“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**
Wednesday, November 15, 2006
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