My house is just completed. Please pay a visit when you are free. My address is http://MalaysiaInsuranceGuide.com .
Thanks to all my readers for praise and suggestions given to me since I started this blog few months ago.
**posted to www.MalaysiaInsuranceGuide.blogspot.com at 1.35pm, 5 Dec 06, Malaysia time**
Monday, December 04, 2006
Tuesday, November 21, 2006
Malaysia: Knowing your right in Cancellation of H&S insurance policy
First of all, I would like to emphasise that I DON’T ENCOURAGE YOU TO TERMINATE your H&S insurance without very solid reasons.
Bank Negara Malaysia (Central Bank of Malaysia) has made it compulsory for all insurers to refund certain percentage of annual premium to you if you decide to cancel your H&S insurance.
There are 2 types of premium refund:
1) Free-look period / Cooling-off period
If you decide not to take up the H&S insurance which you have just bought for any reason, you have the right to cancel the policy by returning it to the insurer within 15 days from the date of delivery of the policy.
You are entitled to a full refund of premium paid, after deducting administrative expenses and medical expenses incurred by the insurer in issuing the policy. These expenses shall be RM50 or 10% of the gross premium paid, whichever is lower.
2) Cancellation of policy after the free-look period
You may cancel the policy at any time by giving a written notice to the insurer after the free-look period.
If no claim has been made during the current policy year, you will be entitled to a refund of annual premium based on the scale below:
Period not exceeding [Refund of annual premium,% ]
1 month [80%]
2 months [70%]
3 months [60%]
4 months [50%]
5 months [40%]
6 months [30%]
7 months [25%]
8 months [20%]
9 months [15%]
10 months [10%]
11 months [5%]
>11 months [Nil]
Finally, I would like to emphasise that I DON’T ENCOURAGE YOU TO TERMINATE your H&S insurance without very solid reasons.
**Posted to www.MalaysiaInsuranceGuide.blogspot.com on 22th Nov 2006, 11.43am, Malaysia time**
Bank Negara Malaysia (Central Bank of Malaysia) has made it compulsory for all insurers to refund certain percentage of annual premium to you if you decide to cancel your H&S insurance.
There are 2 types of premium refund:
1) Free-look period / Cooling-off period
If you decide not to take up the H&S insurance which you have just bought for any reason, you have the right to cancel the policy by returning it to the insurer within 15 days from the date of delivery of the policy.
You are entitled to a full refund of premium paid, after deducting administrative expenses and medical expenses incurred by the insurer in issuing the policy. These expenses shall be RM50 or 10% of the gross premium paid, whichever is lower.
2) Cancellation of policy after the free-look period
You may cancel the policy at any time by giving a written notice to the insurer after the free-look period.
If no claim has been made during the current policy year, you will be entitled to a refund of annual premium based on the scale below:
Period not exceeding [Refund of annual premium,% ]
1 month [80%]
2 months [70%]
3 months [60%]
4 months [50%]
5 months [40%]
6 months [30%]
7 months [25%]
8 months [20%]
9 months [15%]
10 months [10%]
11 months [5%]
>11 months [Nil]
Finally, I would like to emphasise that I DON’T ENCOURAGE YOU TO TERMINATE your H&S insurance without very solid reasons.
**Posted to www.MalaysiaInsuranceGuide.blogspot.com on 22th Nov 2006, 11.43am, Malaysia time**
Wednesday, November 15, 2006
Misconception: Hospitalization & Surgical insurance with saving element !!!
“Jenny, my Hospitalization & Surgical (H&S) insurance has saving element, why yours don’t have?”
“Why don’t you buy H&S insurance with cash value like mine?”
“Mr. Agent, my friend bought a H&S insurance with saving element, why the plan you sold to me don’t have?”
All the above statements are common Malaysian public’s misconception towards the premium paid for H&S insurance.
Facts:
No saving element at all
Neither standalone H&S insurance nor attached to life insurance H&S insurance can generate saving for you. In other words, premium paid for H&S insurance is burnt at the end of policy term.
Causes of Misconception:
Wrong focus when reading an insurance quotation
Most of the H&S insurance is sold by life insurance companies. They “build-in” H&S insurance benefit in life insurance and sell it as a package. When a quotation is presented to a potential customer, he will naturally look at how much he can get when he reaches age 55 or 60 or 20 years from now. When the focus is on return, he tends to forget the proportion of premium paid for each insurance benefit.
Normally, the minimum annual premium for an investment-linked insurance in Malaysia is RM1, 200 or RM1, 800. The insurance charges for benefits like H&S, death, total & permanent disability, waiver of premium and critical illnesses protection, etc. are deducted from the annual premium.
**Posted to www.MalaysiaInsuranceGuide.blogspot.com on 16 November 2006 , 11.00 am Malaysia time**
“Why don’t you buy H&S insurance with cash value like mine?”
“Mr. Agent, my friend bought a H&S insurance with saving element, why the plan you sold to me don’t have?”
All the above statements are common Malaysian public’s misconception towards the premium paid for H&S insurance.
Facts:
No saving element at all
Neither standalone H&S insurance nor attached to life insurance H&S insurance can generate saving for you. In other words, premium paid for H&S insurance is burnt at the end of policy term.
Causes of Misconception:
Wrong focus when reading an insurance quotation
Most of the H&S insurance is sold by life insurance companies. They “build-in” H&S insurance benefit in life insurance and sell it as a package. When a quotation is presented to a potential customer, he will naturally look at how much he can get when he reaches age 55 or 60 or 20 years from now. When the focus is on return, he tends to forget the proportion of premium paid for each insurance benefit.
Normally, the minimum annual premium for an investment-linked insurance in Malaysia is RM1, 200 or RM1, 800. The insurance charges for benefits like H&S, death, total & permanent disability, waiver of premium and critical illnesses protection, etc. are deducted from the annual premium.
**Posted to www.MalaysiaInsuranceGuide.blogspot.com on 16 November 2006 , 11.00 am Malaysia time**
Saturday, September 23, 2006
The cost of delay in settling claim for insurance company
The cost of delay in settling claim for insurance company
Malaysia’s consumers generally feel insurance companies are more efficient in collecting premiums than handling insurance claims. I can’t deny that claims issues is one of the reasons why some people still insist not to buy insurance in Malaysia. However, things have started to improve since Insurance Act 1996 took place.
Insurance Act 1996 - Section 161
Insurance Act 1996 protects consumers’ interest. In this article, I would like to share with you Section 161 of the Act which explains the Interest of Policy Money. The Act stipulates if the insurance company does not pay out a claim within 60 days of receipt of intimation of the claim, the insurance company shall pay a minimum compound interest of 4% on expiry of the 60 days until the date of payment.
How does Section 161 work
For example, if an insurance company delays in settling a RM 200,000 sum assured insurance claim for 300 days, it will cost the insurance company RM6, 575 of interest.
The calculation is:
Number of days delay
-------------------------- x interest rate (%) x sum assured (RM)
365 days
300
= ------ x 4% x RM 200,000
365
= RM6, 575
Conclusion
Your right as a consumer in handling claims with insurance company is clearly stated under Section 161 of Insurance Act 1996.
(I hope you can share your claim experience with the readers of this blog. Let them learn from your experience. To share is to care)
**Posted to www.MalaysiaInsuranceGuide.blogspot.com on 23 September 2006, 11:00pm, Malaysia time**
Malaysia’s consumers generally feel insurance companies are more efficient in collecting premiums than handling insurance claims. I can’t deny that claims issues is one of the reasons why some people still insist not to buy insurance in Malaysia. However, things have started to improve since Insurance Act 1996 took place.
Insurance Act 1996 - Section 161
Insurance Act 1996 protects consumers’ interest. In this article, I would like to share with you Section 161 of the Act which explains the Interest of Policy Money. The Act stipulates if the insurance company does not pay out a claim within 60 days of receipt of intimation of the claim, the insurance company shall pay a minimum compound interest of 4% on expiry of the 60 days until the date of payment.
How does Section 161 work
For example, if an insurance company delays in settling a RM 200,000 sum assured insurance claim for 300 days, it will cost the insurance company RM6, 575 of interest.
The calculation is:
Number of days delay
-------------------------- x interest rate (%) x sum assured (RM)
365 days
300
= ------ x 4% x RM 200,000
365
= RM6, 575
Conclusion
Your right as a consumer in handling claims with insurance company is clearly stated under Section 161 of Insurance Act 1996.
(I hope you can share your claim experience with the readers of this blog. Let them learn from your experience. To share is to care)
**Posted to www.MalaysiaInsuranceGuide.blogspot.com on 23 September 2006, 11:00pm, Malaysia time**
Wednesday, September 13, 2006
What? I need to pay extra insurance premium
Do you know that you have a choice?
Do you know ABC insurance company can reject your insurance application, but company XYZ will fully accept your application?
Do you know that some insurance companies keen on whole life insurance rather than medical & health insurance?
Do you know that different insurance companies look at your insurance proposal from different perspectives?
All insurance companies have their own guidelines to underwrite an insurance application. Whether your application is rejected, loaded with extra premium or accepted with certain terms, etc., it all depends on the underwriting guidelines of the insurance companies and the details of your case.
Case study:
There is a real case that I would like to share with you. Few months ago, Mr. Tan (not his real name), 40 years old, submitted a whole life insurance application to a reputable life insurance company. The insurance company required him to do a medical check-up and few types of blood tests. He followed the procedure and submitted the medical results through his agent, David to the insurance company.
Few days later, the insurance company accepted his application but on conditions. His application was loaded with extra 50% premium and heart related diseases were excluded. The reason for rejection was poor health condition. Mr. Tan wrote a letter to appeal but failed. He was disappointed.
The agent, David kept on asking Mr. Tan to accept the above offer. David said his company is so big and if his company imposed certain conditions on Mr. Tan’s application, other insurance companies will also do so. But at the bottom of his heart, Mr. Tan wanted to try another insurance company.
Few days later, Mr. Tan was lucky enough to find out that one of his colleague’s husbands, by the name of Abdullah is an insurance agent with another insurance company.
Mr. Tan approached Abdullah and asked him to submit his medical results to the insurance company Abdullah represented. Unbelievable, the insurance company accepted the case as standard life (normal person condition).
Discussion
If Mr. Tan accepted the ‘offer’ by first insurance company, he would have to pay extra 50% premium every year for the rest of his life. He has to pay RM3,000 annual premium which excludes the coverage of heart related diseases instead of RM2,000.
Neither David nor the first insurance company should be blamed. David performed his job as an insurance agent to secure business for the insurance company. The first insurance company followed its own underwriting guidelines to underwrite Mr. Tan’s application.
If Mr. Tan did not try another insurance company but accept the belief that all insurance companies will treat him the same, then it is Mr. Tan’s own fault. He can only blame himself.
Conclusion
If your insurance application is loaded with extra premium, imposed with certain exclusions or rejected by the insurance company, you must try to apply another insurance company.
**post to Malaysia Insurance Guide blog on 13 Sept , at 5.55pm Malaysia time**
Do you know ABC insurance company can reject your insurance application, but company XYZ will fully accept your application?
Do you know that some insurance companies keen on whole life insurance rather than medical & health insurance?
Do you know that different insurance companies look at your insurance proposal from different perspectives?
All insurance companies have their own guidelines to underwrite an insurance application. Whether your application is rejected, loaded with extra premium or accepted with certain terms, etc., it all depends on the underwriting guidelines of the insurance companies and the details of your case.
Case study:
There is a real case that I would like to share with you. Few months ago, Mr. Tan (not his real name), 40 years old, submitted a whole life insurance application to a reputable life insurance company. The insurance company required him to do a medical check-up and few types of blood tests. He followed the procedure and submitted the medical results through his agent, David to the insurance company.
Few days later, the insurance company accepted his application but on conditions. His application was loaded with extra 50% premium and heart related diseases were excluded. The reason for rejection was poor health condition. Mr. Tan wrote a letter to appeal but failed. He was disappointed.
The agent, David kept on asking Mr. Tan to accept the above offer. David said his company is so big and if his company imposed certain conditions on Mr. Tan’s application, other insurance companies will also do so. But at the bottom of his heart, Mr. Tan wanted to try another insurance company.
Few days later, Mr. Tan was lucky enough to find out that one of his colleague’s husbands, by the name of Abdullah is an insurance agent with another insurance company.
Mr. Tan approached Abdullah and asked him to submit his medical results to the insurance company Abdullah represented. Unbelievable, the insurance company accepted the case as standard life (normal person condition).
Discussion
If Mr. Tan accepted the ‘offer’ by first insurance company, he would have to pay extra 50% premium every year for the rest of his life. He has to pay RM3,000 annual premium which excludes the coverage of heart related diseases instead of RM2,000.
Neither David nor the first insurance company should be blamed. David performed his job as an insurance agent to secure business for the insurance company. The first insurance company followed its own underwriting guidelines to underwrite Mr. Tan’s application.
If Mr. Tan did not try another insurance company but accept the belief that all insurance companies will treat him the same, then it is Mr. Tan’s own fault. He can only blame himself.
Conclusion
If your insurance application is loaded with extra premium, imposed with certain exclusions or rejected by the insurance company, you must try to apply another insurance company.
**post to Malaysia Insurance Guide blog on 13 Sept , at 5.55pm Malaysia time**
Saturday, September 09, 2006
Expatriates in Malaysia: Medical Insurance Guide for Malaysia My Second Home (MM2H) Program
Malaysia My Second Home (MM2H) is a program that allows people from all over the world who fulfill the requirements to stay in Malaysia. A 10-year visa and unlimited entries are given to those qualified for this program. It is supervised by the Ministry of Tourism Malaysia.
One of the criteria for applicants and their dependents including spouse and children to fulfill is they MUST purchase medical insurance policy from any insurance companies in Malaysia. The objective of this requirement is to make sure the hospitalization expenses and surgical fees of applicants and their dependents are well taken care of.
There are various types of medical insurance in Malaysia, namely medical card insurance (also known as hospitalization & surgical insurance), 36 critical illnesses protection and hospitalization income benefit which are common in Malaysia.
In this blog, I will focus on medical card insurance. In general, the major items covered under medical card insurance are hospitalization expenses like Room & Board charges for a bed or intensive care unit; surgical related fees due to diseases and accidents while you are in the hospital; surgical fees without hospitalization; pre-hospitalization treatment; post-hospitalization treatment; and outpatient cancer and kidney dialysis treatments.
A plastic card with the size of a credit card will be issued to the medical card insurance holder once the insurance application is approved by the insurance company.
There are three types of medical card insurance:
a) Standalone medical card insurance
b) Medical card insurance attached to term life insurance
c) Medical card insurance attached to whole life or investment-linked insurance
I will discuss standalone and medical card insurance attached to term life insurance here because these two types are more suitable to expatriates in Malaysia.
a) Standalone medical card insurance
Like its name, this type of medical card is an independent insurance and does not attach to other types of insurance. Almost all general insurance companies and a few life insurance companies offer this type of medical card insurance.
From policy contract’s point of view, some policies are guaranteed renewable, some are conditional guaranteed renewable and the rest are yearly renewable. The details on renewable issue will be discussed later.
Advantage: No other insurance premium like death or total & permanent disability premium will be incurred. Therefore, your insurance premium commitment is lesser.
Disadvantage: You will have to continue paying the annual premium even when you are diagnosed to have one of the 36 critical illnesses or become total & permanent disabled.
b) Medical card insurance attached to term life insurance
This type of medical card insurance is offered only by life insurance companies. It is attached to a term life insurance policy as a rider. Term insurance is also known as temporary life insurance.
A term insurance usually covers a minimal amount of sum assured like RM5,000, RM10,000 or RM20,000. The period of coverage is typically 10 years, 20 years, until age 60, 65 or 70.
Advantage: You get certain amount of life insurance coverage while you are staying in Malaysia.
Disadvantage: When the period of coverage expires, the medical card insurance expires too. The insurance charges for the term insurance are borne by policy holders.
Things to watch out when purchasing medical card insurance in Malaysia
1) Policy renewal condition
From policy contract’s point of view, some policies are guaranteed renewable, some are conditional guaranteed renewable and the rest are yearly renewable. Besides life insurance companies, more and more general insurance companies are offering guaranteed renewable type of medical card insurance in Malaysia.
Guaranteed renewable means your medical insurance can be renewed when it is due for renewal. Of course you can’t renew it anymore if your life time limit is used up.
Conditional guaranteed renewable means your policy must be claims free (never make a claim before) and in force for a period of TWO consecutive years in order to enjoy this guaranteed renewable advantage.
Yearly renewable means the renewal of your policy is subject to the approval of the insurer. You have no control at this.
My opinion: Make sure the policy you buy is guaranteed renewable. Otherwise, you may not be allowed to renew if you contract a critical illness or your medical bill reaches the annual limit; and it is very difficult to purchase another health insurance policy in Malaysia.
Therefore, always go for guaranteed renewable medical card.
2) As charged or preset amount based on surgical schedule
As charged means whatever costs incurred under an operation, subject to the annual limit or per disability limit.
Preset amount means the maximum pay-out from the insurer for each benefit, for example, some insurers pay surgical fees but only up to a preset amount of RM10, 000.
My opinion: You get what you pay for in this type of insurance. Although medical insurance with preset amount is cheaper compared to as charged type, still go for as charged type because surgical fees always chalk up a big portion of a medical bill.
We will continue to discuss other areas which you must pay attention to when purchasing medical insurance in Malaysia in our next blog session including co-payment, pre-existing conditions, specified illnesses exclusions, waiting period, etc. Do check it out!
One of the criteria for applicants and their dependents including spouse and children to fulfill is they MUST purchase medical insurance policy from any insurance companies in Malaysia. The objective of this requirement is to make sure the hospitalization expenses and surgical fees of applicants and their dependents are well taken care of.
There are various types of medical insurance in Malaysia, namely medical card insurance (also known as hospitalization & surgical insurance), 36 critical illnesses protection and hospitalization income benefit which are common in Malaysia.
In this blog, I will focus on medical card insurance. In general, the major items covered under medical card insurance are hospitalization expenses like Room & Board charges for a bed or intensive care unit; surgical related fees due to diseases and accidents while you are in the hospital; surgical fees without hospitalization; pre-hospitalization treatment; post-hospitalization treatment; and outpatient cancer and kidney dialysis treatments.
A plastic card with the size of a credit card will be issued to the medical card insurance holder once the insurance application is approved by the insurance company.
There are three types of medical card insurance:
a) Standalone medical card insurance
b) Medical card insurance attached to term life insurance
c) Medical card insurance attached to whole life or investment-linked insurance
I will discuss standalone and medical card insurance attached to term life insurance here because these two types are more suitable to expatriates in Malaysia.
a) Standalone medical card insurance
Like its name, this type of medical card is an independent insurance and does not attach to other types of insurance. Almost all general insurance companies and a few life insurance companies offer this type of medical card insurance.
From policy contract’s point of view, some policies are guaranteed renewable, some are conditional guaranteed renewable and the rest are yearly renewable. The details on renewable issue will be discussed later.
Advantage: No other insurance premium like death or total & permanent disability premium will be incurred. Therefore, your insurance premium commitment is lesser.
Disadvantage: You will have to continue paying the annual premium even when you are diagnosed to have one of the 36 critical illnesses or become total & permanent disabled.
b) Medical card insurance attached to term life insurance
This type of medical card insurance is offered only by life insurance companies. It is attached to a term life insurance policy as a rider. Term insurance is also known as temporary life insurance.
A term insurance usually covers a minimal amount of sum assured like RM5,000, RM10,000 or RM20,000. The period of coverage is typically 10 years, 20 years, until age 60, 65 or 70.
Advantage: You get certain amount of life insurance coverage while you are staying in Malaysia.
Disadvantage: When the period of coverage expires, the medical card insurance expires too. The insurance charges for the term insurance are borne by policy holders.
Things to watch out when purchasing medical card insurance in Malaysia
1) Policy renewal condition
From policy contract’s point of view, some policies are guaranteed renewable, some are conditional guaranteed renewable and the rest are yearly renewable. Besides life insurance companies, more and more general insurance companies are offering guaranteed renewable type of medical card insurance in Malaysia.
Guaranteed renewable means your medical insurance can be renewed when it is due for renewal. Of course you can’t renew it anymore if your life time limit is used up.
Conditional guaranteed renewable means your policy must be claims free (never make a claim before) and in force for a period of TWO consecutive years in order to enjoy this guaranteed renewable advantage.
Yearly renewable means the renewal of your policy is subject to the approval of the insurer. You have no control at this.
My opinion: Make sure the policy you buy is guaranteed renewable. Otherwise, you may not be allowed to renew if you contract a critical illness or your medical bill reaches the annual limit; and it is very difficult to purchase another health insurance policy in Malaysia.
Therefore, always go for guaranteed renewable medical card.
2) As charged or preset amount based on surgical schedule
As charged means whatever costs incurred under an operation, subject to the annual limit or per disability limit.
Preset amount means the maximum pay-out from the insurer for each benefit, for example, some insurers pay surgical fees but only up to a preset amount of RM10, 000.
My opinion: You get what you pay for in this type of insurance. Although medical insurance with preset amount is cheaper compared to as charged type, still go for as charged type because surgical fees always chalk up a big portion of a medical bill.
We will continue to discuss other areas which you must pay attention to when purchasing medical insurance in Malaysia in our next blog session including co-payment, pre-existing conditions, specified illnesses exclusions, waiting period, etc. Do check it out!
Tuesday, September 05, 2006
Malaysia: Snatch theft attack: Is your insurance covered?
Malaysia: Snatch theft attack: Is your insurance covered?
Recently a friend of mine asked me a few questions about insurance claims related to snatch theft attack. I hereby used his questions together with a few case studies to share with you what I told him.
Case study I:
A saleslady was snatched. she was pushed down a staircase by the thief. She landed head first. She was rushed to a government hospital and warded in a serious condition. She passed away later. The police had classified this case as murder.
What types of insurance are payable?
1) Death benefit under Personal Accident insurance: Payable*
2) Death benefit under Group Personal Accident insurance: Payable*
3) Death benefit under Whole Life insurance: Payable
4) Death benefit under Endowment insurance: Payable
5) Death benefit under Investment-linked insurance: Payable
*Death benefit on all Personal Accident policies is payable regardless of number of policies the deceased have.
Case study II:
A 25-year-old administrative executive was seen struggling with two snatch thieves on a motorcycle who had grabbed her handbag. She clung on the bag and was dragged about 4m. She is now warded at a private hospital with injuries to her spine and paralysed from the waist down.
What types of insurance are payable?
1) Hospitalisation expenses & Surgical fees benefits under Medical & Health insurance (Commonly known as medical card insurance): Payable**
2) Medical expenses benefit under Personal Accident insurance: Payable**
3) Temporary total / partial disablement weekly benefit under Personal Accident insurance: Payable**
4) Emergency accidental out-patient treatment benefit under Medical & Health insurance: Payable**
**All the above benefits claim are based on reimbursement basic. Reimbursement means you get back what you lost or you can’t claim more than your actual expenses.
Total & Permanent Disablement (TPD) benefit under Personal Accident insurance: Payable***
TPD benefit under Life insurance: Payable***
TPD benefit under Endowment insurance: Payable***
TPD benefit under Investment-linked insurance: Payable***
***The definition of TPD among insurance companies may vary, but it is commonly defined as:
i) Totally and permanently for the insured person to earn any wages; or
ii) Loss of two limbs (example: both arms, both legs, or one arm and one leg, totally loss of sight of both eyes) by amputation; or
iii) Loss of use of two limbs; or
iv) Totally and permanently cannot perform activities of daily living like dressing, bathing, eating, walking, etc.
Case study III:
A 58-year-old senior citizen was riding her motorcycle to a community hall in an early morning about 5am. She was said to have been waylaid by a group of four young men. She fell off her motorcycle and injured her face and died in hospital later. Her purse and jewellery were missing. Police reported that she died of a heart attack.
What types of insurance are payable?
Death benefit under Life insurance: Payable
Death benefit under Endowment insurance: Payable
Death benefit under Investment-linked insurance: Payable
Death benefit under Personal Accident insurance: NOT PAYABLE****
****Death benefit under Personal accident insurance is only claimable when the cause of death is due to accident. In this case, police report says the victim is died of heart attack.
Recently a friend of mine asked me a few questions about insurance claims related to snatch theft attack. I hereby used his questions together with a few case studies to share with you what I told him.
Case study I:
A saleslady was snatched. she was pushed down a staircase by the thief. She landed head first. She was rushed to a government hospital and warded in a serious condition. She passed away later. The police had classified this case as murder.
What types of insurance are payable?
1) Death benefit under Personal Accident insurance: Payable*
2) Death benefit under Group Personal Accident insurance: Payable*
3) Death benefit under Whole Life insurance: Payable
4) Death benefit under Endowment insurance: Payable
5) Death benefit under Investment-linked insurance: Payable
*Death benefit on all Personal Accident policies is payable regardless of number of policies the deceased have.
Case study II:
A 25-year-old administrative executive was seen struggling with two snatch thieves on a motorcycle who had grabbed her handbag. She clung on the bag and was dragged about 4m. She is now warded at a private hospital with injuries to her spine and paralysed from the waist down.
What types of insurance are payable?
1) Hospitalisation expenses & Surgical fees benefits under Medical & Health insurance (Commonly known as medical card insurance): Payable**
2) Medical expenses benefit under Personal Accident insurance: Payable**
3) Temporary total / partial disablement weekly benefit under Personal Accident insurance: Payable**
4) Emergency accidental out-patient treatment benefit under Medical & Health insurance: Payable**
**All the above benefits claim are based on reimbursement basic. Reimbursement means you get back what you lost or you can’t claim more than your actual expenses.
Total & Permanent Disablement (TPD) benefit under Personal Accident insurance: Payable***
TPD benefit under Life insurance: Payable***
TPD benefit under Endowment insurance: Payable***
TPD benefit under Investment-linked insurance: Payable***
***The definition of TPD among insurance companies may vary, but it is commonly defined as:
i) Totally and permanently for the insured person to earn any wages; or
ii) Loss of two limbs (example: both arms, both legs, or one arm and one leg, totally loss of sight of both eyes) by amputation; or
iii) Loss of use of two limbs; or
iv) Totally and permanently cannot perform activities of daily living like dressing, bathing, eating, walking, etc.
Case study III:
A 58-year-old senior citizen was riding her motorcycle to a community hall in an early morning about 5am. She was said to have been waylaid by a group of four young men. She fell off her motorcycle and injured her face and died in hospital later. Her purse and jewellery were missing. Police reported that she died of a heart attack.
What types of insurance are payable?
Death benefit under Life insurance: Payable
Death benefit under Endowment insurance: Payable
Death benefit under Investment-linked insurance: Payable
Death benefit under Personal Accident insurance: NOT PAYABLE****
****Death benefit under Personal accident insurance is only claimable when the cause of death is due to accident. In this case, police report says the victim is died of heart attack.
Monday, September 04, 2006
Malaysia: The truth about life insurance
Malaysia: The truth about life insurance
Life insurance is the foundation of total financial planning. Without it, whatever types of planning are baseless.
The basic purpose of life insurance is to create cash. Nothing more, nothing less.
Life insurance is a “contract for delivery of money”.
Life insurance is like a charity money changer, you give her 3 cent, she will give you RM1. You are buying discounted Ringgit.
Whether you buy life insurance or not, you already have it. Either you are insured by a insurance company or self-insured by your own pocket.
Life insurance is a contract for time and money. If you ran out of time, the contract will give your loved one money. If you have time, the contract will give you money.
When you save money in a bank that is call accumulation. But, if you save money in life insurance, you create an instant estate when you need it most.
Life insurance is sold because people understand the fact of life. Human beings either lives too long, die too soon or become disabled due to accident or sickness. Money is needed in all these events.
You can’t buy insurance when you need it, you must buy it before your need it. No life insurance companies are going to insure someone who is disabled or has critical illness.
Life insurance is not purchased because someone might die but because someone else has to live.
Life insurance is a concept of risk sharing.
Life insurance provides you financial support in times of emergency but should not view it as an investment vehicle to make profits.
If you intend to grow your wealth, it makes sense that you protect the most important investment – you, by using life insurance.
Life insurance is the foundation of total financial planning. Without it, whatever types of planning are baseless.
The basic purpose of life insurance is to create cash. Nothing more, nothing less.
Life insurance is a “contract for delivery of money”.
Life insurance is like a charity money changer, you give her 3 cent, she will give you RM1. You are buying discounted Ringgit.
Whether you buy life insurance or not, you already have it. Either you are insured by a insurance company or self-insured by your own pocket.
Life insurance is a contract for time and money. If you ran out of time, the contract will give your loved one money. If you have time, the contract will give you money.
When you save money in a bank that is call accumulation. But, if you save money in life insurance, you create an instant estate when you need it most.
Life insurance is sold because people understand the fact of life. Human beings either lives too long, die too soon or become disabled due to accident or sickness. Money is needed in all these events.
You can’t buy insurance when you need it, you must buy it before your need it. No life insurance companies are going to insure someone who is disabled or has critical illness.
Life insurance is not purchased because someone might die but because someone else has to live.
Life insurance is a concept of risk sharing.
Life insurance provides you financial support in times of emergency but should not view it as an investment vehicle to make profits.
If you intend to grow your wealth, it makes sense that you protect the most important investment – you, by using life insurance.
Saturday, September 02, 2006
Malaysia Budget 2007: Is your insurance qualified for tax relief?
Is the insurance policy you bought qualified for tax relief?
Do you know the Inland Revenue Board (IRB) provides guidelines to explain various criteria for insurance tax relief?
Do you understand IRB’s guidelines?
Tax relief for insurance under the Budget 2007 remains unchanged. As a revision, a taxpayer can enjoy a tax relied of up to RM6,000 for his combined contribution to EPF and life insurance, and a total of RM3,000 for medical and child education policy.
Life insurance
Examples of life insurance are whole life insurance and investment-linked insurance which give protection up to age 80, 90 or 100, endowment insurance which matures after certain year like 20 years, 25 years or at age 50, 55 or 60.
Tax relief for an individual’s life insurance is very clear cut. You pay the premium and you enjoy the tax relief.
But tax relief for life insurance bought by husband for wife, or wife for husband is quite confusing for many policy holders. If the husband is the payer, the insurance premium paid is qualified for tax relief under the husband’s name and vice verse.
The insurance premium paid by the husband or wife is commonly termed as payor benefit, payer benefit rider or spouse benefit rider.
In the situation where a husband doesn’t have any income, he can opt for combined assessment. In this case, whatever takaful or life insurance premium paid by the husband is considered paid by the wife. He is entitled for RM3, 000 of spouse relief.
Life insurance with medical benefits like critical illnesses
Based on the statement printed on the insurance premium certificate for tax relief issued to policy holders by a few major life insurance companies, if a policy holder would like to put this type of insurance under education or medical insurance category, only 20% or 60% of the total premium paid is eligible for tax relief.
Child education policy
Under the guidelines provided by the Inland Revenue Board (Circular No. 4/98), various criteria must be met by an education insurance to enjoy tax deduction, which are:
1) The beneficiary of the insurance must be the child, while the life assured can either be the parent or the child.
2) In the case the parent is the life assured, the nominee must be the child.
3) If the life assured is the child, the following conditions must be fulfilled:
a. A payer benefit rider on the payer’s life with the same duration as the basic insurance must be attached. In the event the payer (parent) passed away and/or is totally and permanently disabled, all future premiums will be waived.
b. The premium of payer benefit rider, whether is in addition to the basic premium or is bundled with the basic insurance, which is a single premium, will qualify for tax deduction.
c. If the payer of the education insurance does not qualify for the payer benefit rider, which means no payer benefit rider can be attached to the basic insurance, the premium paid for the basic insurance is NOT entitled to claim for a deduction.
4) For a takaful education insurance, the matured amount must be made a ‘hibah’ or gift to the child by the participant (parent).
5) For both conventional and takaful education insurance, the matured amount must be scheduled to take place when the child is between 13 and 25 years of age.
Medical insurance
1) The insurance coverage should be for a period of 12 months or more.
2) The medical insurance can be a rider or a stand-alone policy. If it is a
rider, only the rider’s premium are eligible for deduction.
3) If critical illnesses rider is attached to a basic insurance, the total amount of the rider’s premium is deductible.
4) In situation where critical illnesses rider is attached to a term insurance or personal accident insurance, only 60% of the total premium is qualified for tax deduction.
5) Premium for waiver benefit rider and travel medical expenses insurance are NOT tax deductible.
Is the insurance policy you bought qualified for tax relief?
Do you know the Inland Revenue Board (IRB) provides guidelines to explain various criteria for insurance tax relief?
Do you understand IRB’s guidelines?
Tax relief for insurance under the Budget 2007 remains unchanged. As a revision, a taxpayer can enjoy a tax relied of up to RM6,000 for his combined contribution to EPF and life insurance, and a total of RM3,000 for medical and child education policy.
Life insurance
Examples of life insurance are whole life insurance and investment-linked insurance which give protection up to age 80, 90 or 100, endowment insurance which matures after certain year like 20 years, 25 years or at age 50, 55 or 60.
Tax relief for an individual’s life insurance is very clear cut. You pay the premium and you enjoy the tax relief.
But tax relief for life insurance bought by husband for wife, or wife for husband is quite confusing for many policy holders. If the husband is the payer, the insurance premium paid is qualified for tax relief under the husband’s name and vice verse.
The insurance premium paid by the husband or wife is commonly termed as payor benefit, payer benefit rider or spouse benefit rider.
In the situation where a husband doesn’t have any income, he can opt for combined assessment. In this case, whatever takaful or life insurance premium paid by the husband is considered paid by the wife. He is entitled for RM3, 000 of spouse relief.
Life insurance with medical benefits like critical illnesses
Based on the statement printed on the insurance premium certificate for tax relief issued to policy holders by a few major life insurance companies, if a policy holder would like to put this type of insurance under education or medical insurance category, only 20% or 60% of the total premium paid is eligible for tax relief.
Child education policy
Under the guidelines provided by the Inland Revenue Board (Circular No. 4/98), various criteria must be met by an education insurance to enjoy tax deduction, which are:
1) The beneficiary of the insurance must be the child, while the life assured can either be the parent or the child.
2) In the case the parent is the life assured, the nominee must be the child.
3) If the life assured is the child, the following conditions must be fulfilled:
a. A payer benefit rider on the payer’s life with the same duration as the basic insurance must be attached. In the event the payer (parent) passed away and/or is totally and permanently disabled, all future premiums will be waived.
b. The premium of payer benefit rider, whether is in addition to the basic premium or is bundled with the basic insurance, which is a single premium, will qualify for tax deduction.
c. If the payer of the education insurance does not qualify for the payer benefit rider, which means no payer benefit rider can be attached to the basic insurance, the premium paid for the basic insurance is NOT entitled to claim for a deduction.
4) For a takaful education insurance, the matured amount must be made a ‘hibah’ or gift to the child by the participant (parent).
5) For both conventional and takaful education insurance, the matured amount must be scheduled to take place when the child is between 13 and 25 years of age.
Medical insurance
1) The insurance coverage should be for a period of 12 months or more.
2) The medical insurance can be a rider or a stand-alone policy. If it is a
rider, only the rider’s premium are eligible for deduction.
3) If critical illnesses rider is attached to a basic insurance, the total amount of the rider’s premium is deductible.
4) In situation where critical illnesses rider is attached to a term insurance or personal accident insurance, only 60% of the total premium is qualified for tax deduction.
5) Premium for waiver benefit rider and travel medical expenses insurance are NOT tax deductible.
Thursday, August 31, 2006
Understanding Malaysia Medical & Health Insurance (MHI)
There are various types of MHI in Malaysia.
Medical card insurance (also known as hospital & surgical insurance) , 36 critical illnesses protection and hospitalization income benefit are common MHI in Malaysia.
In this blog, I will focus on medical card insurance. In general, the major items cover under medical card insurance are hospitalisation expenses like Room & Board charges for a bed or intensive care unit; surgical related fees due to diseases and accidents while you are in the hospital; surgical fees without hospitalise; pre-hospitalisation treatment; post-hospitalisation treatment; and outpatient cancer and kidney dialysis treatments.
A plastic card with the size of a credit card will be issued to the medical card insurance holder once the insurance application is approved by the insurance company.
As far as I know, there are three types of medical card insurance, namely:
a) Standalone medical card insurance
b) Medical card insurance attached to investment-linked insurance
c) Medical card insurance attached to term life insurance
a) Standalone medical card insurance
Like its name, this type of medical card is an independent insurance and does not attach to other types of insurance. Almost all general insurance companies and a few life insurance companies offer this type of medical card insurance.
From policy contract’s point of view, some policies are guaranteed renewable, some are conditional guaranteed renewable and the rest are yearly renewable. The details on renewable issue will be discussed in future article.
Advantage: No other insurance premium like death or total & permanent disability premium will be incurred. Therefore, your insurance premium commitment is lesser.
Disadvantage: You will have to continue paying the annual premium even when you are diagnosed to have one of the 36 critical illnesses or become total & permanent disabled.
b) Medical card insurance attached to investment-linked insurance
This type of medical card insurance is only offered by life insurance companies. It is attached to a whole life investment-linked insurance policy as a supplementary benefit.
The minimum annual premium for an investment-linked insurance is RM1, 200 or RM1, 800 depending on the insurance companies practice.
The insurance premium for medical card insurance is included in the annual premium.
Many insurance buyers overlook this insurance premium. Find out the insurance premium for the medical card insurance before putting your signature on the proposal form.
Advantage: Most insurance companies will waive the future premium of medical card insurance if the card holder is diagnosed to have one the 36 critical illness or become total & permanent disabled.
Disadvantage: If the main policy lapses, the medical card insurance will lapse too.
c) Medical card insurance attached to term life insurance
This type of medical card insurance is only offered by life insurance companies. It is attached to a term life insurance policy as a supplementary benefit.
Term insurance is also known as temporary life insurance. A term insurance usually covers a minimal amount of sum assured like RM5,000 , RM10,000 or RM20,000.
The period of coverage, typically 10 years, 20 years, until age 60, 65 or 70.
Advantage: You get certain amount of life insurance coverage.
Disadvantage: When the period of coverage expires, the medical card insurance expires too.
Conclusion:
All these medical card insurance have their advantages and disadvantages. My opinions are:
If you already have sufficient life insurance, and you are only looking for a medical card insurance, then you might consider standalone type of medical card insurance.
If you plan to top-up your life insurance coverage now, at the same time looking for medical card insurance, then you can consider medical card insurance which is attached to investment-linked insurance.
If you need an extra life insurance coverage, and at the same time looking for medical card insurance offered by life insurance companies, then you can go for medical card insurance which is attached to term life insurance.
There are various types of MHI in Malaysia.
Medical card insurance (also known as hospital & surgical insurance) , 36 critical illnesses protection and hospitalization income benefit are common MHI in Malaysia.
In this blog, I will focus on medical card insurance. In general, the major items cover under medical card insurance are hospitalisation expenses like Room & Board charges for a bed or intensive care unit; surgical related fees due to diseases and accidents while you are in the hospital; surgical fees without hospitalise; pre-hospitalisation treatment; post-hospitalisation treatment; and outpatient cancer and kidney dialysis treatments.
A plastic card with the size of a credit card will be issued to the medical card insurance holder once the insurance application is approved by the insurance company.
As far as I know, there are three types of medical card insurance, namely:
a) Standalone medical card insurance
b) Medical card insurance attached to investment-linked insurance
c) Medical card insurance attached to term life insurance
a) Standalone medical card insurance
Like its name, this type of medical card is an independent insurance and does not attach to other types of insurance. Almost all general insurance companies and a few life insurance companies offer this type of medical card insurance.
From policy contract’s point of view, some policies are guaranteed renewable, some are conditional guaranteed renewable and the rest are yearly renewable. The details on renewable issue will be discussed in future article.
Advantage: No other insurance premium like death or total & permanent disability premium will be incurred. Therefore, your insurance premium commitment is lesser.
Disadvantage: You will have to continue paying the annual premium even when you are diagnosed to have one of the 36 critical illnesses or become total & permanent disabled.
b) Medical card insurance attached to investment-linked insurance
This type of medical card insurance is only offered by life insurance companies. It is attached to a whole life investment-linked insurance policy as a supplementary benefit.
The minimum annual premium for an investment-linked insurance is RM1, 200 or RM1, 800 depending on the insurance companies practice.
The insurance premium for medical card insurance is included in the annual premium.
Many insurance buyers overlook this insurance premium. Find out the insurance premium for the medical card insurance before putting your signature on the proposal form.
Advantage: Most insurance companies will waive the future premium of medical card insurance if the card holder is diagnosed to have one the 36 critical illness or become total & permanent disabled.
Disadvantage: If the main policy lapses, the medical card insurance will lapse too.
c) Medical card insurance attached to term life insurance
This type of medical card insurance is only offered by life insurance companies. It is attached to a term life insurance policy as a supplementary benefit.
Term insurance is also known as temporary life insurance. A term insurance usually covers a minimal amount of sum assured like RM5,000 , RM10,000 or RM20,000.
The period of coverage, typically 10 years, 20 years, until age 60, 65 or 70.
Advantage: You get certain amount of life insurance coverage.
Disadvantage: When the period of coverage expires, the medical card insurance expires too.
Conclusion:
All these medical card insurance have their advantages and disadvantages. My opinions are:
If you already have sufficient life insurance, and you are only looking for a medical card insurance, then you might consider standalone type of medical card insurance.
If you plan to top-up your life insurance coverage now, at the same time looking for medical card insurance, then you can consider medical card insurance which is attached to investment-linked insurance.
If you need an extra life insurance coverage, and at the same time looking for medical card insurance offered by life insurance companies, then you can go for medical card insurance which is attached to term life insurance.
Tuesday, August 29, 2006
Medical & Health Insurance in Malaysia
Topic: How to solve complaints about over-charged medical fees
I refer to the newspaper headline of Malaysia's leading Chinese newspaper, Sin Chew Jit Poh dated 21 June 2006, "The total claim amount paid by insurance companies are not based on the medical bill, but the market rate".
The interviewee is the CEO of Pacific Insurance Berhad. The newpaper report quoted medical treatment cost caused by Denggi fever as an example. He said if normal hospitals charge around RM3,500 for Denggi fever treatment, however the hospital that the medical card insurance holder admitted is charging RM8,000 for the same treatment, the insurance will only pay RM3,500 to him.
If the interviewee is referring to the Bank Negara Malaysia guideline on "customary and reasonable charges", then it is very difficult for medical card insurance holders to understand it.
My personal opinions in solving the over-charged dispute are:
1) Let the public and insurance agent have access to the guidelines by Ministry of Health
The Fee Schedule is the guidelines set by government to supervise the medical treatment charges by private doctors and private hospitals.
As far as I concern, insurance companies are using this Schedule as one of the guides to determine their medical card insurance benefits and premium rates.
I called Ministry of Health few weeks ago and found out this Schedule costs RM100 per copy. It is too expensive. Furthermore, I cannot find it in major bookstores in Kuala Lumpur.
Ministry of Health should post it on her website, so that public can view it, especially for patients before undergoing an operation and insurance agent. When these parties have certain knowledge on the estimated medical costs on certain medical treatment, the over-charge complaints by patients can be reduced.
2) Booklets or brochures to explain medical costs
Ministry of Health can come out with booklets or brochures to show the range of medical costs for certain common diseases like Denggi fever, appendix operation and angioplasty, etc. By educating the public through these booklets, consumers will know their rights better.
Conclusion:
I believe with the efforts from all parties involved, complaints by patients about over-charged on medical treatment can be solved.
Topic: How to solve complaints about over-charged medical fees
I refer to the newspaper headline of Malaysia's leading Chinese newspaper, Sin Chew Jit Poh dated 21 June 2006, "The total claim amount paid by insurance companies are not based on the medical bill, but the market rate".
The interviewee is the CEO of Pacific Insurance Berhad. The newpaper report quoted medical treatment cost caused by Denggi fever as an example. He said if normal hospitals charge around RM3,500 for Denggi fever treatment, however the hospital that the medical card insurance holder admitted is charging RM8,000 for the same treatment, the insurance will only pay RM3,500 to him.
If the interviewee is referring to the Bank Negara Malaysia guideline on "customary and reasonable charges", then it is very difficult for medical card insurance holders to understand it.
My personal opinions in solving the over-charged dispute are:
1) Let the public and insurance agent have access to the guidelines by Ministry of Health
The Fee Schedule is the guidelines set by government to supervise the medical treatment charges by private doctors and private hospitals.
As far as I concern, insurance companies are using this Schedule as one of the guides to determine their medical card insurance benefits and premium rates.
I called Ministry of Health few weeks ago and found out this Schedule costs RM100 per copy. It is too expensive. Furthermore, I cannot find it in major bookstores in Kuala Lumpur.
Ministry of Health should post it on her website, so that public can view it, especially for patients before undergoing an operation and insurance agent. When these parties have certain knowledge on the estimated medical costs on certain medical treatment, the over-charge complaints by patients can be reduced.
2) Booklets or brochures to explain medical costs
Ministry of Health can come out with booklets or brochures to show the range of medical costs for certain common diseases like Denggi fever, appendix operation and angioplasty, etc. By educating the public through these booklets, consumers will know their rights better.
Conclusion:
I believe with the efforts from all parties involved, complaints by patients about over-charged on medical treatment can be solved.
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