Life insurance is a contract between an insurer and a policyholder in that the insurer guarantees payment of a death benefit to named beneficiaries when the insured dies. The insurance company promises a death benefit in exchange for premiums paid by the policyholder.

Types of Life Insurance

Several kinds of Life Insurance are available to match all kinds of requirements and preferences –

1. Term Life – Term life insurance lasts a particular number of years, then ends. You opt the term when you take out the policy. Usual terms are 10, 20, or 30 years.
2. Level Term – The premiums are the same every year.
3. Increasing Term – The premiums are lower when you’re younger and increase as you get older. This is also called “yearly renewable term.”
4. Permanent – This stay in force for the insured’s entire life unless the policyholder stops paying the premiums or surrenders the policy. It’s generally more expensive than term.
5. Single Premium – In this case the policyholder pays the entire premium up front rather than making monthly, quarterly, or annual payments.
6. Whole Life – Whole life insurance is a kind of permanent life insurance which accumulates cash value.
7. Universal Life – A kind of permanent life insurance with a cash value component which earns interest, universal life insurance has premiums which are comparable to term life insurance. Unlike term and whole life, the premiums and death benefit can be adjusted over time.
8. Guaranteed Universal – This is a kind of universal life insurance which does not build cash value and generally has lower premiums compared to whole life.
9. Variable Universal – With variable universal life insurance, the policyholder is permitted to invest the policy’s cash value.
10. Indexed Universal – This is a kind of universal life insurance which lets the policyholder earn a fixed or equity-indexed rate of return on the cash value component.
11. Burial or Final Expense – This is a kind of permanent life insurance which has a small death benefit. Irrespective of the names, beneficiaries can use the death benefit as they wish.
12. Guaranteed Issue – A kind of permanent life insurance accessible to people with medical issues that would otherwise make them uninsurable, guaranteed issue life insurance will not pay a death benefit during the first two years the policy is in force (unless the death is accidental) owing to the high risk of insuring the person. Although, the insurer will return the policy premiums plus interest to the beneficiaries if the insured dies during that period.

Benefits of Life Insurance

Life insurance is curated to reduce the effect of the financial loss a family may incur upon any family member’s demise. The benefits of such plans are fourfold, precisely resonating within the acronym “LIFE” –

1. Liability Free

Life insurance provides your family the authority to be independent and self-reliant. A good term plan can aid them repay financial liabilities such as home loan, auto loan, personal loan, or a loan on credit card. The term plan can also cover hospitalisation charges and critical illness treatment, offering you an extensive security package.

2. Income Replacement

If you are the only provider in your family, a life insurance plan becomes can offer a guaranteed income to your family every month, ensuring that their everyday life is not affected and they remain financially sound.

3. Education and Related Expenses for Minors

The pay outs from life insurance can aid to pay the bills for the education of your children or medical expenses, if any.

4. Immediate Expenses after Demise

It will also benefit your family in covering a part of important expenses immediately after your demise, like funeral costs and/or medical bills.

Need for Life Insurance

The significance of having a life insurance is to attain the “peace of mind” that it leads to. Although, having a sufficient amount of life insurance impactfully eases your mind off some essential questions such as:

• What will happen to my family financially after I die?
• How will my wife and kids manage their living expenses after my demise?
• How will I provide for my family in case I lose my job after an accident?
• How do I ensure that I am able to fund my child’s higher education?
• How do I ensure an income after my retirement?

Labuan Life Insurance License

A Labuan life insurance business is determined as an insurance business connected with any policy by which payment of policy money is insured on death or on the happening of any contingency dependent on the termination or continuation of human life and includes any incidental extension of cover and reinsurance of such business.

QX Trust provides the following services to set up your Labuan Life Insurance license:

• Profiling and the necessary preparation for the Labuan Life Insurance license
• Recommend and appointment of the Labuan Insurance Manager / Underwriter
• Submission to Labuan FSA and supervision of application process until approval
• Once license is approved, incorporate the Labuan Company or Protected Cell Company
• Operations office setup, bank account for capital injection and recruitment of staff to meet the license requirements
• Application and registration for the membership with the Labuan International Insurance Association
• Assist with the annual compliance for Labuan FSA and Inland Revenue Board
• Act as liaison and key contact person for both client and Labuan FSA on all correspondences, meetings and / or interviews (if any)

To know more about Labuan Life Insurance License, contact QX Trust consultants at +60 3 9212 6940 or consultant@qx-trust.com.