The Myths of Insurance: Separating Fact from Fiction for Malaysians

Insurance is a crucial part of financial planning and risk management as much as cashflow and investments, but it often remains shrouded in myths and misconceptions, especially in the Malaysian context. To make informed decisions about insurance, it’s essential to debunk these myths and understand the realities. In this blog, we will uncover the truths behind the myths of insurance for Malaysians.

Myth 1: Insurance Is Only for the Wealthy

One common myth in Malaysia is that insurance is an exclusive privilege for the wealthy. In reality, insurance is accessible and essential for individuals from all income levels. Insurance policies come in various forms and sizes, allowing you to choose coverage that suits your financial capacity and needs. Whether you’re a student, a young professional, or a family breadwinner, there are insurance options available to protect you and your loved ones.

Myth 2: Insurance Is a Waste of Money

Some Malaysians perceive insurance as a waste of money because they may not see immediate benefits. However, insurance is an essential safety net that provides financial security in times of need. Whether it’s health insurance, life insurance, or car insurance, these policies protect you from unexpected expenses, such as medical bills, funeral costs, or car repairs. While it may seem like a financial outlay in the short term, insurance can save you from significant financial burden in the long run.

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Myth 3 : Insurance – the More the Better

The other side of the spectrum may feel that owning 20 policies makes you invincible. However without proper clarity and understanding of your policies and objective of each, you may be throwing your money into the sea, especially when you need them.

Owning insurance should be objective based, and having a dedicated agent to do a financial health check regularly would be beneficial for you on the long run.

Myth 4: Company – Provided Insurance Is Sufficient

Some MNCs companies offers huge amount of coverage for their employees, many professionals may decide that they can just rely on them on the long run. However, it is advisable to have your own insurance policies at a young age before your health deteriorates, which is likely due to work. You may or may not work for the company your whole life, even if you do, who’s to say that they will not remove the Insurance privileges due to budget cuts. In fact, if you’re unlucky and fell critically ill, after 12 months, the company may have the rights to terminate your employment (check your appointment letter or employee handbook). Your company-provided insurance should be seen as a bonus instead.

Myth 5: Insurance Agents Are Just Salespeople

Insurance agents play a crucial role in helping you choose the right insurance policies. While they earn commissions for selling insurance, their primary responsibility is to assess your needs and match you with the most suitable coverage. A reputable agent will provide guidance, answer your questions, and ensure you understand the terms and conditions of your policy. It’s important to work with an agent you trust and who is committed to your financial well-being.

Myth 6: Insurance Is Only for Older People

Young Malaysians often believe that insurance is something they can consider later in life. However, purchasing insurance when you’re young and healthy often comes with lower premiums. Moreover,

it allows you to build a financial safety net early,

ensuring that you and your loved ones are protected in the event of unforeseen events.


Insurance is a vital component of financial planning that provides protection and peace of mind to Malaysians of all backgrounds. To make informed decisions about insurance, it’s crucial to separate fact from fiction and dispel the myths that surround this topic. Insurance is accessible, offers various benefits beyond death coverage, and can be tailored to your needs and budget. By understanding the true value of insurance, you can make informed choices that safeguard your financial future.