Q & ACategory: InsuranceHow much insurance cover is enough?
Jason Wong asked 2 years ago

Hi KC, I just watched your webinar with KC Chong titled “Your 1st Life Insurance Policy”.

With the different calculations that I tried, I came up to a target sum insured amount of rm4.2 mil.

Unfortunately, my MLTA only covers the sum insured of 300k. I was wondering what can I do from here. I looked up FiLife and it would cover rm1 mil max. So that leaves me with rm3.2 mil.

How much coverage should one get to be considered enough? I estimate if I focus too much on insurance then I’m left with much less monthly savings that I could use to purchase (and pay loan installments of) investment properties.

1 Answers
KCLau Staff answered 2 years ago

Hi Jason,
Getting an MLTA or MRTA for your own-stay property is good because you want your family to keep their roof.
However, for your investment property, you don’t necessary need to cover the debt with insurance. The reason is that your heir can sell the property and get the equity in cash. Or they can continue to refinance the property and keep it.
You don’t want to over insure, and pay too much premium commitment. As you said, it reduce your investment capacity.