Estimate how much life cover your family would need, and how much more you need beyond what you already have.
Extra life cover to consider
RM 1,030,000.00
RM 1,240,000.00 needed, RM 210,000.00 already in place
Extra life cover to consider: RM 1,030,000.00
Not discounted for investment returns, so it leans towards enough cover. If your home loan has MRTA or MLTA, leave that loan out of debts.
RM48,000 a year for 15 years, RM350k debts, RM150k education
With RM150k cover and RM60k savings, the gap is about RM1.03 million.
Need RM1.24 million
How the figures above are worked out — the rules, rates and reasoning behind every line.
Add up what your dependants would need: living costs until they are independent, debts to clear, education and funeral costs. Then subtract the life cover and savings already in place.
Rules of thumb like '10 times your income' ignore your debts and dependants. Working from real needs gives a figure you can defend.
If your home loan has MRTA or MLTA, that loan is already covered, so leave it out of debts.
Include employer group life cover, but remember it usually ends when you leave the job.
Review the figure when you buy a home, have a child or change jobs.
Supporting a family for many years adds up quickly. The figure is not discounted for investment returns, which keeps it on the safe side. Term life cover is usually the cheapest way to cover a large amount.
EPF goes to your nominees, so you can include it in savings if it would be available to your family.
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