Death is of an unpredictable nature. But what you can control is your family’s security and well-being after you’re gone. Planning for your “death” may be overwhelming, but failing to do so will leave a harder impact on your loved ones!
Losing you will be the most tragic thing your family will ever have to face and the last thing you’d want to do is add financial stress to them. Remember, it’s never too early to start, especially when you’re married with kids!
Ready to do this? Here’s everything you can possibly do to make life easier for your loved ones after you pass away.
1. Get life insurance/takaful plans
While most of us are aware of life insurance and takaful plans, according to the Life Insurance Association of Malaysia (LIAM) 54% of Malaysians are still without life insurance coverage – that’s only over half of the country’s population! Life insurance is an essential, especially in today’s current pandemic situation. With the death benefits received from life insurance, your loved ones will be able to survive any financial needs.
From living expenses, medical bills, funeral expenses, children’s education, retirement and more. Just think of it as a replacement for your income! Now that your family’s protected by life insurance, they’ll be able to preserve their quality of life even when you’re gone. If you’re not familiar with life insurance and takaful plans, you read more here.
2. Pre-plan your funeral
Yes. We understand how planning for your funeral can be a daunting experience. But this can help liberate your loved ones fro financial burdens and emotional stress in times of grief. Funeral packages are generally costly, ranging around RM10,000 or more!
A burial plot costs an average of RM6,000, while a plot in the columbarium is more affordable at RM1,500. For private cemeterians, depending on the area could cost as high as RM90,000! This of course varies according to ethnicity and faith.
Now due to the scarcity of land and inflation, burial plots and columbarium prices could increase significantly. So, pre-planning your funeral ensures that your loved ones won’t get burdened by the cost of inflation in the future. Plus, you can also take advantage of various promotions and installment plans offered by funeral services.
3. Start your estate planning
Did you know, that when a person passes away, all of the person’s assets will be frozen? YES. This include assets such as houses, cars, stocks, artwork, life insurance, pensions and more. Hence, without a written estate plan, your assets will be distributed by the court. If you have children, the court will also assign guardianship to your children based on your state laws. Sometime, this may not have the best outcome.
That’s why estate planning is essential because it allows you to control who inherits your assets and takes care of your children, if you die. One of the most common and easiest way for you to do is by making a will! If you’re not sure how to do so, check out our beginner’s guide to Will writing in Malaysia.
4. Clear your debts ASAP
Do you have mortgages, car loans, credit card balances and more? Then you should focus on trying to clear these debts as soon as possible. If you do have debts before you die, your creditors will have the legal rights to collect the amount you still owe from your estate aka assets and liabilities. This includes repossessing your vehicle, taking ownership of your house for auction and more.
Not only that, the distribution of your estate to your loved one wouldn’t even take into effect untill all of your debts are repaid! While the debt wouldn’t be transferred to your loved one, nor will they have to settle the debt from their money – but any money or assets left behind under the deceased (you) will be used to pay off the debt.
So if there aren’t any assets left, the debt would most likely be written off. However, this rule wouldn’t be applicable if they co-signed the deceased’s loan or if they were a guarantor for the loan. You can avoid these financial complications and pay off your loans as soon as you can, so your family can have peace of mind! Check out 3 ways for you to settle your debts in Malaysia.
Now you know what you can do to ensure that your loved ones stay protected financially. This may be a heavy topic, and for some, too early to even think about. But as death is unpredictable you’d want to get a head start as early as possible.