What Insurance/Takaful to Get If You Don’t Have a Lot of Money ?

Having comprehensive insurance/takaful coverage is high on the to-do list for every financially-responsible person. Unfortunately, the cost can be out of reach for many Malaysians squeezed by the rising cost of living and suppressed household incomes.

In this article, we will share some insurance/takaful options that you can get when you do not have a lot of money. If there is only one thing you should remember, it is that having insurance/takaful with low coverage is better than having no insurance/takaful at all.

It is okay if all you can realistically afford right now is RM10 or so per month. Do not worry about getting ALL the insurance/takaful in this list; just get one or two that comfortably fits within your budget and aim to increase your contribution to bigger coverage.

What are the available insurance/takaful products?

At a glance, the insurance/takaful options are :

• Perlindungan Tenang (life and general insurance; for B40, sole breadwinners andpeople with vulnerable dependents)
• SOCSO Self-Employment Social Security Scheme (for self-employed and gigworkers)
• MDEC’s eBerkat (various insurance; for B40 and MSMEs)
• Online Critical Illness Protection (critical illness insurance; for everyone)

Let’s go over each of them one by one, as well as what you should get, and how much itwill cost (estimates only).

#1 – Perlindungan Tenang

Products under Perlindungan Tenang fall under three categories: conventional, takaful and general. It is the option you want if you are looking for super cheap insurance,specifically designed for the B40 community. The plans cost between RM1.xx to RM2x.xxper month.Yes, from RM1-ish per month. So no excuse to not be protected, truly.Additionally, you may even be eligible to claim the RM50 Perlindungan Tenang Voucher.Check your eligibility and find out more at https://myptv.my

Which insurance/takaful scheme to get under Perlindungan Tenang?

Get these combinations:

• 1 x Life Insurance OR 1 x Family Takaful (as low as RM2 per month; more is better)
• 1 x MSIG Personal Accident (as low as RM1.15 per month; more is better)
• (Optional – if you have a wooden house) 1 x Allianz KampungKu (contact them toget a quotation)

#2 – SOCSO’s Self-Employment Social Security Scheme

(Note: SOCSO’s Self-Employment Social Security Scheme is not technically insurance, but the benefits are similar enough so that is why it is included here)

Employed folks will notice payment for PERKESO/SOCSO in your payslip (if this is not in your payslip, check with your employers). This scheme provides protection for insured persons against employment injuries including occupational diseases and accidents during work-related activities:

• Self-employment injury means personal injury to a self-employed insured person caused by an accident or an occupational disease arising out of and in the course of his or her self-employment activity including while travelling for the purpose of his or her self-employment activity.
• Occupational disease is a disease caused by or arising from any occupation specified in the Fifth Schedule of the Employees Social Security Act 1969. This scheme provides cash benefits to the insured persons and their dependants besides medical treatment, physical rehabilitation and vocational training.

Happily, you can also join this scheme if you are self-employed or working in the gigeconomy.

For a small monthly/yearly payment, you get all of these benefits in one plan:

• Medical Benefit
• Temporary Disablement Benefit
• Permanent Disablement Benefit
• Constant Attendance Allowance
• Dependant’s Benefit
• Funeral Benefit
• Education Benefit
• Facilities for physical or vocational rehabilitation

The cost of your contribution depends on your monthly earnings. The higher your insuredmonthly earning, the higher your contribution per month/year. There are four plans,ranging from a contribution of RM13.10 to RM49.40 per month.

Which plan to get under SOCSO’s Self-Employment Social Security Scheme?

Get the plan closest to your monthly earnings. The four plans are:

• RM13.10 per month for RM1,050 insured monthly earning
• RM19.40 per month for RM1,550 insured monthly earning
• RM36.90 per month for RM2,950 insured monthly earning
• RM49.40 per month for RM3,950 insured monthly earning

#3 – MDEC’s eBerkat Micro-Insurance

MDEC’s eBerkat micro-insurance options, , which are curated for B40 and MSMEs,include:

• Life insurance
• Medical insurance
• Travel insurance
• Personal accident insurance
• Car insurance
• Motorcycle insurance
• Device insurance, and more (including temporary insurance for specific situations,like cleaning insurance!)

Which plan to get under MDEC’s eBerkat?

If you are a small business owner providing online products or services, this is probablythe most affordable and flexible e-commerce insurance option you can get. Look up theirbusiness insurance options.

#4 – Online Critical Illness Protection

So far, options under #1-3 give you a wide variety of online insurance options. If you mix and match the products, you are covered for almost everything, even if the coverage issmall.

If you have some budget left over, you would want to get critical illness (CI) protection as well. This is the one that will give you a lump sum of money when you get really sick,so you can use it to pay for life’s expenses, including additional medical expenses if any.Ideally, you want it to be at between 6-10 years’ worth of living expenses.

For example, if your family spends RM2,500 per month or RM20,000 per year, then yourcritical illness sum assured should be around RM180,000-RM300,000.

CI protection is also typically very expensive. It is not uncommon for critical illnessprotection to start from RM100 per month or so, depending on variables. Prices dependon gender, age and smoking status.

It is not the perfect replacement, but you can get a cheap Critical Illness plan via two providers:
(1) FWD Takaful Big 3 Critical Illness Protection Plan (covers cancer, strokeand heart attack) or
(2) MSIG EZ Critical Care and EZ Cancer Care (covers cancer, heartattack, stroke and kidney failure).

With both plans, you are only covered for three or four critical illnesses out of the usual 36/40 critical illnesses, but those three or four make up 85-90% of criticalillness claims.

As a benchmark, these are the quotations received for a 33-year-old, female non-smoker:

• RM27.68 per month (RM100,000 sum assured) for the FWD Takaful plan, and
• RM10.96 per month (RM50,000 sum assured) for the MSIG EZ Critical Care Plan.

The downside is, of course, you would not be covered for the other illnesses. But seeingthe odds, and considering the limitation of the budget, it is not a bad decision to make.

Which plan to get for Critical Illness Protection?

Get either plan mentioned which fits into your budget.

Get yourself insured now

It is important for you to get yourself insured now and not wait until you can afford theperfect, comprehensive insurance/takaful products. The ironic thing about insurance andtakaful is the more you cannot afford it, the more important it becomes.

Not only a low-income earner would not be able to afford a huge medical bill if they getinto an accident or develop illnesses, they also tend to be exposed to more risks in theirdaily life. For example, it is well-known that the accident rate for motorcycle users is muchhigher than for car users.

On a final note, do not forget to take advantage of the Perlindungan Tenang RM50voucher if you are eligible for it. The money is already allocated for you; all you have todo is to claim it.

This article is contributed by Suraya Zainudin—writer, speaker and digital marketer forone of Malaysia's top personal finance websites.

The opinions expressed in this article are those of the author and do not necessarilyreflect the views of the Credit Counselling and Debt Management Agency (AKPK).