Choosing an Insurance Policy

Here are some things to consider when choosing an insurance policy for you:

  1. Know your budget to have an insurance.
    Even with USD60 per month you could already have insurance policy including your fixed deposit.
  2. Know the insurance protection that you want.
    Are you at risk to involve in an accident at your workplace or at the road? Are you exposed to critical diseases because of your lifestyle and your imbalance diet?
  3. Know the amount of insurance protection that you want.
    Is your goal is to get high return of benefits after the first 3 years due time, high return of benefits on your retirement day soon or your protection when you retires early or your mandatory retirement and most importantly your hospitalization cost protection?
  4. Know who you should protect.
    Who do you love the most? Youself? Your kids? Or your family?

Contact insurance companies to know what fits you the best.

14-02-2010 by Sorli

category: Insurance Basic

Insurance and Men: Reasons Why Do They Need One

Insurance and Men.If we view the present scenario, there are still many of us does not own an insurance policy yet. Regardless of what the package core whether it is life insurance, medical insurance, education insurance or investment insurance, the interest to have an insurance is still ‘blurry’ in the society’s eyes.

This situation obviously shows the practice of having insurance still new due to lack of education and awareness of its importance of being protected by an insurance package. Let alone the living environment in this era which offers challenges whether from the economy, security and health aspect.

For some peoples, insurance is perceived as burden. This is because they are forced to allocate a portion of their salary to pay premium, whereas its return and benefit is not known when it can be taste. When some incident or disaster happens, it is then when the insurance policy interest and importance can be benefited.

The Money Saving Factor

‘Money saving’ or ‘money keeping’ factor always become a reason to refuse having an insurance policy. For some people, the premium payment which is in average as low as $80, $150 or $300 per month is perceived as burden. This form a mentality in society which often avoids each time they are visited by an insurance agent.

Men which become the hope of their family and as a chief are the key individuals who need to be protected by insurance. It is a gamble of his life and put the bad luck on the man’s shoulder solely, but it is in fact a long term protection and effect which will be enjoyed by them in their hard time.

In overall the society is still not yet exposed to the benefits of having an insurance policy. Men which become the head of the family do not see their interest need to be protected. This indirectly put the fate and future of their family and beloved ones in risks.

Imagine should a man, who is unprotected by insurance and involved in an accident, does just the hospital treatment is enough for him whereas he could affords to receive further treatment in a private hospital and received financial assistance incentive during the treatment period.

13-02-2009 by Sorli

category: Insurance Basic

Insurance Is Not a Financial Planning

The announcement of Bank Negara Malaysia to control and enforce the licensing of Financial Advisor under the Act Insurance 2005 has confuses the consumers and Malaysians in general.

Financial planner / investment advisor now had already licensed by Securities Commission and is been under Securities Industry Act 1983 (Section 14).

Insurance vs Financial Planning.The matter had already being enforced since 31st of August 2004. Is it by the proclamation by Bank Negara to gazette financial planners under its jurisdiction will develop the newly introduced and young industry in Malaysia?

Is it the works done by the Securities Commission are unsatisfactory? Or is there any power struggle in enforcement happens?

Financial planning is one the most important knowledge and industry in life. Malaysians basically still never have been given enough exposure on this matter.

Insurance vs Financial Planning

Recognizing insurance as financial planning is not a precise thing. Insurance is one of the tools to financial planning but it is not financial planning.

There are seven key aspect in financial planning which covers business (cash flow), banking, property, stock/equity, insurance, tax and estate legacy (estate planning).

What is insurance actually? Insurance is a way of risk transfer so that losses are not fully bear by its policy holder. This is the insurance basic.

Insurance categorized into four types namely life insurance, health and inability insurance, general insurance and trade insurance. And the newest it is associated with investment.

However insurance is never have been fully made as only way of financial planning before except by insurance sellers (agent) who undeniably want one thing which is it high commissions.

The public should be made fully known about the total commission paid to insurance agents. Transparency factor should be made as an obligation condition to every insurance agent and financial planner.

The monthly installments (premium) paid to the insurers by his policy holder in fact is 55 percent (of the amount for the first two years) is used for commission payment. By other words, actual cost of a life insurance policy has been shared by the sales representative assigned to sell the insurance product.

Financial planner is not a product seller. As a financial planner his objective is to make a starting plan for the customer. Customer interest is their priority.

Each financial planner dictionary said that purchase of insurance is only to shift the risk of death and accident. It is not for investing.

Why should you buy an insurance?

Why should buy a life insurance if its return is estimated at around three to four percent only? An investment should give more returns than that. Therefore, it would be vital that this matter is explained to the general whether they want a risk transfer or want a return of investment / profit.

Even though, risk transfer through insurance is also very important. The matter should be explained clearly. For example, treatment in hospital will not cost cheaply. Therefore an insurance purchase is something which is needed.

Promotion of Financial Planning

Financial planning industry need better promotion and infrastructure than what there are today. Addition of guardian or lawmakers will be inconvenienced for this industry to grow.

In the United States for example where this financial planning knowledge is origin, there is no one rule except the monitoring of professional bodies association on it. They prefer openness principle (transparency).

All charges, products and implementation plan are explained fully to every customer. Public are convinced and know that there no hoarding or deviation can be done by certain parties.

Too much law complicates the growth of idea and creativity which is a necessity in this industry. It is true indeed, law is needed to control some irresponsible parties from manipulating the condition but this industry need many more Malaysians to understand and involve their self in it.

With many numbers of financial advisors and its knowledge is expanded to every level of society, parties which are irresponsible of course will not be able take advantage on it.

If seriously integrated efforts are carried out it is not difficult and be possible for at least this financial planning knowledge to spread to all level of society.

This matter is more important that having two enforcement authorities which could confuse people and investors especially in the financial industry of Malaysia.

30-01-2009 by Sorli

category: Insurance Basic

Types of Insurance: Auto Insurance

Auto insurance coverage is an obligation for all vehicles used at road. It is to ensure that drivers are protected against liabilities which should an incident occur. A usual type of auto insurance are the Third Party Policy and Comprehensive Policy. Other protection can be obtained with accordance to the policy holder choice.

What are a Third Party Policy and a Comprehensive Policy?

A Proton Perdana V6 car.

Third Party Policy – if you drive a car and hit a car that belongs to B, under the third party insurance, your insurance company only will be responsible to pay compensation on injury, death of driver B or B car passenger and also to B’s car only.

Comprehensive Policy – If the same thing happens and you hold a comprehensive insurance policy, you are being protected from liability that exist as result of death or limb injury of the driver or passengers and car of B and also damages which occurred on your car. The insurance company will also pay compensation to you if your car is lost, stolen or destroyed due to fire.

08-01-2009 by Sorli

category: Auto Insurance, Insurance Basic

Types of Insurance: Life Insurance

There are various types of insurance to protect you from all type of risk such as life insurance, auto insurance and fire insurance. All types of insurance including auto insurance aims of helping you to reduce or accommodate financial loss due to occurrence of a disaster.

Therefore, an insurance policy actually is a contract between an insurance company and a consumer party that compensation will be paid if disaster or accident mentioned in the policy do happen. However, compensation only will be made depending on the paid premium.

Life Insurance.

Life Insurance

The purpose of life insurance is to provide financial security to the children and other house dependents who are under a worker liability if he died. Term life insurance provides insurance coverage for a fixed number of years. If a policy holder passed away in the period, his family will get the sum insured. But if the policy holder does not die in the time period set, he will not get anything from the insurance company. The privilege of term insurance is the premium paid is lower compared to other insurances.

For other insurance type such as endowment life insurance, its policy is for a particular time period. The policy holder will receive the sum insured at the end of the fixed-term.

However, if the policy holder passed away before the fixed-term, his family deserved getting payment on the policy. For a whole life insurance policy, policy holder pays premium for lifelong. When the policy holder passed away, his family will receive the insured sum entirely. If the policy holder hands over his policy after 20 or 30 years, before his death like those stated in policy, he will get a certain amount of money back – namely the sum he had paid plus a fractional of the insurance funds investment group profit.

The insurance type that will give benefit the most is a policy that can provide maximum coverage with a minimum cost.

Guide for Buying an Insurance

  • Make sure your insurance agent is registered with the insurance association of your country.
  • Read insurance policy from your agent about conditions which included in policy and check the explanation with the insurance association or friends which might has taken the same policy.
  • Be sure that all benefits that will be acquired are clearly stated in the agreement.
07-01-2009 by Sorli

category: Insurance Basic

What is Insurance Exactly

What is insurance exactly?

Insurance is risk transfer of one individual like you, or an organization, such as your company, to the insurers. You or your company shall be known as policy holder. Insurance company will receive payments from you in form of premium and if you experience any loss or damage, the insurance company would pay compensation to you.

What is an insurance.

Insurance basic principle

For example, policy holder (you) must have legal interest on the goods or life that you insure. This mean, you would bear the financial loss in case damage or loss happened to life or property that you insured.

You do not need to purchase more than one policy or plan to protect your property. If you own more than one policy, you can only make one claim if any loss or damage happens. The payment amount that can be paid will be contributed by the involved insurance company. As such, you cannot make profit from general insurance policy or plan. If you experience loss, insurance company would pay appropriate compensation or you will be put at same state before loss happen. However, you can buy more than one policy to protect your life.

Contract of insurance is on full principle of absolute trust. As such, you as policy holder or plan must disclose all necessary important information. If you fail to reveal that information, your policy or plan may not be valid and you will not be protected on any loss or damage.

Buying Insurance Policy and Essential Guide When Buying Insurance Policy

You can buy insurance policy at:

  • Directly from the insurance company
  • Through registered agent or licensed brokers
  • Via banking institutions which possess bancassurance arrangement with insurance company
  • Through the internet

Essential guide when buying insurance policy:

  1. Understands your insurance policy including product features, conditions, benefit and its exemption limit.
  2. Ensure that insurance premium which will be paid is reasonable.
  3. Ensure the protection amount is enough and suitable your necessity.
  4. Ensure all important facts are fully disclosed.
  5. Deal by registered agent/licensed brokers or directly with the insurance company.
  6. Monitor the protection period and time to pay the premium.
01-01-2009 by Sorli

category: Insurance Basic