We all know what insurance is for and why it’s vital to have one. In spite of that, not everyone has an insurance policy as they might just want to rely on their savings for rainy days. Paying monthly premiums might seem like a hassle for some.

However, there are reasons why having a long-term insurance plan is better than depositing money into your bank account every month. On that note, here are 4 good reasons to sign up for a solid insurance plan.

1. Unexpected commitments/incidents

Regardless of how prepared you are to face changes in life, things can happen unexpectedly and catch you unawares. Unfortunate things such as illnesses or accidents can happen and you’ll need to have enough finances to tide you through until things are better.

Negative incidences aside, you might also end up with commitments like marriage, having children, starting your own business and so on. Even for these things, you need to have enough as a buffer to ensure you’re financially stable.

Related: 5 Types Of Insurance You Need But May Not Have

2. Works as a retirement plan

If you’re in your 30s or 40s, you might not be thinking of your retirement for now. But the fact is even if you’re still not there yet, you should already be planning towards it. 

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The most popular type of retirement fund is the Employees Provident Fund, which comprises monthly contributions made from your salary. By the time you retire, you should have a pretty good amount of savings. However, this isn’t always the case.

With rising living expenses and expensive healthcare, what you have in your EPF account may not last very long. As a matter of fact, a recent NST article stated that half of EPF members have less than RM10,000 in their accounts. 

Related: 4 Benefits You Can Get If You Save Your EPF Money

To bolster yourself against financial hardship in your senior years, you can opt for a retirement insurance plan. Usually, these plans come with investment returns as well, so you should be well-covered.

3. Healthcare isn’t cheap

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Image credit: The Centre

Let’s come back to the topic of sudden ailments. Like we mentioned earlier, healthcare (in specific, private healthcare) can be really expensive. What’s worse is that it’s only getting more and more costly with time. According to Prudential Malaysia, medical inflation in the country increases by 10-15% each year. This is way, way higher than general inflation that increases by 2-3% each year.

A report by the Ministry of Health in 2018 showed that the prevalence of non-communicable (non-infectious) diseases has also been increasing. Having a comprehensive medical insurance policy will put your mind at ease as it can at least take care of the major costs.

4. Some of them are mandatory

Ultimately, whether or not you want to get insurance is still your choice. However, there are some policies that are compulsory for you to have.

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Image credit: The Star

Firstly, it’s a must for house owners to have fire insurance. This type of insurance will cover damages that are caused by fires, explosions and lightning. In some cases, your policy can also compensate for damages caused by water tanks, leaky pipes, and so on.Besides that, if you own a car, you have to have motor insurance. Without it, you won’t be able to renew your yearly road tax. It’s also important for you to have a comprehensive policy, so that you can get coverage for damages caused by both yourself and third parties. 

Related: Unlike Some Leeway For Road Tax, You Must Have A Valid Car Insurance During The MCO

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