Reader’s Q&A via web message (edited for clarity & anonymity): I am migrating overseas & would like to ensure I have life insurance although I will be on a limited budget? I currently have an existing policy. I estimate I will need coverage for 2 years before I obtain PR. Can I withdraw from EPF or are there any other suggestions? Please advise, thanks! ~Miss V

australia-migration

Dear  Miss V,

Thank you for your query. It would definitely be important to ensure you are securely covered during your migration process.

EPF Withdrawal for Leaving Country

As a Malaysian, for EPF withdrawal, you would need to submit Letter of Renunciation of Citizenship (Form K / Form Y) & other documents. This may not be a viable option until you receive your PR.
More info:
Your exsting insurance policy is an investment-linked plan (ILP) with a cash value.
You/your agent can check from your insurance provider to confirm the cash value.
moving
There are 2 options to ensure you are sufficient covered:
Option 1: Lower Coverage & Costs; Take Premium Holiday
  • Reduce your coverage (possibly reduce critical illness coverage, medical plan coverage, or other unnecessary riders)
  • Check how much this will reduce your monthly payment but estimated it will be reduced to minimum 1200/year (100/mth)
  • Check how long the policy will sustain with a premium holiday (you no longer make monthly payments but is deducted from your cash value instead)
 
Option 2: Opt for Budget-specific Term Coverage
  • As you are in Malaysia in the 2 years, it is important to have medical coverage.
  • Term medical coverage is affordable when young from 500/yr
  • Term life coverage is also affordable with 100k basic sum assured (Life/TPD) from 400/yr
  • Another alternative to term life coverage is to take Personal Accident coverage instead. However, a PA provides only limited coverage of death, disability, medical, funeral, etc) from accidents but at lower costs (50k coverage for 110/yr; 100k coverage for 168/yr)
Recommendation
Check up the cash value in your existing life insurance plan.
If reducing your costs and/or taking a premium holiday works within your budget then go with Option 1.
Else to ensure you you are protected & at low-cost, you can take a term medical coverage & term life coverage (Option 2). This is as you only need the coverage for this time frame (~2years) before you migrate & your medical would be covered under Australia’s healthcare system. You can still consider whether to continue on the term life policy or obtain a new life insurance policy.
Thank you & warmest regards.
Stev