Having life insurance is as important - MRTA could be one of your best choices. But before selecting your life insurance, figure out these facts before you make your decision.

Life Insurance is an insurance policy that help protects you and your family financially during certain times of hardship. It works like this - Should you pass away or suffer total and permanent disability, your family will still be financially sound at least temporarily.

There are a few reasons why you should obtain life insurance:

1. Ensure that you still have an alternative source of income should anything happen to you (illness, death, disability, etc)
2. To finance your children's education. You need a child education policy for this. (See below).
3. Savings plan for retirement stage. This could not only mean EPF, but a way of getting another steady stream of your savings after retirement.

Life insurance policies vary from usage to type:

• MRTA (Mortgage Reducing Term Assurance)
  This policy helps with the repayment of your outstanding property loan should anything happen to you.
• Investment Linked Life Insurance Policy
  Your premiums are used to fund life insurance protection and units in a fund. The benefits paid to you or your nominee will depend on the price of the units at the time you surrender the policy or when you pass away.
• Endowment Insurance Policy
  This combines protection and savings. The money will be paid at the end of a specific period upon your demise should any major life threatening event happen to you. If you are still living after the policy matures, you will get the money, otherwise, the money will be given to your nominee.
• Supplementary Rider (or Cover) Insurance Policy
  A rider is a supplement attached to the basic insurance plan, such as an endowment or whole life. It gives you flexibility to help with your personal finance such as coverage against accident, total and permanent disability or hospitalisation. You will need to pay additional premiums.
• Term Insurance Policy
  This offers insurance protection for a limited period only. The money will be paid only if you pass away or if you suffer total and permanent disability during the term of the policy.
• Life annuity Insurance Policy
• Immediate Annuity - Payments begin within 12 months after you buy the annuity. Those who are about to retire or have already retired will choose this type.
• Deferred Annuity – Payments begin 12 months after you buy the annuity (or longer). People will buy this type during their working years to provide retirement income later in their lives.

Income tax relief

You can claim tax relief on the premiums that you pay, subject to certain terms and conditions. An ordinary life insurance policy would quality for a maximum of of RM6,000/year inclusive of any contributions you've paid to an approved retirement plan (e.g. EPF/KWSP). For a medical or education policy, the tax relief is RM3,000 per year.