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  Cancelling your policy
  A life policy is a long-term commitment. If you cancel your policy, you will not receive the total amount of premiums that you have paid to-date. This is because the surrender value is usually less than what you have paid for. Ensure that you carefully discuss it with your existing insurance company should someone asks you to cancel your policy.

Cancelling your existing policy is not in your best interest because:
  • Your premiums will be higher since you are older.
  • Your cash value will build up slowly.
  • The 2-year period of contestability will begin again.
  • Your existing policy may have more favourable provisions than the new policy.

  Category : Life Insurance
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  Managing your life insurance policy
  • Always remember your premium due dates to avoid a policy lapse.
  • Always insist on a receipt as proof of payment.
  • Ensure your age is stated correctly in the proposal as the life insurance company will pay an amount equal to the insurance that the premium would have bought at the correct age.
  • Review your insurance needs regularly for adequate cover.
  • Keep your policy in a safe place until the life insurance policy money is received.
  • Keep basic details of your policy such as the type of policy, policy number and names of nominees in a separate place.
  • Always ask your life insurance company when in doubt of anything related to your life insurance policy.
  Category : Life Insurance
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  How to protect yourself against fraud
  • Beware of unregistered insurance agents offering you their services. Before buying insurance, contact your insurance company or takaful operator or Persatuan Insuran Am Malaysia (PIAM), the Life Insurance Association of Malaysia (LIAM) or the Malaysia Takaful Association (MTA) to ensure the agent is an authorised agent.
  • Avoid paying premiums in cash. Choose to pay for premiums by cheque or money order made payable to the insurance company or takaful operator instead of the agent.
  • Make sure you receive a written policy after payment of your first premium.
  • Immediately examine your policy or plan to ensure the coverage is what you have requested for and that the premium amount paid is reflected in the cover note/policy.
  • Request for a receipt as evidence of payment of premium.
  • Do not sign blank insurance or takaful applications, or insurance or takaful claim forms.
  • Be suspicious if the price of insurance or takaful seems suspiciously low compared to other insurance companies or takaful operators.
  • If you are involved in an accident, be careful of strangers who offer you quick cash or urge you to deal with specific workshops, medical clinics or law firms.
  • Insist on detailed bills for repairs and medical services rendered and check for accuracy.
  • If you are being defrauded or have / are being persuaded to take part in a fraud, discreetly contact your insurance company or takaful operator, PIAM / LIAM / MTA or the police. Provide as much information as you can – name(s) of the people involved, amount(s), date(s) and type of fraud(s).
  Category : Insurance Fraud
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  Don’t be a victim to policy twisting/churning
  Policy twisting/churning occurs when policyholders with cash-value policies are persuaded to convert their coverage to another policy through:-
  • Surrendering or lapsing your existing policy and using the premium moneys to buy a new policy
  • Converting an existing policy to reduced paid-up insurance with a lower sum assured
  • Converting an existing policy to an extended term which reduces your premium payments for the existing policy

Drawbacks from changing policies:
  • Costly conversion due to the increase of premiums as you get older
  • The new policy will have a new waiting period, thus beginning another two-year period of contestability
  • Loss of specific features in your policy due to health and age
  • Surrender value from cancelling your existing policy will be much lower than the total premiums you have paid.

If you already have a cash value life policy, be wary of unprofessional agents who would persuade you to surrender or convert your policy. This is because insurance agents receive the highest commissions from the premiums paid by you in the first year.  

Professional agents will always place your interest first before theirs. However, if you feel that it is beneficial to convert your policy, always write to the insurance company and get a written confirmation letter from them stating that the conversion is not detrimental to you.
  Category : Consumer Alert
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  Useful pointers when buying an insurance policy or participating in a takaful plan
  • Understand the details of your policy or plan including 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 operator.
  • Monitor the period of coverage and time for payment of premium contribution.
  Category : Buying Tips
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  Tips on buying life insurance
  •    Be sure to buy from a licensed company through an authorised agent.
Buying life insurance is essentially buying future financial security for your family.  Licensed insurance companies are listed in Bank Negara Malaysia’s website or should you need to find out more, contact the Life Insurance Association of Malaysia (LIAM).

•    Shop around for rates
Seek premium quotes and proposal from more than one insurance company and compare them. Be sure to compare among similar policies as not all insurance policies have similar benefits.

•    Understand the scope of cover, terms and conditions of the policy
Make sure you understand all provisions such as the terms and conditions as well as exclusions in the policy and if necessary, ask for explanations from the insurance company. Be careful if you are told that bonuses or dividend scales are guaranteed as these depends on the performance of the fund in which your premiums are invested in.

•    Avoid unwanted additional coverage
Do not be pressured into buying “packaged” products that may contain fixed coverages that you don’t need. However, you may opt to add additional coverage or rider of your choice at additional premium which is better value for money.

•    Make sure the life policy recommended is right for you
Carefully study your agent’s recommendation and ask for a point-by-point explanation to make sure the policy suits you.

•    Always check the date the insurance becomes effective
The date the insurance goes into effect may be different from the date the company issues the policy. Be sure to ask your agent when the insurance becomes effective.

•    Fill in your application carefully
Never sign blank proposal or application forms. Ensure all information filled in your application is complete and correct to avoid delays or even denial of claims.

•    Make sure premiums are paid to your insurance company
Make sure your cheque or money order is made payable to the insurance company and not to your agent and insist for a receipt immediately as proof of payment.

•    Read your policy when you receive it
Life policies have a “free-look” period of 15 days from the date you receive it. Therefore, use this opportunity to make sure this is the right policy for you.

  Category : Life Insurance
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