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

Why Money Education Is Important to Have a Good Life

We want our children to enjoy the good life. But what is the good life? Is it having lots and lots of money? A good marriage? An enjoyable job?

A credit card.Whatever your definition of the good life though, money plays an important part in it. However, there are many people who believe that the good life is possible only with the 5 Cs – credit card, condominium, car, cash and club membership. This definition of the good life is not only very materialistic, it is also incorrect.

There are those who end up being miserable because they went heavily into debt to obtain the 5 Cs.

Getting into debt and being unable to get out of it, is one of life’s greatest traumas. Why? Because it can lead to you losing your property, your reputation, peace of mind and a happy family life.

One of the reasons that people often get into debt is because they feel they have to follow what they see as ‘cultural’ requirements. Although they cannot afford it, they spend their savings and borrow huge sums to celebrate their children wedding or to spend during festivals like Christmas, Eidul Fitr, Chinese New Year and Deepavali. Spending too much on such occasions is really unnecessary. There is no need to impress friends and relatives this way.

A condominium.Another problem is that people feel that they have to own the goods and gadgets associated with ‘modern living’ even though they may not be able to afford them yet.

Social vices may also lead many people down the path of debt. They get addicted to alcohol, smoking, gambling or drugs.

Not surprisingly the debt trap can also lead to breakdown in family relationships. How many parents have had to disown their children to avoid being harassed by illegal money lenders who want repayment for loans taken by their children?

The good life is therefore only possible when you, not the banks, are in control of your life. You cannot be said to be in control when you being chased for payments for the car or credit card purchases.

The debt trap can be a vicious circle from which it is very difficult to break away. With the money going off to pay the debts, there will be no savings for the future and you may find yourself working harder but not getting anywhere.

Your child should therefore be taught to manage her money wisely so that she can save and invest for the future. To encourage her to save, make sure that she puts aside a certain sum of money every month upon receiving her allowance. Save first, then spend, instead of spending and saving whatever left over. There may not be any left over.

The good life is of course much more that being about money but money undeniably plays a significant role, for without it we cannot survive.

An important lesson to impart to our children is that to enjoy the good life we have, to be in control of our life and that comes when we are in control of our money.

29-01-2009 by Sorli

category: Money, Money Education

The Difference between RON92, RON95, RON97 and RON99

Many said that RON92 oil is the older oil, only suitable for older cars or for cars that uses carburetor only. There are also some that said that RON92 oil will make the engine dirty and also said that that RON92 oil is less powerful compared to RON97 and RON99. Before you make any false assumptions, let us see what the real meaning of RON is.

RON stands for Research Octane Number. Octane number or octane rating refers to the gasoline ability to withstand auto ignition (knocking) inside the engine. Higher octane number refers to higher ability of the oil to fight auto ignition. In other words, it means that RON95 is harder to ignite compared to RON92.

Filling gasoline into a car.Different vehicles are designed to be use with different octane number of oil. Higher octane number oil is basically designed for high performance vehicles such as sport vehicle and racing vehicle. Why is that so? This is to avoid premature ignition of oil inside the engine because of auto ignition, which happens before the spark plug ignite the fuel. This phenomenon is known as knocking. Knocking is not wanted because it reduces the performance of vehicle.

The right usage of octane number based on design and adjustment of engine will maximize the performance and effectiveness of the vehicle. Modern vehicles are equipped with knock sensor which enables it to adjust its combustion timing automatically according to the oil octane number to avoid knocking or premature ignition of oil.

Not all vehicles require high octane number petrol. You can check your vehicle fuel requirement inside the guide book of your vehicle or you can simply check the minimum Octane Rating at the back of the fuel lid cover of your vehicle. Most cars can still use RON92.

Higher RON number does not means that it is more powerful. It means that it is harder to ignite. It is also cost you more.

17-01-2009 by Sorli

category: Auto Insurance, Auto Things

Secret That The Insurance Company Don't Want You To Know

People with lawyers get bigger auto insurance settlement when they involved in an auto accidents. Want to know why? Watch the ads video below.


Adjusters want to settle cheap, quick settlements are not always best, a computer may decide your compensation, and people with lawyers get bigger settlements.

09-01-2009 by Sorli

category: Auto Insurance

Auto Insurance Proposal and Cover Note

A proposal form is an application form to be filled in by you, if you are buying insurance from an Insurance Company for the first time. It will generally ask for your information on the vehicles and to be insured, including their values, your personal data and also details of your insurance history, etc.

Cars in traffic jam.The insurance company base their decision on whether to accept or reject your proposal and what terms to impose on the information you provide in the Proposal Form.

As the information given is crucial to your Insurers, you have a Duty of Disclosure to provide all facts material to the insurance. Please read the “Important Notice” appearing on the Proposal Form.

You are required to sign a declaration that the information that you provide is the truth and that it shall form the basis of the contract.

What Should You Do When Filling an Auto Insurance Proposal Form?

When filling an Auto Insurance Proposal Form, you must state all facts material that you know. These facts material will affect insurance company whether they will receive or reject your proposal or charge you additional fee. In Life Insurance, facts on your health and occupation are facts material.

What happens if insurance agent makes mistakes or fills untrue information?

Even if the matter occurred not caused by your mistake, Insurance Company may refuse the contract. Due to this, you should always read what is written or fill meticulously before signing the auto insurance proposal form.

What is a Cover Note?

After you pay premium, an agent will issue a cover note as a temporary protection before the insurance company decide whether to cancel or receive proposal you. It will expire after that note ending date or when your proposal is rejected or when a policy is issued by the insurance company.

Make sure you get one cover note copy with complete information of everything on auto insurance coverage such as sum insured, premium, excess and protection period after paying the premium to an insurance agent.

Contact your insurance company if you do not receive your insurance policy after 30 day.

What should you do when considering buying a policy?

1. Always read and understand the policy terms and proviso.

2. Do not buy an insurance policy only because the push from insurance agent. Do only when you know the policy and if you need it. However, under law, you must own an auto insurance.

3. When you have your policy you must always pay the premium payments specified.

4. If you take too many policies, the insurance company probably will doubt it and they may cancel your policy.

What should you do if you involved in an accident

Make a report to police in 24 hours time on the accident.

Notify your insurance company in writing as soon as possible all the details about damages or losses which occurred by including the police report. The reasonable time period to report to the insurers is within 14 days. However, for cases which involves limb injury; where a policy holder is hospitalized due to accident, they should report to insurance company once being able to do so. If there is any case, other party charge you and you accept a summons to court, do not plead guilty but notify the matter to your insurance company. If you do not do so, the insurance company may never be responsible in defending your interest when there are claims on you or claims for the damages of others vehicle.

Final question on yourself

Do you own an auto insurance policy or life insurance policy? Have you read the terms and conditions of the policy? Do you know that you are tied down to various terms and conditions?

by Sorli

category: Auto Insurance

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

Optimum Driving Tips – Get The Correct Driving Position

Good car and safe road will not be meaningful if the driver himself is not prepared. As always being expected during festive seasons, road congestion are something that cannot be avoided, and the driving stresses are everywhere. So these tips perhaps will be useful for you to practice.

Front view of dashboard of a car.

Before Driving

Before starting your journey, make sure your body is prepared. Get enough sleep and rest, and make sure you are not too full or too hungry.

Avoid from going back to your hometown in rush, such as just after taking breakfast, or trying to catch a dinner in your village.

If you drive while fasting or dieting, take suitable vitamin to supply enough energy.

Interior view of car and its seat.

Driving Position

Ironically, the correct driving position is never been practiced at driving school. Even more, most driver do not know what is the correct driving position. Perhaps many think that their driving position depends to the comfort factor, for example there are drivers who topple down their car seat too low until it makes their neck not getting enough rest and support when driving.

The right driving position depends on suitable distances in car for each of the body parts. The seat must be configured accordingly to a suitable height, where the level of driver’s eyesight has to be at center between the dashboard and the steering wheel.

When wearing the seat belt, it must be wear at the shoulder, and then it flows through the center of the chest to the seat belt’s buckle. If the seat belt happens to flow on your neck area, it means that your seat height is wrong.

While seat belts at the neck are similar to the hanging death sentence if an accident happen.

After getting the suitable height, adjust the seat platform to a position where your foot does not need to be at fully straight to apply the brake on.

Make sure that when the brake is pressed at its maximum, your knee still has a little bent. This is to provide an impact reactance if an accident impact occurs.

As you have got the right position and height, then adjust your hands position. Straighten both of your hands and put them on the top of your steering wheel.

At the correct position, the top of wheel steering will touch the wrist area of your hands. Adjust the steering wheel height according to your suitability. Do not make it too low until it reduced your legs movement limit or too high until it forces you to drive in a ‘hanging hand’ situation.

The correct hand position when driving is by holding the left and right part of the steering wheel, not at the top, below or driving with a hand under your chin.

If your journey is more than four hours, stop to take a short break. When at stop, do not switch off your car engine immediately, wait for around one minute to ensure that the lubricant in the engine returns to its reservoir and the moving parts of the engine is idle enough.

Stretch your muscles, make a light exercise on the neck, hand, foot and back. If your eyes feel too sleepy, take a nap to revive your energy. If there is other who can drive, it is better to take turns driving in about three or four hours for each driver. This would give enough rest and energy to each driver.

When Driving

If driving in the correct position, you will not waste your energy to accommodate your body weight at wrong position.

Hence, your driving capacity is greater. However, a frequent driver’s carelessness factor is the lack of attention while driving.

The enemy of good driving is lack of control by drivers because of drowsiness. When being drowsy and fatigue, the sensitivity to the surrounding is lowered and the ability to estimate is also lowered. So when a dangerous situation happens, such as when the vehicle is out of control, the driver will become more quickly to panic.

Driving with friends is one of the ways to enable constant communication and no interruption of driver’s concentration because of fatigue.

Chatting can provide energy at the same time can avoid fatigue which becomes the source of drowsiness. Once in a while when driving, stretch your hands, body and legs muscles out. Try to change your driving position several times. Fatigue is caused by slow blood flow because of static sitting position.

31-12-2008 by Sorli

category: Auto Things

Things That You Should Do When Involved In an Auto Accident

Nobody wants an accident to happen on their self. Even though, however prepared and careful we are, if it is unavoidable, what can we say. More, if the road accident involves our vehicle with others.

May be these following tips can help a little if you or a person you know involved in road accident:

  • Be calm and do not be panic. This is the most important thing before we take our next action.
  • If there were those who are injured, contact for ambulance or 911 (or any emergency number at your place) for help.
  • If there is no injury, move the vehicles from the traffic flow to a safe place, if it is possible.
  • Note and write other drivers’ name and addresses involved.
  • Take the model and registration number of other involved vehicles, write them.
  • Take the witnesses name and address, if there is any.
  • Make a rough sketch of the accident and the involved vehicles location just before and after the crash. Picture or photo on the accident can help police’s and authority’s investigation.
  • Exchange information on each others auto insurance company name / operator.
  • Do not discuss on who is guilty. This may create trouble in handling your claim.
  • If your vehicle needs to be tow, make sure that your vehicle will be sent to the right workshop. Contact the hotline number of your auto insurance company / operator to obtain information about the right auto workshop.
  • Report the accident to the police immediately.
  • Report the accident to insurers / insurance operator immediately, although you may have no intention of making any claim. The involved third party in the accidents might make an insurance claim from your insurance company and this can cause you to loose your NCD (No Claim Discount).
  • If you make an insurance claim, be sure to completely fill the insurance claim form and include any related additional information. If you have any doubt, get advice from your insurance company / operator.

Always be calm and do not panic.

30-12-2008 by Sorli

category: Auto Insurance

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