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**