always review whether this benefit would be enough for your family’s needs before relying on it as your only protection.
An Example
Without Life Insurance
Mr. A is married with two children and has a RM500,000 mortgage. His employer provides a death-in-service benefit of four times his annual salary (RM200,000).
In the unfortunate event of his passing, his wife receives RM200,000. After paying funeral costs and clearing smaller debts, she is left with RM150,000. This reduces the mortgage but still leaves a large balance. Without a job, she struggles to maintain monthly repayments and eventually has to sell the home.
With Life Insurance
If Mr. A had taken out a life policy of RM500,000, his family would receive both the employer benefit (RM200,000) and the insurance payout (RM500,000). This RM700,000 is enough to clear the mortgage, cover immediate expenses, and provide a financial buffer while his spouse adjusts to a new income situation.
How Much Does It Cost?
Premiums vary widely depending on:
Age
Health and lifestyle
Sum assured (amount of coverage)
Policy term
Whether premiums are fixed or reviewable
You can find policies that are relatively affordable, but it’s important to choose wisely. The cheapest option isn’t always the best — especially if premiums can be increased later. Speaking with a licensed advisor ensures you get the right coverage at the right price.
Is It Useful for Me?
Life insurance is especially important if you:
Have dependents (spouse, children, elderly parents)
Share a mortgage or financial obligations with someone else
Want to leave a legacy or donation after your passing
If you are single with no dependents, it may not be necessary — unless you wish to leave a gift to family or a cause you care about.
Final Thoughts
Life insurance is about protecting the people who matter to you. It ensures that in the event of your passing, your loved ones can continue their lives without the burden of unmanageable debt or financial uncertainty.
When deciding whether you need it, ask yourself:
Would anyone be financially impacted if I were no longer here?
Do I care about reducing that impact?
Am I willing to pay a small premium today to give my family peace of mind in the future?
If the answer is “yes,” then life insurance is not just a financial product — it’s an act of responsibility and love.