Dealing With Intermediaries

Who is an insurance or takaful intermediary?

An insurance intermediary is a person or a company that helps you in buying insurance. Insurance agents, insurance brokers and financial advisers are insurance intermediaries.

On the other hand, a takaful intermediary is someone who solicits takaful business or invites potential customers to enter into takaful contracts with operators. They are also known as takaful agents and takaful brokers.

What's the difference?

An insurance or takaful agent represents an insurance company or takaful operator and primarily sells insurance policies or takaful plans issued by the insurance company or takaful operator it represents. An insurance or takaful broker on the other hand represents the customer and advises the customer on the most suitable insurance policy or takaful plan. A financial adviser is an independent party that provides financial planning services to the customer based on the customers’ financial needs.

These differences are illustrated in the table below:


Tips on dealing with insurance or takaful intermediaries

Deal with an agent, broker or financial adviser with the following characteristics:

• Good knowledge of insurance and/or takaful products

• Understands your needs and interests

• Ensures you understand what you are buying

• Does not over-promise or over-sell

• Factual, not pushy or intimidating

• Delivers quality and timely service
• 
  

Protect your interests and rights:

1. Deal only with registered/licensed intermediaries.
2. Deal with intermediaries with proven track record or those with goodreferral from friends and relatives.
3. Be truthful about yourself and declare material facts.
4. Never be persuaded to sign on blank forms or anything you don’t understand.
5. Never be persuaded to lapse an existing policy to buy a new life policy.
6. Ensure that you understand the products you are buying.
7. Read the policy benefits and terms carefully, and compare them with other similar products.
8. Shop around to get value for money.
9. Buy only what you need and what you can afford.
10. Ask for sales materials, for example the sales illustrations, product pamphlets or customer fact find form (for life products only), and keep these documents safely.
11. When in doubt, always ask for more information from the intermediaries or seek clarification from the insurance company or takaful operator that offers the insurance or takaful products.
12. Ask for a receipt as the proof of premium payment and keep it safely.

Basic conduct of insurance or takaful intermediaries

When dealing with insurance intermediaries, you can expect certain standards in their professional conduct in handling your insurance needs. For instance, the intermediary is expected to:

• Present his/her Agent’s Registration Card to you when requested (applicable only for insurance agents). A Takaful agent whose registration has been approved by the Registrar of Takaful Intermediary has an Authorisation Card with all his or her relevant details.

• Exhibit good knowledge of the products and services offered by the insurance company or takaful operator. (In addition, insurance brokers and financial advisers are expected to exhibit good knowledge of products available in the market).
  

• Make an effort to understand your insurance or takaful needs and assist you in the choice of insurance or takaful products and services.

• Explain to you clearly the nature of information required in the proposal form and also the importance of disclosing material facts.

• Explain clearly the main terms and conditions of the proposed insurance contract or takaful plan so as to help you understand what you are buying.

• Draw attention to any restrictions and exclusions applicable under the proposed insurance contract or takaful plan.

• Follow up and provides continuous service to you, such as renewal of policy and provide updates on relevant new products.

• Provide assistance when you are making claims against the insurance company or takaful operator.

Source : http://www.insuranceinfo.com.my/learn_the_basics/dealing_with_intermediaries.php?intPrefLangID=1&

Read more...

Are You Covered?

We take care of our prized possessions including our home and our car. We even insure them because we don't want anything to happen to them. So why is it that most people fail to apply that same level of care and concern towards themselves? Towards their loved ones?

Of course, we don't expect bad things to happen to us, but life is unexpected. Insurance cannot make the future more predictable, but it can at least be there when you and your loved ones need it most.

Step 1: Think

S:What policies do you have? Have you taken any insurance for yourself or does your employer provide you with life and medical insurance? What about your family? Your spouse? Your children? Are they protected?

J:If no, then it's time to do some serious thinking about it. Think about how you're protected, and about what you need to protect.

Step 2: Do

Before you rush off and buy a policy just for the sake of having insurance, do some research. Not all policies are suitable for you. Different policies have different product features, benefits, conditions and exclusions.

Do your research and choose the type of policy that best suits your needs and life stage. Protect yourself. Protect your loved ones and get the most out of your money.

Can your family survive without you?

We don't like to think about it, but our time on earth is a limited gift. You might have prepared something to ensure that your family is well taken care of after you're gone, but have you done enough? Life insurance and family takaful can provide them with additional financial security, so that they can live comfortably after your passing. And with policies like investment-linked insurance and child education plan, your family may have the comprehensive protection required.

Do your loved ones need medical care ?

Injuries, sickness and disease can strike at any time without warning. Medical care hinges on getting treatment to the patient early and quickly. With the high price of modern healthcare, the treatments that can save the life of someone important to you shouldn't depend on how much you have. Don't let a life hang in the balance because of your finances. Let medical and health insurance or medical and health takaful take care of the hospitalisation and medical expenses.

Have you saved enough for your retirement?

You can't wait for the day when you can finally give it up for a well-deserved rest. However, even with the rate of inflation holding steady, money just doesn't go as far as it used to. Your life savings won't go as far as it used to either, and it's not fair to you. You deserve better.

Retirement annuity allows you to invest your money for retirement, so that in your golden years, the money which you worked so hard for all your life, will finally work for you.

Is your home protected?

Your house is possibly the biggest financial responsibility you will ever face, and there's no doubt you want to keep it safe; safe from natural disasters, accidents and theft. Home insurance and home takaful help protect your investment, your home and some of your belongings in it.

Do you own a vehicle?

If you own a motor vehicle or ride a motorbike, you are required by law to have motor insurance. But take the time to understand what motor insurance and motor takaful can do for you. See how the policies can protect your vehicle and help you in repairing and recovering your vehicle when accidents or crime happens.

Are you a frequent traveler?

When you are overseas, sometimes even life can go wrong, no matter what you do. Lost passport or getting hurt in a foreign country or worse. Travel insurance ensures that you and your belongings are secured and that you can always find a way home. Personal accident insurance and personal accident takaful gives you 24-hour worldwide protection, so you can be covered anywhere at anytime.


Source: http://www.insuranceinfo.com.my/learn_the_basics/are_you_covered.php?intPrefLangID=1&

Read more...

Types Of Takaful

The general takaful concept is you contribute a sum of money to a takaful fund in the form of participative contribution (tabarru’). You will undertake a contract (aqad) for you to become one of the participants by agreeing to mutually help each other, should any of the participants suffer any form of misfortune, either arising from death, permanent disability, loss, damage or any other such misfortunes as covered under the takaful you personally undertake.

The takaful protection plan is based on Shariah principles and offers many unique features to policy owners. There are two types of takaful businesses: family takaful and general takaful.

Family Takaful









The products under family takaful are:

• Family takaful

• Investment linked takaful

• Child education takaful

• Medical & health takaful

General Takaful









The products under general takaful are:

• Home takaful

• Motor takaful

• Personal accident takaful

Basic Principles of Takaful

• You must have a legitimate financial interest in the subject matter to participate in a takaful plan.

• A takaful contract is based on the principle of utmost good faith (trust), whereby you need to disclose all material information required.

• You can only recover your financial loss and not gain any profit as a result of a quantifiable loss.

• In determining the compensation, the takaful operator will identify the actual most important cause that brought about the loss.

• After you have been compensated for your loss, the takaful operator has the right to claim from any third party responsible for your loss.

• If a loss is covered by more than one takaful plans or insurance policies, the takaful operator that has made payment to you may call upon other takaful operators or insurance companies to contribute proportionately to the payment.

Source: http://www.insuranceinfo.com.my/learn_the_basics/types_of_takaful.php?intPrefLangID=1&

Read more...

Types Of Insurance

All too often we hear about various types of insurance policies without really understanding what they are and more importantly, what they protect. The truth is, there are two main types of insurance, namely life insurance and general insurance which covers different aspects in your life.

Life Insurance

Life insurance is an insurance coverage that pays out a certain amount of money to the insured or their specified beneficiaries upon a certain event such as death of the individual who is insured. This protection is also offered in a Family takaful plan, a Shariah-based approach to protecting you and your family.

The coverage period for life insurance is usually more than a year. So this requires periodic premium payments, either monthly, quarterly or annually.

The risks that are covered by life insurance are:

• Premature death

• Income during retirement

• Illness

The main products of life insurance include:

• Whole life

• Endowment

• Term

• Investment-linked

• Life annuity plan

• Medical and health

General and Insurance

General insurance is basically an insurance policy that protects you against losses and damages other than those covered by life insurance. For more comprehensive coverage, it is vital for you to know about the risks covered to ensure that you and your family are protected from unforeseen losses.

The coverage period for most general insurance policies and plans is usually one year, whereby premiums are normally paid on a one-time basis.

The risks that are covered by general insurance are:

• Property loss, for example, stolen car or burnt house

• Liability arising from damage caused by yourself to a third party

• Accidental death or injury

The main products of general insurance includes:

• Motor insurance

• Fire/ Houseowners/ Householders insurance

• Personal accident insurance

• Medical and health insurance

• Travel insurance

Source: http://www.insuranceinfo.com.my/learn_the_basics/types_of_insurance.php?intPrefLangID=1&

Read more...

Insurance and Takaful Made Clear

What exactly is insurance?

Insurance is the transfer of risk by an individual, such as yourself, or an organisation, such as your business, to the insurance company. You or your organisation will thus be known as the policy owner. The insurance company receives payment in the form of premium and will compensate you in the event of losses or damages sustained by you.

Takaful is a protection plan based on Shariah principles. By contributing a sum of money to a common takaful fund in the form of participative contribution (tabarru’), you undertake a contract (aqad) to become one of the participants by agreeing to mutually help each other, should any of the participants suffer a defined loss.

Both insurance and takaful have similar basic principles. For instance, the insured, such as yourself, must have a legitimate financial interest in the risk you are insuring, meaning you must suffer a financial loss when the insured event occurs.

You can also buy more than one policy or plan to protect a particular risk but in the event of loss or damage, you can only make one claim. The amount payable will then be contributed by the insurance companies involved. As such, you cannot profit from your general insurance policy or takaful plan. If you suffer a loss, you will be compensated accordingly and no more than that. You will be paid or ‘indemnified’ to the position you were in before the loss. However, if you wish to cover your life, you can buy more than one policy.

Your insurance or takaful contract is a contract of utmost good faith (trust). Thus, you as the policy owner need to disclose all material information required. If any of the relevant material facts are not disclosed, the policy may be invalid and you will not be protected against any loss or damage.

In addition, under the takaful plan, you can enjoy a share of the surplus from the takaful fund, based on a pre-agreed ratio if you have not made any claim during the year.

Where can i get an insurance or takaful product?

• You can buy an insurance policy or participate in a takaful plan

• Directly from insurance companies or takaful operators

• Through registered agents or licensed brokers
  

• From banking institutions that have bancassurance arrangements with insurance companies or takaful operators; and

• Via the internet

Useful pointers when buying an insurance policy or participating in a takaful plan

• Understand the policy or plan including the product features, conditions, benefits limitations and exclusions

• Ensure that the premium or contribution payable is affordable

• Ensure that the amount of coverage taken is adequate and suits your needs

• Ensure that all material facts are fully disclosed

• Deal only with registered agents/licensed brokers or directly with an insurance company or takaful operators

• Monitor the period of coverage and time for payment of premium or contribution

Source: http://www.insuranceinfo.com.my/learn_the_basics/insurance_made_clear.php?intPrefLangID=1&

Read more...

What is insurance?

Put basically, insurance enables those who suffer a loss or accident to be compensated for the effects of their misfortune. The payments come from a fund of money contributed by all the holders of individual insurance policies. In other words, individual risks are pooled and shared, with each policyholder making a contribution to the common fund. The contribution is known as the premium. Premiums are paid to insurers - these are institutions which accumulate the money into the fund from which claims are paid. The loss is in fact paid for by the policyholder making the claim and by all the other policyholders who have not suffered in the same way.

Insurers are professional risk takers. They know the probability of different types of risk happening. They can calculate the premiums needed to create a fund large enough to cover likely loss payments. Clearly, only a proportion of policyholders will require compensation from the fund at any one time.

So two important factors arise when calculating the premium. Firstly, the general likelihood that a loss will occur. Secondly, whether the particular policyholder is above or below average in risk.

Take three examples. In motor insurance a young person with a high powered car, or a driver with a long history of accidents will pay a higher premium than a mature and experienced driver with a modest saloon who has been accident free.

Similarly, the owner of a fish and chip shop will pay a higher premium for his fire insurance than, say, the owner of an office. The risk is greater, so the premium is higher.

Someone who is young, fit and in a risk-free job will find it easier to buy life insurance, and will pay lower premiums than someone who has a heart condition or is in a risky occupation.

Two kinds of Insurance

There are two different kinds of insurance - life insurance and general insurance. With life insurance you don't renew your policy each year. Instead, you agree to pay a fixed premium for a set number of years. In other words you enter a long-term commitment when you buy a life insurance policy.

What is the Difference?

General insurance pays out:

* if a car has an accident or is stolen;
* if a house catches fire or is burgled;
* if a holiday has to be cancelled;
* if someone is careless and damages other people's property.

Most life policies, on the other hand, pay out when an event happens;

* when someone dies;
* when someone survives beyond a specific date.

Anyone can buy life insurance but, of course, the premium will depend on your age, your health, and your occupation. Husbands and wives can insure each other's lives. However, you cannot insure the lives of other people unless you have a financial involvement in their life. This principle of insurance is called "insurable interest".

Insurable Interest

Insurable interest is a fundamental principle of insurance. It means that the person wishing to take out insurance must be legally entitled to insure the article, or the event, or the life. In other words, the happening of the event insured against, or the death of the life insured must cause the policyholder financial loss. Mr Smith would not be able to insure Mr Brown's house because its destruction would not cause Mr Smith financial loss. Similarly, you cannot insure the lives of other people unless you have a financial interest in the life being insured. The principle of insurable interest demonstrates the difference between insurance and a wager or bet.

General Principles

Other principles apply to all kinds of insurance.

* Insurance can provide compensation only for the actual value of property. It cannot cover the loss of sentimental value, for example.
* There must be a large number of similar risks so that the likelihood of a claim can be spread among other policyholders. It must be possible for insurers to calculate the chance of loss so that a premium can be set which matches the risk.
* Losses must not be deliberate and not inevitable. Clearly, you could not buy fire insurance for a house which was already burning nor life insurance for someone on his or her deathbed.
* Lastly, there are some risks which have financial implications so vast that they can be dealt with only by the state. These risks (mainly those arising from war or the major escape of nuclear or radioactive material) are normally not insurable.
* Insurance takes the risk away from people's lives and businesses. It brings peace of mind to the policyholder. In return for paying premiums the policyholder knows that, if the unexpected happens, financial compensation will be available from the fund of premiums.

Source: http://www.thesite.org/homelawandmoney/money/insurance/whatisinsurance

Read more...