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. 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.
There are many type of insurance such as :
Medical and health insurance
Retirement annuity
Travel insurance
House owner insurance
Investment link insurance
Life insurance
Personal accident insurance
Investment link takaful
Motor takaful
Medical and health takaful
Personal accident takaful
Family takaful
Houseowner takaful
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.
Tips Buying Insurance
Be sure to buy from a 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 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.
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 for the effective date of your insurance.
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 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 assess the policy to make sure this is the right policy for you.