Why Insurance Alone Is Not Enough: The Missing Piece in Financial Protection

In the upcoming weeks, we will explore how will writing can complement insurance and help clients achieve a comprehensive financial plan. Today, we begin with the first part of this series, focusing on why insurance alone is not enough and how a will bridges the gap in financial protection.

1. Life Insurance vs. Estate Planning: Understanding the Gap

Most policyholders assume that having life insurance means their loved ones will immediately receive the funds upon their passing. However, this is not always the case. Here’s why:

A. Insurance Payouts Do Not Dictate Asset Distribution

Life insurance provides a lump sum payment to the nominee(s), but it does not cover the distribution of other assets such as property, savings, or investments. A will ensures that all assets, including insurance payouts, are legally assigned to the intended beneficiaries.

B. What Happens If a Policyholder Dies Without a Named Beneficiary?

If you don’t name anyone or any organization as your beneficiary in your insurance policy, then the money will go to Bank Negara Malaysia (BNM) first. It will remain there as unclaimed money until someone comes forward to claim it.

If your family decides to claim the insurance money, they will need to provide documentation as proof. Typically, they will be asked to submit:

  • Proof of identities
  • Proof of relationship
  • Death certificate
  • A formal letter or memo stating the claim request
  • Other supporting documents if required

If no named beneficiaries exist, the payout will go to the next-of-kin, and the funds will be divided among them. If the policyholder was married with children, the money will be distributed according to Malaysia’s Distribution Act 1958.

Below is a table detailing how next-of-kin will receive the estate:

Distribution Act 1958 for West Malaysia and Sarawak

For those in Sabah, the Intestate Succession Ordinance 1968 applies instead, following a different set of rules for distribution.

C. Case Study: A Real-Life Example

Imagine a client who passed away without naming a beneficiary on their RM1 million insurance policy. Upon his passing:

  • The insurance payout went to Bank Negara Malaysia.
  • His spouse and parents argued over the rightful claim.
  • Due to a lack of clear legal instructions (Written Will), the court had to intervene, causing years of delay.
  • His spouse, who needed the funds for household expenses, had to endure a long legal battle before receiving any money.

Had the deceased written a Will, his intentions would have been legally documented, and his spouse could have received the payout without complications.

2. How Will Writing Complements Insurance Protection

As an insurance agent, your goal is to provide holistic financial security for your clients. By integrating Will Writing services into your offerings, you help clients protect their wealth beyond just life insurance.

A. Ensures Payouts Reach the Right Beneficiaries

A Will explicitly states who gets what, preventing family disputes and legal uncertainties. This is especially important when dealing with blended families, unmarried couples, or multiple dependents.

B. Prevents Delays in Insurance Payouts

When a Will is in place, it provides clear instructions, making the claims process smoother and faster. Beneficiaries can access the funds without unnecessary legal roadblocks.

C. Provides Complete Financial Planning

Clients rely on their insurance agents for financial security. Offering Will Writing services positions you as a trusted advisor who provides a complete solution, not just a policy.

3. How Insurance Agents Can Offer Will Writing Services with DWS2U

Many insurance agents hesitate to offer estate planning because they lack legal expertise. This is where DWS2U’s Online Will Writing System comes in:

A. Simple, Digital, and Efficient

  • No legal background required—DWS2U’s platform guides clients through the step-by-step Will Creation process.
  • Online, secure, and compliant with Malaysian legal standards.
  • Agents can offer will writing as an add-on service, enhancing their value to clients.

B. Helps Agents Build Stronger Client Relationships

By introducing clients to Will Writing, you show that you genuinely care about their long-term financial well-being, leading to higher trust and retention rates.

C. Additional Revenue Stream for Agents

Offering Will Writing through DWS2U allows agents to earn commissions while helping clients with their legacy planning needs.

Conclusion: The Future of Financial Planning Is Comprehensive

Insurance is a crucial component of financial security, but it is not the final step. Without a will, even the best insurance policies can face legal challenges, delays, and unintended distributions. As an insurance agent, offering Will Writing services through DWS2U ensures that your clients receive complete financial protection.

What’s Next?

In our next article, we will explore how insurance agents can use Will Writing to strengthen client trust and retention. Stay tuned for Part 2 of this series!

Call to Action

🚀 Join DWS2U today and start offering Will Writing services to your clients! Provide holistic financial planning and set yourself apart from other insurance agents. WhatsApp us at +6012-206 7931 to learn more!

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