Critical Illness Insurance (II)

Based on the last topic written on Critical Illness Insurance, normally there are 36 critical illness covered by the insurance company. However, you still have to refer to the policy contract on the actual critical illness coverage for you, terms and conditions applied based on written in the policy contract.

Normally, the plan will cover after 60 days from the Commencement Date of the Contract or the date after revival of Benefits, if any or date after endorsement of the additional critical illness Benefits.

The list of critical illness which being covered by the Insurance Company, please refer to the Policy Contract for the actual coverage:

1.    Heart attack

2.    Multiple Sclerosis

3.    Major Organ Transplant

4.    Paralysis

5.    Kidney Failure

6.    Cancer

7.    Stroke

8.    Coronary Artery Disease

9.    Loss of Speech

10. Deafness

11. Alzhemeir Disease

12. Surgery to the aorta

13. Heart Valve Replacement

14. Blindness

15. Coma

16. Primary Pulmonary Arterial Hypertension

17. Fulminant Viral Hepatitis

18. Major Burns

19. Terminal illness

20. Aids Due to Blood Transfusion

21. Motor Neurone Disease

22. Parkinson’s Disease

23. Chronic Liver Disease

24. Chronic Lung Disease

25. Aplastic Anaemia

26. Muscular Dystrophy

27. Poliomyelitis

28. Bacterial Meningitis

29. Benign Brain Tumor

30. Encephalitis

31. Full Blown Aid

32. Other Serious Coronary Artery Disease

33. Brain Surgery

34. Apallic Syndrome

35. Major Head Trauma

36. Loss of Limbs

Critical Illness Insurance

Are you aware that Cervic Cancer is a number two dread disease killer in Malaysia.

Second question...do you know that Life Insurance Companies offer critical illness insurance coverage either as a stand alone Plan or as a rider attached to the Basic Plan.

The purpose of the critical illness insurance is to cover the major medical expenses related for terminally ill people.

Normally, the critical illness coverage will cover for 36 types of dread diseases.

Policy Contract & Endorsement Page

It is important for you to know that once you buy an insurance policy, you will receive your Policy Contract.

The details of the insurance policy are included in the Policy Contract such as Insurance Plan and the premium amount, personal details, payment details, provisions and so on.

It is your obligation to ensure that the Policy Contract is being kept in a safe place because it is the key to the future financial protection of yourself and your family.

If you lost the Policy Contract or it is damaged due to flood, fire and etc, you can request for a duplicate copy of the Policy Contract from the insurance company. You have to complete a Duplicate Policy Contract Form and the insurance company will charge you a minimum amount for the cost of issuing a new duplicate policy contract.

In the event that you have request changes to your policy such as change mode of payment from Monthly to Annual where there is a change of premium amount and frequency of payment, the insurance company will send you a copy of Endorsement Page where you should compile together with the Policy Contract.

If you do not receive your Policy Contract or the Endorsement Page for any changes done to your Insurance policy, you can refer to your servicing agent or directly contact the Customer Service Center of the Insurance Company.

Job Opportunity! – Part ii

The Insurance Company also offers the job opportunity as permanent staff!

Basically, the Insurance Company needs:

1. Actuary for Acturial Department
2. Various positions for Policy Services Department
3. Various positions for Claims Department
4. Various positions for New Business Department
5. Various positions for Policy Issuance Department
6. Various positions for IT Department
7. Various positions for Agency Department
8. Various positions for Branch Services Department
9. And other Departments such as Marketing Department, Product Creation Department etc

It depends on the organizational structure approved by the management of the Insurance company which to cater the achievement of the company Visions and Goals.

With the awareness of the customers on the need of Insurance in their life, this industry is growing bigger.

Buying Insurance

Buying insurance for your family and you is a life commitment. It is not something that you pay today and the policy itself will continue given the protection to your family and you.

You have to pay the premium due on regular basis. The Insurance Company will give you:
1. Policy Contract which all the details stated inside it in Policy Information Page:
i. Policy No
ii. Age next Birthday
iii. Sum Insured
iv. Policy Owner Name
v. Life Insured Name
vi. IC Number
vii. Payment Mode which you have to pay on regular basis except for Single Premium Policy. It can be Annually, Semi Annual, Quarterly or Monthly based on your option which you have to remit the payment of premium until Maturity
viii. Policy Commencement Date
ix. Policy Maturity Date
x. Details of basic Plan and Riders on the Premium and Sum Cover
xi. Copy of Application form which duly completed, signed and witness

2. Definition Page

3. General Provisions

4. Premium Provisions
Please take note on this section because it is related to the premium payment for the policy. You should make the make regardless you received the Reminder Notice from the company on the premium due because the Notices or Letters send by the Insurance Company is a value added services.
It is your responsibility to make a payment within 30 days from the Next Due Date of the policy as stated in Policy Information Page regardless you received any notification or not.
That is a reason why I said that buying Life Insurance policy is a life time commitment.

5. Non Forfeiture Provisions

6. Other Provisions which related to the Policy.
Please refer to your Policy Contract. If you are not sure on the status of the Provisions attached, please refer to your servicing agent or call the Customer Service of the Life Insurance Company.

It is an intangible asset which you cannot see or touch… except that you have the Policy Contract where all the terms and conditions of the policy stated inside it. You have to keep the Policy Contract in the safest place until maturity of policy.

Life Insurance Policy help you for saving, protection for your family during tragedy, retirement benefit planning, to cover for your medical cost and so on.

You will not realised the importance of Insurance until you face the difficult time in your family!
Make a wise decision now for your loved ones and you for future protection!

Cash Value of a Policy

What is Cash Value of a Policy?

Every policy bought by the customer, it will have Cash Value except for term insurance. Cash Value availability for every policy depends on the product features design by the insurance policy. It can have Cash Value after a year, two (2) years or three (3) years.

The Cash Value will be used in the event:

1.    If the policy’s premium has not been paid after 30 days grace period. The cash value will be used to cover for the premium due until it is fully exhausted

2.    The existing cash value, if any, will be paid to the customer if the customer request for surrender of policy

3.    Cash Value will be paid, if any, during the maturity period of the policy

Cancellation of Policy

Do you know that you have to right to cancel Life Insurance Policy that you have bought from the insurance company if you do not agree with the term and conditions?

According to Section 148 Objection of Life Policy (Insurance Act 1996)

148.   (1)   A policy owner, within fifteen days after the delivery of a life policy of any description to him or to a person who resides at his residence, may return the life policy to the licensed life insurer and it shall immediately refund any premium which has been paid in respect of the policy and the life policy shall be cancelled subject only to the deduction of expenses incurred for the medical examination of the life insured.

What you need to do is to write a simple letter requesting for cancelation of policy to the life insurance company together with the Policy Contract within 15 days after the you get the policy contract.

Please check with your servicing agent on the procedure for cancelation and the refund process. You also can directly contact the Insurance company contact center for any clarification.

Do the right decision before buying the insurance policy!

Definition of Life Policy According to Insurance Act 1996

Just want to share on the Life Policy definition based on the Insurance Act 1996. Hopefully, it will help to have a better understanding on the Life Insurance Policy.

According to Section 2:

A life policy is a policy by which payment of policy moneys is insured on death or survival, and

i)                    Includes extensions of cover for personal accident, disease or sickness

ii)                   Annuity

and excludes personal accident policy.

You can refer to Insurance Act 1996 for more guidelines on the insurance policy.

Payment of Premium for Insurance Coverage

Once the customer buy an insurance policy, he has to pay the premium amount on regular basis depending on the payment mode chosen by him. The available payment mode are:

1.    Single Premium – it is a lump sum premium payment for the whole short term coverage given and it is one time payment for the policy

2.    Annually

3.    Semi Annual

4.    Quarterly

5.    Monthly

To ensure the policy is in force which the coverage is given to the Life Insured, the customer has to remit the premium payment within 30 days grace period from the Next Due Date of the Policy. For example, if the Next Due Date of the Policy is on 01/01/2012, the customer can make the premium payment with 30 days from 01/01/2012. If the customer does not remit the payment within the grace period given, there are two (2) scenarios can happen:

1.    If the policy does not have the Cash Value, the policy status will be changed to lapse status. Once the policy status is lapse, there will be no coverage given to the customer.

2.    If the policy has the Cash Value, the Cash Value will be used to cover for the outstanding premium and will be used until it is fully exhausted. Once the Cash Value fully exhausted, then only the policy status will be changed to lapse. There will be no coverage given to the customer.

There are few payment method which available to the customer to make premium payment to the insurance company:

1.    Auto Debit

2.    Credit Card

3.    Internet Banking

4.    FPX

5.    Salary Deduction

6.    Biro Perkhidmatan Angkasa

7.    Standing Instruction

8.    Cash

9.    Cheque

You have to check and get the advice from the insurance company where you buy your policy on the availability of Payment Method Facility and the best payment method for your policy, so that, it will ensure the policy is in force all the time until maturity or expiry date.

Takaful and Conventional Terminology

The terminology used for Takaful and Conventional are difference. We have to use the correct terminology because it will reflect either it is a Takaful Certificate or an Insurance Policy.

There is few basics terminology which being used in daily insurance business:

No	Conventional	Takaful
1	Policy	Certificate
2	Policy Contract	Takaful Certificate
3	Policy Information Page	Takaful Schedule
4	Premium	Contribution
5	Single Premium	Single Contribution
6	Life Insured	Participant
7	Policy Owner	Certificate Owner
8	Insurance Charges	Wakalah/ Mudharabah Fee*
9	Insurance Risk Premium	Tabarru’ Amount
10	Sum Insured	Sum Covered
11	Investment Account	Participant Account
12	Risk Fund	Tabarru’ Fund
13	Cooling Off Period	Khiyyar
14	Insurance Agent	Wakil Takaful

This terminology must be correctly for Takaful and Insurance.

·         It depends on the insurance company either practising Wakalah or Mudharabah Fee concept

Name the Nominee(s) For Your Insurance.

Once again I ask you, why do you want to buy an insurance policy? Of course, it is for your life protection and to provide financial security to your loved ones if anything happen to you. It can be your spouse, your children, your mother, your father and so on.

 To ensure that the rightful person/ persons received the proceed of your insurance coverage money, in the event anything happen to you. You have to make a nomination to your policy!

What is nomination for an insurance policy?

In a simple layman words, the meaning for insurance’s nomination à It is a person/ persons who you really want to give your insurance coverage money, if anything happen to you.

Based on Insurance Act 1996 – Part XIII Payment of Policy Moneys under a Life Policy or Personal Accident Policy under Section 163 – Power to make nomination

(1) A policy owner who has attained the age of eighteen years may nominate a natural person to receive policy moneys payable upon his death under the policy by notifying the licensed insurer in writing the name, date of birth, identity card number or birth certificate number and address of the nominee-

(a) when the policy is issued, or
(b) after the policy has been issued, together with the policy for the licensed insurer's endorsement of the nomination on the policy.

(2) A nomination made under subsection (1) shall be witnessed by a person of sound mind who has attained the age of eighteen years and who is not a nominee named under that subsection.

(3) The licensed insurer -

(a) shall prominently display in the nomination form that the policy owner has to assign the policy benefits to his nominee if his intention is for his nominee, other than his spouse, child or parent, to receive the policy benefits beneficially and not as an executor;
(b) shall record the nomination and the particulars of the nominee in its register of policies; and
(c) shall return the policy to the policy owner after endorsing the nomination on the policy or by issuing an endorsement to the original policy by registered mail to the policy owner and the nomination shall take effect from the date the nomination is registered by the licensed insurer.

(4) A failure to comply with subsection (3) shall not affect the validity of the nomination if it is otherwise proved that the nomination was made by the policy owner and given to the licensed insurer.
(5) A nomination made under subsection (1) may be in favour of one person or several persons and where there is more than one person nominated, the policy owner may direct that specified shares be paid to the persons nominated and in the absence of direction by the policy owner, the licensed insurer shall pay the persons in equal shares.

Section 166. Trustee of policy moneys.


(1) A nomination by a policy owner, other than a Muslim policy owner, shall create a trust in favour of the nominee of the policy moneys payable upon the death of the policy owner, if-

(a) the nominee is his spouse or child; or
(b) where there is no spouse or child living at the time of nomination, the nominee is his parent.

(2) Notwithstanding any written law to the contrary, a payment under subsection (1) shall not form part of the estate of the deceased policy owner or be subject to his debts.
(3) The policy owner, by the policy, or by a notice in writing to the licensed insurer, may appoint trustees of the policy moneys and where there is no trustee-

(a) the nominee who is competent to contract; or
(b) where the nominee is incompetent to contract, the parent of the incompetent nominee and where there is no surviving parent, the Public Trustee,

shall be the trustee of the policy moneys and the receipt of a trustee shall be a discharge to the licensed insurer for all liability in respect of the policy moneys paid to the trustee.
(4) A policy owner shall not deal with a policy to which subsection (1) applies by revoking a nomination under the policy, by varying or surrendering the policy, or by assigning or pledging the policy as security, without the written consent of the trustee.
(5) Nothing in this section shall prejudice a creditor of a policy owner from applying to the court for a declaration that this section, wholly or partly, is inapplicable to any particular policy on the ground that the premiums under that policy were paid to defraud the creditor.

Section 167 Nominee Other Than a Nominee under Subsection 166 (1)

(1) A nominee, other than a nominee under subsection 166(1), shall receive the policy moneys payable nominee on the death of the policy owners as an executor and not under solely as a beneficiary and any payment to the nominee shall form part of the estate of the deceased policy owner and be subject to his debts and the licensed insurer shall be discharged from liability in respect of the policy moneys paid.

(2) Subsection (1) applies to a nominee of a muslim policy owner who, on receipt of the policy moneys, shall distribute the policy moneys in accordance with Islamic law.

Section 168 Assigned or Pledged Policy Moneys

(1) Notwithstanding a nomination under section163 or the creation of a trust under subsection 166(1), where the policy moneys, wholly or partly, have been pledged as security or assigned to a person, the claim of the person entitled under the security or the assistance shall have priority over the claim of the nominee and subject to the rights under the security or the assignment being preserved, the license insurer shall pay the balance of the policy moneys to the nominee.

(2) Where more than one person are entitled under the security or the assignment, the respective rights of the persons entitled under the security or the assignment shall be in the order of priority of the date on which the security or the assignment was created, both security and assignment being treated as one class for this purpose.

For further details of nomination, you can refer to Insurance Act 1996 by Bank Negara Malaysia.

The nomination can be made during the time you purchase the policy. You can check with the insurance agent which sold the policy to you on how to do the nomination. Normally, the nomination form will be attached together with the proposal form.

You also can make the nomination during the duration of the policy. You also have the option to change the nomination made previously by submitting a new nomination form duly completed, signed and witnessed to the insurance company. The endorsement page will be given to you and you should keep together with the Policy Contract which you received during the time you buy the policy.

So, don’t forget to do the nomination once you buy your policy. It will make your life and your loved ones easier if anything happen to you at later stage.

Job Opportunity!

Do you know that the insurance industry offer you a job opportunity as the Insurance Agent. You can be an insurance agent to earn your living.
There are few advantages as an insurance agent:

1. You can choose either to become a full time agent or part time agent
2. You can decide how much you want to earn every month. It is your own effort to earn RM 5000.00, RM10,000.00 a month!
You decide how much you want to earn!
3. Flexi working hours
4. Training and guidance will be given by the insurance company
5. If you achieve certain target, the insurance company will reward you. Normally, trip to overseas

Before you become an agent, you have to take an examination:

1. If you want to be Conventional Life Insurance Agent – you have to take Pre-Contract Examination For Insurance Agents (PCEIA)
2. If you want to be Wakil Takaful – you have to take Takaful Basic Examination (TBE)
3. If you wan to do Investment Linked Business – you have to take Certificate Examination in Investment-Linked Life Insurance (CEILLI)

Once you decide to be an insurance agent, you have to choose which is the best Insurance Company based on your research in term of the company background, selection of Insurance or Takaful products available etc.

Malaysian Insurance Institute (MII) is the organization which handled the examination. They will announce the schedule and the location available for the examination. You can get the information from the Insurance Company which you has choose to be the life insurance agent or go to MII website, so that, you can check the details of fee amount, etc.

The payment fee for the examination can be paid via cash or credit card for walk in registration, money order, postal order or bank draft which should be payable to The Malaysian Insurance Institute

The minimum requirement to be an insurance agent:
1. PCEIA – SPM/MCE with five (5) passes inclusive of Bahasa Malaysia subject or its equivalent (If Diploma and above, must be academic based)
2. TBE - SPM/MCE or its equivalent (If Diploma and above, must be academic based)

For those out there who want to have a flexi working hours and have more time with your family, you can consider to be a life insurance agent!

Types of Insurance

There are five (5) types of insurance available:
1. Whole Life Plan
Basically, whole life plan gives whole life protection to the Life Covered as long as the premium payment is made for every due date of the policy or, if there is no payment made by the customer, the cash value of the policy, if any, will be used to cover the premium until its exhausted.
The sum covered and with additional bonuses, if any, will be paid to the nominee’s of the policy if death happen, or the payment will go to the Life Covered if there is a Total and Permanent Disability occurs.

2. Term Plan

Term Plan is an insurance policy which give the customers a specific time of coverage of five (5) years, 10 years, 15 years or more. Normally, term insurance will provide the customer with maximum coverage with minimum premium amount depending of the age next birthday of the customer. If the age increase, the premium will be higher. There is no cash value or cash bonuses for term policy once its reach expiry date, unless if there is a product offer by an insurance company with Cash Bonus rider which is an optional to the customer to add in.

3. Endowment Plan

Endowment Plan is a plan which has specific period of coverage time, 15 years, 20 ye,ars or more. Endowment Plan has cash value or cash bonuses which certain plan selected by the customer will be provided with regular cash payout, i.e. every 3 years or 5 years with 10 percent Cash Payout based on the Basic Plan Sum Covered.

4. Single Premium

Single Premium is a plan where the customer will pay one time premium for a short period of coverage, i.e. one (1) year coverage which at the end of the term, the customer will be given the option to receive the coverage proceed or to roll over the sum amount again.

5. Investment Linked

Investment Linked is a Whole Life Policy with an investment elements. The available Units of the policy will be invested in certain fund as agreed between the insurance company and the customer.

Why Do You and Your Family Need Insurance Protection

There are few reasons why you have to buy Insurance protection for you and your family with the current cost of living incusive of healthcare, food, transportation, housing and education costs are high:
1. Healthcare cost now is high and public hospital have to serve so many patients. Private hospital is the alternative available for us to get better and fast service. However, we have to pay more in order to get a better services. With the insurance protection, it will give a peace of mind to you and your family.
2. Now, we have many options for best education for our children but the cost is relatively high. The best thing to do is we have to plan the educational expenses from the time we have children. Insurance provides us to buy education insurance to cater for the need. Normally, it will provide the insurance coverage as well during the period of policy.
3. Insurance company also provide insurance protection for the purpose to cover the breed winner of the family. If anything happen to the main source of income for the family, with the insurance proceed or the policy money, it will reduce the burden during the crisis time.

Buying insurance is not like you buy a normal product which you can see and touch. It is an intangible product. It is your protection for crisis time.