Methodology for Calculating Life Coverage


The basic function of life insurance products is to reduce the financial pressure to the family members after the death of lives insured. The basic principle for calculate the life protection needs is to estimate the financial contribution to the family and the period of contribution, and also to consider the personal liabilities. 


Term life products can provide a higher leverage ratio on protection (sum assured ÷ premium), which helps the life insured to get the highest amount of protection with just a very low premium. 


Our suggested formulae for calculating the life protection gap is:

Family Contribution  +  Personal Liabilities  -  Current Asset and Coverage


Methodology for Calculating Critical Illness Coverage


The major function of critical illness protection insurance is to reimburse the income loss or financial loss during the period of curing the illness and rest. Therefore, we suggest the sum insured to be 2 to 3 times of life insured’s annual income. Since the medical needs of lives insured differ, clients should also reverse extra sum insured for the budget of extra medical expenses.


As some lives insured are getting older and their medical insurance costs are getting more expensive, they also choose to replace their medical insurance with a critical illness protection plan to only cover their huge medical cost when getting serious illness as they come to an old age.


Our suggested formulae for calculating the critical illness protection gap is:

Compensation During Leave  +  Budget for Extra Medical Expenses  -  Current Coverage