Monday, August 18, 2014

Why Many Malaysian Are Still Without Insurance Policy @ Uninsured?

How many of us have more than one insurance policy? I think not many. In fact, there are many Malaysian who is currently without any insurance coverage. This is a very sad situation.

I think, among the reasons why there are many uninsured Malaysian is because of low financial literacy. Because they are not aware of the importance of insurance in their financial planning, so, insurance is always not in their list. Until something such as a serious health problem or an accident happened to a family member or a friend, then they realised the importance of getting an insurance policy. An improved financial literacy will be able to guide these people to get insurance policy as early as possible, not to wait till something happened, which by that time, it might be a little bit too late.

The second reason I can think of is inadequate fund. Life as an average Malaysian can be quite tough (financially). After taking care of the housing loan, car loan, monthly utilities bills, daily necessities and other basic needs, most of the time, not much money left. So, insurance is always left behind. By right, they have to reallocate their budget or spending plan. Try to adjust somewhere so that they can squeeze in a basic policy especially for the bread earner of the family.

The third reason why many Malaysian are still uninsured is bad experience with insurance agent. My own brother had a bad experience with his previous insurance agent. He was told that he only need to pay his  insurance premium for a number of years, and then his policy will be active and he will be protected. Many years later, he found out his cash value is not sufficient to cover for his monthly premium anymore. He was quite angry and try to contact his insurance agent. But he was informed the agent is no longer an active agent. I told my brother that partial of the problem come from him because he didn't try to understand the policy that he signed, and he rely too much on the insurance agent. The other part of the problem is because of unreliable insurance agent providing misleading information. In short, these insurance agents are only interested to close the sale and thinking of their monthly commission.

The last reason which I can think of is also related to insurance agent. Some of the insurance agents are not proposing the policy according to the needs of their clients but instead based on their own needs, resulting the clients cannot afford to sign for a policy. Some may wish to get a policy but not able to pay the high monthly premium. A good insurance agent will try to understand his clients situation and needs before submit his proposals. He should propose a policy with the lowest premium but highest protection. I believe there's always a good policy which is suitable for each person accordingly to his age, lifestyle and his financial needs. So, try to get a good and reliable insurance agent.

Note: At the time of writing, I am not an insurance agent. I just feel that I need to share my views and hopefully I can open the minds of those who has not been insured, to start gathering more information about different policy and try to get an insurance coverage for themselves and for their families. Also, I hope that there will be more professional and reliable insurance agents out there to better serve all Malaysians.

photo credit: h.koppdelaney via photopin cc

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