Life Insurance in Malaysia – A Beginner’s Guide

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When it comes to life insurance, getting a plan based on the insurance-agent-who’s-a-friend-of-my-brother’s conviction is not good enough. It is important that you do your own research before embarking on a plan; after all, your family’s future, and yours, is at stake. Here at, we will provide you with all you need to know about life insurance: the basics, the good, and the bad. 

What Is Life Insurance?

There are so many types of insurance and protections available in the market such as business, property, health, vehicle, burial, and then of course there’s life insurance.

Life insurance is a contract between a policy owner (you) and the insurer where the insurer (insurance company) will pay a specific amount of money to the beneficiaries (the individual that will receive the money: could be your spouse, children etc) if death or terminal or critical illness occurs to the policy owner.

How Does It Work?

The most basic process for life insurance is this:  The policy owner will pay the arranged amount at regular intervals or in lump sums (both are known as premiums) into a fund managed by the insurance company. In return, when the policy owner suffers a hardship or death, the insurer will give a pre-determined sum of money to the policy owner’s beneficiaries.


Maisarah (policy owner) bought a life insurance plan from the Pro-Life Company (insurer) to ensure that her children (beneficiaries) will be taken care of  in the event of her death or critical illness. Maisarah has to pay RM 200 per annum (premium) for her insurance plan for the next ten years (term). If she happens to die or be struck with a critical illness within those ten years, her children will receive RM 120,000 from the insurer.

Aside from ensuring protection, life insurance can also be used as an investment portfolio, and also as a retirement fund.

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