Here?? the honest truth. You don?? really ??eed?? insurance. Yes, you heard me right, insurance coverage is not a need, but first let’s make sure our definition of need is the same. I define need as something that you must have to continue surviving; hence our real basic needs are purely physiological, for instance food, drinks and sleep. Check out the Maslow hierarchy below.

There you go; you don?? need insurance to survive. Rather, I would say that the decision to insure one?? life or of a loved one?? is purely an act out of love (3rd level need in the Maslow hierarchy).

Let?? look at one extreme scenario: What really happens when you don?? have a single insurance policy? It merely means that upon your demise, there will be no extra ??ealth?? created from the event. That?? a pretty crude way to put it, but that?? the whole truth. It might sound like you??e buying a lottery ticket, but that?? how it works- insurance company and you, the policyholder, are constantly playing a game of chance. If you die on the first year of your policy, the Company loses big time. Otherwise, the game goes on, and the longer you??e insured, the better it is for both you and the Company.

Of course, the rules of the games are set by the Company (who underwrites your Insurance Contract) and they will do everything possible to keep their risk at the minimum, not unlike the Casino Operators. They possess the latest mortality data, employ Underwriters and Actuaries who really knows their maths and read statistics during their lunch breaks. And not forgetting that they also engage a team of very motivated sales force.

So let?? get back to the initial question: how would the act of love affect the way you choose your insurance coverage?

In the insurance industry, there?? a term called ??nsurable interest??. To illustrate this term, let?? just say everyone is considered to have an insurable interest on their own lives, the lives of their spouse and dependents. And for your extra knowledge, insurable interest for life insurance needs only to exist at the time the policy is purchased. For example, after you sack one of your employees at work, the insurance policy that you bought for that employee would still be considered valid even after he is no longer under your employment. The insurance industry seems to take the term “true love never dies” pretty seriously.

Hence the insurance policy that you should have in your risk management portfolio should ideally reflect the ??mount?? of love you have towards your ??nsurable interests??. In other words, if anything unfortunate should happen prematurely to you, the amount of money that is compensated from your insurance policies should be adequate to shield you and your loved ones from a sudden financial crisis. The compensation should also buy you and your family enough time to recover from the loss during the unfortunate crisis.

So, whenever the question of whether you really need another insurance policy, just look at how much you are already insured and determine if this figure is enough to shelter you and your loved ones from an impeding financial crisis. Your insured figure should also ??umerically?? tells you how much you really loved your ??nsurable interests??.

If you are having problems finding out how much and what type of insurance you already have, you should seek out professional advice as soon as possible.

Now that we know how much you should be insuring on yourself, in the next series, I would like to cover on the topic of Comprehensiveness of Coverage where we’ll be looking at various strategies you can employ to ensure that you not only have enough coverage but also you??e covered each aspect of your risks strategically.

• How Much Insurance Should You Buy?
• Comprehensiveness of Coverage
• Malaysia Personal Accident Coverage
• Malaysia Endowment Insurance
• Malaysia Medical & Hospitalization Insurance Explained
• Guide to Smart Insurance Planning Published!
• Malaysia Online Car Insurance Resources
• Investment-Linked Insurance Policy: An Overview- Part 1