Content
Part A The Basics of Insurance
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Content
Part C Life Insurance
Page
48
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PART A
THE BASICS OF INSURANCE
The arrangement works on the law of large numbers, by spreading the risk of loss faced by a specific
person or enterprise to all parties who pool their resources to pay for individual losses. The losssharing arrangement is called insurance.
Daily
expenses
In order to solve the problem, we can be based on the law of large numbers, that is, some individuals or
small businesses face losses across the collection of all resources (most people assume the losses of
the small number of people). The loss-sharing arrangement is known as insurance.
#1
#2
#3
#999
#1,000
Premium
RM200
Combined
Contributions
(Premium)
Claims
1000
x
Expenses &
Other Outgoes
RM 200
= RM200,000
Profits
RM200
Example:
If there is a total 1000 houses which is on the same price, each of the house worth
RM100,000.
The contribution from the 1000 house owners or life assured results in the creation of an
insurance fund of RM200,000.
The insurer uses this amount of money to pay for claims ,management expenses and other
outgoes such as commission, taxes, etc.
There is random or
chance occurrence
of loss
Claims
ii Mutual
agreement
(Contract)
Economic
institution
$
Common
fund
Insurer
iv
Risk insured can be
estimated at certain
degree of accuracy
Economic institution
Based on the principle of mutuality / cooperation
Objective accumulate funds to pay for claims that arise as a result of the
operation of specific risk
Only certain risks can be insured
against
Primary Function
Pay
premium
Insurer
i
Manages
ii
iii
Unfortunate
events/risks
Claim
Common
fund
Secondary Functions
Stabilization of Cost
Business enterprise can
avoid freeze capital to
provide financial
protection against losses
Stimulation of
Business Enterprise
Reduction of Losses
Secondary
Functions
Provision of Employment
for Many
Source of Capital
for investment
Means of Saving
Provision of Security for
Expansion of Business
Remove fears & worries
Life Insurance
A contract which pays an agreed sum of money on the happening of a contingency
(event), or of a variety of contingencies dependent on human life
General Insurance
All other forms of insurance business, except for life insurance
Bring financial relief to aggrieved dependents of insured people who may meet with an
untimely death
Bring financial relief in the event of property loss
Inculcate the discipline of savings amongst the working population
Provide other forms of insurance related services to the public
To be able to recognize the insuring needs of the clients
To provide the best possible advice to the client
Definition Of Risk
probability of loss
exposure to danger
the subject matter of insurance
Priori
Total numbers of possible events are known. E.g. dice
Empirical
Determine on the basis of historical data. E.g. Total Large numbers
Judgmental Based on judgment of a person predicting the outcomes.
Used when theres a lack of historical data
Hazard
A condition that increases the chance of loss
Peril
Cause of loss. E.g. Car accident
Loss
Reduction or disappearance of economic
value. E.g. Car damaged & bodily injury
Physical Hazard
A physical chance that increases the
condition of loss i.e. Poor mechanical
condition of car
Physical
Hazard
Moral
Hazard
Careless
driver
Moral Hazard
A character defect in an individual that
increases the
chance of loss.
i.e. Careless driver, dishonesty
10
Fundamental risks
Affects entire economy & a large number of people. E.g. typhoon, earthquake
Particulars risks
Affects individuals. E.g. injury resulting from road accident
Pure risks
Possibility of loss or no loss. E.g. risk of premature death
Speculative risks
Chance of either loss, no loss or gain. E.g. investment in stock market, gambling
Risk avoidance
Avoiding the property, person or activity that produce the risk.
Loss control
To reduce the total amount of loss.
Loss prevention reducing the frequency of loss.
Loss minimization reducing the severity or amount of loss.
Risk retention
Retaining of risks by an individual/organization. When risks are retained, losses incurred are
borne by the party retaining the risks.
Planned risks are retained deliberately.
Unplanned involves retaining of risks unknowingly.
Risk transfer
Transferring of risks to organization or individual.
Insurance contract protection of house by purchasing fire insurance.
Non insurance contract protection of defective products by entering into agreement
with manufacturer.
11
Evaluation
Selection:
Avoidance
Loss Control
Transfer
Retention
Implementation
Control
Financial value
Large number of similar risks
Pure risks only
No catastrophic losses
Fortuitous losses
Insurable interest
Legal and not against public policy
Reasonable premium
12
Subject Matter
Motor
Car, motorcycle
Marine
Ships, cargoes
Personal life
Life, limbs
Aviation
Aeroplanes, lives
Fire
Buildings, goods
Financial interest
Mr. As house
valued at
RM100, 000
Mr. A
Marine Insurance
Learning & Development Department, Life Sales & Distribution Division
At Claim
13
Material Fact
A material fact is a fact which will influence a prudent underwriter in deciding the acceptance of the
risk or the premium to be charged (e.g. health, occupation, family history etc. )
Utmost good faith is breached when a proposer who knows or reasonably expected to know a
material fact
Voidable
contract
1. Non disclosure
2. Concealment
Insurer entitle to
sue for damages
3. Misrepresentation
a) Innocent
b) Fraudulent
Repair
Cash
Reinstatement
Replacement
*Not Applicable to Personal & Life Insurance. Reason : Unlimited insurable interest
Learning & Development Department, Life Sales & Distribution Division
14
pay claim
Insured
Loss caused by
3rd party
3rd party
Condition :
Insurer A
Insurer B
Insurer C
Loss
15
Whose role is to indicate to the Muslim insurance company operations, to determine if it did
not raise any matters not been allowed by the ruling
Decisions of the Board, are based on "syura" principle, consultation and mutual consent, rather
than to the majority decision in mind
Back to the teaching that traditional insurance is a trading style, not in line with Sharia rules,
trading operations or investments relate to the following factors:
- Al-Gharar
- Al-Maisir
- Al-Riba
16
Tabaruk (Donate)
Participants make
aqad (agreement)
donation
Risk fund
Mudharabah (Trustee
Profit sharing)
contractual
Profit-sharing agreement
provider
of capital
entrepreneur
Types Of Takaful
Business
Family Takaful
General Takaful
1.
2.
17
Intermediaries
1. Broker
2. Agent
3. Financial Advisor
Buyer
1. Customer
Other Market Components Service Specialist i.e. doctor, engineer, marine and cargo surveyors, loss
adjustor, loss assessor, reinsurer
1. Seller
Life
Insurer
Composite
Insurer
Life
Insurance
General
Insurer
General
Insurance
2. Intermediaries
i. Insurance Agents
Define as a person who does all or any of the following:
18
Insurance Broker
Receive commission
Receive brokerage
Act on behalf on
principal
Registered & licensed
by LIAM or PIAM
Independent contractor
Registered & licensed
by BNM
Centralization
Decentralization
Schema
Benefit
Disadvantages
Service Delays
19
20
21
To circulate information,
to collect, collate and publish
statistics & other information
Relating to life insurance
Objective
To promote & represent
members companies &
the life insurance industry
To render advise
And assistance to
members companies
22
Objective
23
24
Be heard
Basic Rights
Redress
Basic goods
and services
25
Legal binding
agreement
Conduct
Surrounding
circumstances
ACCEPTANCE
Insurer
Counter Offer
COUNTER OFFER
Insured
ACCEPTANCE
Insurer
Consent
Yes, I agree
to the terms
of contract
Yes, I agree
to the terms
of contract
Insurer
Insured
Consensus ad idem
Parties to the agreement is of one mind
Consideration
pay premium
sum assured & benefit
Insured
Insurer
< 10
10 <16
>16
27
Defective
Contract
Voidable
Contract
Unenforceable
Contract
Void Contract
- Null from the beginning
- Invalid contract
- Not enforceable in court of law
- e.g. a contract which has no consideration
Voidable Contract
- Contract remains valid until the aggrieved party exercise the option to treat it void
- e.g. insured fails to observe the duty to disclose
Unenforceable Contracts
- Contract which are not being void and unenforceable called unenforceable contract
- It arise out of failure to comply legal formalities
- e.g. Marine contract which is not in writing
28
Principal
Intermediaries
Agency
Distributor
Relationships
Principal
(Manufacturer)
Independent
Tie
Intermediaries
Agency
(Distributor)
Broker
Agent
(Retailer)
Consumers
29
Implied Authority
Usual Authority
His express and implied authority carry with them a usual authority
Apparent Authority
Ratification
30
Express
appointment
Relationship of
insurer &
insurance agent
Implication
of law
Statute
Premium warranty
Insurers for non life business required to enforce Premium Warranty ruling.
This is to ensure that insurer receives the premiums within from inception
of cover, Failure to do so, the agents contract will be cancelled.
Cash before over
Premiums must be paid before motor insurance cover note or policy is issued.
Failure for agents to remit payment within 7 days will result in agents being
penalized. Penalty for breach is RM 500,000
31
Planning and
Controlling
Functions of
The Marketing
Department
Selection of
Distribution
Channel
Promotion
Product
Development
Pricing
Personal Selling:
Product knowledge
Market knowledge
Selling techniques
32
2. Information
search
4. Purchase
3. Evaluation
of alternative
policy
5. Closing
the sale
4. Handling
objection
3. Conducting
the sales
interview
33
Policyholder
service
Policy register
After
sales
service
Mode and
methods
of payment
Premium
notice
Premium
receipt
Grace period
Premium Notice
Usually send out a Premium Notice three or four weeks before due date
Send Premium Notice Reminder if the premium is still not pay two to three weeks after
due date
Grace Period
A term of contract, due premium shall be paid on the specified in the policy
Usually30 days from the due date
34
No obligation from
either party to renew
Not
renew
Policy end
Renew
Insurer issues
renewal papers
Insured sends
premium to insurer
Receives confirmation
of renewal
35
Up to date
register
Serves as
Official
Record
Policy
Register
Maintain
minimum
Information
Kept copy
in file
36
37
MHI is designed to ease the financial burden caused by adverse changes in health.
Administered through the Accident and Health Department or Group Insurance Department
of an insurance company
Comprises medical expenses insurance, critical illness insurance, disability income insurance,
hospitalization cash benefit insurance, and products that provide some benefit or
compensation in the event of ill health
Insurance interest
Utmost Good Faith
Proximate Cause
Indemnity
Contribution
Subrogation
MHI involves risks management -- through the pooling of resources from all policyholders
MHI policy may pay for more than one claim in the same period of insurance
Currently, all MHI sold in Malaysia must comply with guidelines JPI / GPI 16, which is issued by
BNM on 24 December 1998
On 5 May 2003, JPI 12/2003 entitled Minimum Standard on Product Disclosure and
Transparency in the Sale of Medical and Health Insurance Policies Business was issued.
Explanation to Customers
Specific Disclosure Requirements
Premiums
38
Indemnity policies
It places the insured in the same financial position as before the occurrence of the insured
risk, subject to maximum limits of the insured amount
Example: Hospitalization and Surgical Insurance
2.
Benefit Policies
It pays a pre-determined sum of money if an insured event occurs during the policy period
Examples: Hospitalization Cash Benefit Plans, Critical Illness Insurance and Disability
Income Insurance
Lifetime limit
Inner limits
Deductibles
Panel of hospitals
39
40
Individual Policies
Premium are based on age-banded and increase with age
2.
Group Policies
Policies issued to groups of three or more persons
To pay for treatment cost of disability, subject to the limits and conditions stipulated in the
policy
1.
Anesthetist's Fees
Surgeons Fees
Post-Hospitalization Treatment
Ambulance Fees
Some Other Extended Coverage for Hospitalization and Surgical Insurance:
41
Cover a wide range of medical care charges with few internal limits and a high overall
maximum benefit and may take the following forms:
Supplemental Major Medical Insurance
It is an extension to a basic H & S policy. Payment is 80% of the incurred expenses,
20% being borne by policyholder
Comprehensive Major Medical Insurance
Similar to a basic H & S policy. Incurred expenses exceeding the agreed deductible
are payable in the event of claim. It also called as charged policies in Malaysia. It
pays the actual amounts charges by medical providers. It imposes Per Disability
Limits and Overall Annual Limits
Excess Major Medical Insurance
It is sold as a top-up of a major medical insurance policy. It is available in US are seldom
sold in Malaysia
42
A process of assessment and selection of risks, and the determination of premium, terms and
conditions
To ensure that sufficient funds will be available tp pay claims, the insurer has to: Guard against anti-selection
Charge a premium that commensurate with eh risk assumed
11.2 Anti-Selection
A situation where more sub-standard risks are accepted for insurance, resulting in a less
favorable underwriting result
Occur when an applicant who knows that he/she has a very high probability of loss submits a
proposal for insurance
Medical Factors
Medical history and current physical conditions that may cause disability or result in
medical expenses
2.
Financial Factors
To determine the amounts and level of appropriate insurance coverage required for disability
income insurance.
3.
Occupational Factors
The likelihood of occupational injury helps to determine premium rates. Occupational
disability resulting from minor impairment is a factor in evaluating disability income
applications
4.
43
1.
Medical History
2.
3.
Family History
Morbidity statistics have not shown family history to be important except in specific instances
4.
Financial Factors
It is a prime consideration in underwriting disability income coverage
5.
Occupational Factors
Morbidity rates vary considerably according to a persons occupation. These rates reflect the
hazards inherent in the occupation, the stability of the occupation; and the amount of recovery
time needed by people in that occupation to resume their normal duties
Typical Occupational Classification Schedule has:
Class 1 Least hazardous. E.g. executive, administrative or clerical duties
Class 2 Require more physical activity than class 1.
E.g. second hand car dealers or restaurant owners
Class 3 Light manual duties or skilled work is involved. E.g. electricians, plumbers
Class 4 Require heavy manual duties or where there are accidental hazards.
E.g. construction workers & agricultural laborers
44
Application form
Agents statement
Medical or Paramedical examinations
Attending Physician Statements (APS)
Hospital medical records
Declined
Decline the acceptance of risk, maybe due to dangerous occupations or hobbies or poor health
Exclusion Endorsements
Extra premiums (Premium loadings)
Change of benefits (Modified Benefits)
45
Non-cancelable Policies
Must be renewed at the stated age and stipulated premium
Some policies may be issued on cash-before-cover: basis, or subject to the 60 days premium
warranty.
A grace period may be allowed for premium payment for:
Guaranteed renewable policies
Conditional renewal policies
Non-cancelable policies
46
Proposal Form
Policy
Endorsement
Renewal Notice
Proof of MHI Premium - tax relief
Section 149 of Insurance Act 1996 provides for the control by and the lodgment of proposal forms,
policies and brochures of insurers with BNM
Disclosure Statements
Declaration
Signature
Heading
Exclusions
Conditions
Policy Register
A practice of insurers to issue policies in a standard form covering certain specific perils and
excluding others
47
A practice to include a note advising the insured to disclose any material alterations in the risk
Usually issue a renewal notice one or two months in advance of the date of expiry
RM3,000 is allowed to be deducted from taxable income of an individual tax resident of Malaysia, as
an additional deduction for deduction or medical insurance premium payment.
48
The policyholder has to inform insurer in the writing of any claim within 14 to 30 days
Claimant is required to furnish the insurer with all supporting documents to substantiate the
claim
The proof of loss provision requires insured to furnish written proof of loss on a claim within a
stipulated time frame.
Failure to furnish the proof of loss within the time provided shall not invalidate for any claim
Proof of loss is usually submitted together with claim form supplied by the insurer
The questions on the statement are designed to elicit only the information needed to
determine the insurers liability under the policy
49
Usually there are two ways in which rejections are handled. They are:
13.7 Disputes
Disputes between claimants and insurers generally may involve one or two issues:
Resolved through
Arbitration
Most general insurance have arbitration clause
Disputes relating to quantum
Speedier and less costly
Hearing is in private rather than in an open court
Mediation Through FMB, a centre for the resolution of a board range of retail consumer
complaints against all financial institution.
Limit for cases to be mediated by FMB:
i. RM200,00 0 all motor & fire insurance classes of business
ii. RM100,000 others
iii. RM5,000 claims by third party claimants
50
PART C
LIFE INSURANCE
51
Tax
Expenses
Interest rate
Mortality
Death rate
Expenses
Return on investment
Tax
Insurable Interest
Utmost Good Faith (Uberrima Fides)
Indemnity
Contribution
Proximate Cause
Subrogation
Premature death
Temporary disability
Total permanent disability
Retirement benefits
Financial guarantees
52
Life Insurance
General Insurance
Ordinary
Life
Home
Service
Group
Insurance
Sum
Assured
@ Term of
coverage
Non Participating Contract
(mainly for protection)
Learning & Development Department, Life Sales & Distribution Division
@ Term of
coverage
Participating Contract
(mainly for saving)
53
Term Insurance
Level
Decreasing
Renewable
Convertible
No evidence
of good
health
Convert to
Permanent
Insurance
Sum
Assured
Usually For
Mortgage
Protection
Sum
Assured
@ Term of coverage
Level Term
@ Term of coverage
Decreasing Term
54
Premium
Continuous payment
@ 100
Premium
Limited
payment
@ 100
Cash Bonus
@ 100
$ $ $ $ $ $ $ ..
55
Anticipated Endowment
Essentially an endowment policy with installment cash payment (survival benefit) by
insurer to policyholder, payable at regular intervals during the term of the policy
Provides an additional benefit upon death during the term of the policy
Sum Assured
@ Term of coverage
$ $ $ $ $ $ $ ..
4)
Annuity
Defined as periodic payment made during a fixed period of time or for the duration of survival
of a designated life
i) Single Life Immediate
PURCHACE MONEY
Periodical payment start immediately for the reminder of the life time of a name life
@ Term of coverage
$
56
PURCHACE MONEY
@ Term of coverage
$
PURCHACE MONEY
Deferred
@ Term of coverage
$
$
57
PURCHACE MONEY
@ Term of coverage
$
PURCHACE MONEY
@ Term of coverage
$
58
PURCHACE MONEY
Commence
@ Term of coverage
$
PURCHACE MONEY
@ Term of coverage
$
59
Pay out a lump sum on the diagnosis of any of a number of specifies diseases
7) Investment Linked
Benefits on maturity are not fixed. It related to the value of underlying investments held in the
account of the policy holder
8) Group Insurance
To insure lives in large group at low rates of premium and often without medical examination
Cover all or a certain classes of employees of a company
A master policy is issued to the employer and certificate of insurance issued to each employee
Experience rating is used for scheme more than 2000 lives, premium is adjusted upwards or
downwards for subsequent years pending on claims experienced.
Requirements
Min 10 Employees
Full
Time
Age
16-55
Contributory
Plan
Non Contributory
Plan
75% all
eligible
employees
100% all
eligible
employees
9) Supplementary Benefits
Disability
Accidental death
Sickness
60
Childrens Insurance
i. Protected Educational Policies
Life Insured = Parent & Beneficiary = Child.
Benefits are payable on the child attaining specified age mentioned in the policy
ii. Childrens Deferred Assurance
Life Insured = Child
Cover commence after the chosen vesting age of the child and no evidence of health require. Death
occur before vesting age, only refund premium paid. Normally, non-par before the vesting
age.
22.4 Takaful
A method of joint guarantee among a group of people in a scheme to share the burden of unexpected
financial losses that may fall upon any of them
Family Takaful
General Takaful
61
Tabaruk (Donate)
Participants plan to make an aqad (agreement) to deposit as donation into the risk fund
Family Takaful
Saving/
Investment
PA
(Mudharabah)
Takaful
Company
Contribution
Donation
PSA
:
:
:
:
:
:
:
:
:
:
(Tabaruk)
62
Contract
An intangible thing, a legally binding agreement between the concerned party
Policy
A written document which embodies that agreement, is in concrete form
30 days (or one calendar month) are allowed as days of grace for payment of premiums
Grace Period
(Full Coverage)
Eg:
18/9/01
Effective date
(yearly mode)
18/9/02
No Payment of
premium
Policy lapse
18/10/02
2) Cash Value
The value which attach to a policy after premiums have been paid for a certain minimum
number of years
Sum Assured
@ Age
30
33
63
The value which the policyowner can receive after surrender (sell back) the life policy that has
been in force for 3 years or more
Sum Assured
@ Age
30
33
4) Policy Loan
Loan are generally granted up to 85% or 90% of cash value. Any unpaid loan and interest will
be deduct from the proceed. Interest on the loan fixed by the company
Sum Assured
@ Age
30
33
64
1)
The non-forfeiture provision comes into play only after the policy has acquired a cash value
Section 156 of the Insurance Act 1996
- A life policy has been in force for 3 years or more shall not lapse or be forfeited by reason
of non-payment of premiums but shall have effect subject to such modification :
i) To the period which the policy is to be in force;
ii) The benefits receivable (non-forfeiture provision); or both
- Premium unpaid after the grace period and is automatically paid by utilize the cash value
- Interest will be charge on the premium loan
- Provide continuation cover
- No evidence of insurability is require in bringing the policy to its original status (repayment of loan)
- No an intention to provide the assured to obtain life insurance cover at minimum cost
2)
Paid-up Policy
Sum Assured
@ Age
65
@ Age
Reinstatement Condition
Eg:
18/9/01
Effective date
(yearly mode)
Grace Period
Policy lapse
18/9/02
18/10/02
No Payment of
premium
X
reinstatement
66
Date of issue
Or reinstatement
<1 or 2 year(s)
Refund Premium
>1 or 2 year(s)
Full sum assured payable
2)
Occupation & Dangerous Hobbies
Additional premium may be charge. (Example: Policeman, Racingetc)
3)
Foreign Travel & Residence
Most policies do not impose any restriction on travel or foreign residence
4)
Incontestability Clause
The insurer cannot deny liability on a policy after 2 years of its issue on the grounds of
misrepresentation or non-disclosure alone unless he can prove fraudulently by insured
Contestable
Date of issue
Or reinstatement
<2 years
Incontestable
>2 years
Identity card
Birth Certificate
International Passport
School leaving Certificate
Baptism register
Service record
67
Age
Premium
40
6000
30
3000
2)
Overstated Age
Excess premium could be refunded
The sum assured and bonuses could be proportionately increase with those of the true
age (pro-rated)
- Example:
Sum Assured = RM100,000
Actual age = 30
Understated = 40
Age
Premium
40
6000
30
3000
68
1)
Absolute Assignment
Does not have any right with the assignor except paying the premium
Assignor
Assignee
2)
Conditional Assignment
Assignor
Assignee
Address
Name
Mode of payment
Sum assured
Beneficiary
Term of insurance
Class of policy
Policy altered to paid-up
Removal of extra premium
69
Personal Habits
Age
Sex
Social Status
Occupation
Family History
2)
Geographical Location
Avocation
Marital Status
Ethnicity
Underwriting
Primary U/writing
(Agent)
Non-Medical
Proposal Form
Standard Lives
Financial
U/writing
Medical
U/writing
Moral Hazard
Physical Hazard
70
Commencement of Risk
Scenario 1:
Proposal is submitted without initial
premium & is approved by insurer
Scenario 2:
Submit proposal together with initial
premium, binding premium receipt is
issued and pending for approval
71
Loading Letter
A letter indicating an extra loading is issued to the proposer as a counter offer
Pay Premium
Offer
Insured
Sub-Std
Insurer
Accept?
Loading Letter
Counter Offer
< 6 months
Application
Date
72
All life
insurance
premiums
+
Approved
Fund
(e.g. EPF)
Taxable
Interest income gains from settlement option is taxable.
73
Mortality
Investment Return
Expenses
Tax
Gross Premium = Net premium* + Loading for Expenses + Loading for Profit &
Contingencies
Varying according to age and term
Participating policies enjoy the right to share in the profits of the operations of a life insurance
company in the form of bonuses
The premium is slightly higher than non-participating counterparts and this additional
premium is known as Bonus Loading
S/A
Premium
Par
Policy
Bonus
Non-Par
Policy
Basic S/A
Non-Par
Premium
Age
Bonus
Loading
Age
74
Adequate
Equitable
Competitive
Profitable
Consistent
75
A capital adequacy framework for all insurers under the Insurance Act 1996
Requires insurer to maintain a capital adequacy level commensurate with its risk profile
Insurer is require to compute its Capital Adequacy Ratio (CAR), which measure the adequacy
of the capital available in the insurance & shareholders funds of the insurer to support its
Total Capital Required (TCR)
76
Mortality
Interest
Expense
Miscellaneous
Compound
Reversionary Bonus
Cash Bonus
Maturity or
Terminal Bonus
Payable upon maturity or claim and policy has been in force for
more than a specific duration. (e.g. 10, 15 , 20 years)
Interim Bonus
Guaranteed Bonus
As bonuses are guaranteed, such policies are strictly nonparticipating policies with the sum assured increasing
automatically each year at a predetermined rate.
77
Agents Report
agents impression about applicants habit, appearance character and financial status
Previous Records
27.2 Endorsements
The standard policy documents are often endorsed to take into account the differing aspects
of individual circumstances and needs (e.g. Change of plan, sum assured, include/delete
riders, covert and etc.)
Can be done either at
Time of issue of policy
After issuance of policy
78
Chapter 28 Claims
28.1 Death Claims
Proof of Death
- Death certificate
- Coroners report
- A statutory presumption of death, say in case of a person who has gone missing > 7 years
- Medical certificate by last medical attendant
- Certificate showing that death occurred at sea
- Certificate evidencing the death of service personnel or war death
- Deed of assignment
- Letter of administration issued by court
- Probate of will obtained from court
- Policy effected under section 23, Civil Law Act, money would be paid to the trustees
> RM100,000
Full amount
RM100,000
Letter of Probate
or Administration
Letter of Probate
or Administration
79
Chapter 28 Claims
Section 161, Insurance Act 1996
Claim upon death
paid < 60 days
Sum Assured
Policy
document
Proof
of survival
Proof of
age
Discharge voucher
completed by policyholder
2)
POLICY HOLDER LIFE INSURED
Life Insured
Proof of age
Proof of survival
Policy document
Discharge voucher
completed by
policyholder
Policyholder
Deed of assignment/
other title document
Simple statement prove
that the insured is alive if
he is unable or not
available to sign the
survival certificate
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Chapter 28 Claims
Settlement Options
Due to Natural
Causes or illnesses
Documents required:
Medical certification by doctor after
disability
Life assured Identity card
Claim Form
Due to Accident
Documents required:
Medical certification by doctor after
disability
Life assured Identity Card
Claim Form
Police Report
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Example 1:
Example 2:
Date of birth:
Date of birth:
Answer:
Step 1:
Step 2:
Step 3:
Answer:
1995 / 05 / 20
- 1965 / 03 / 21
____30 / 01 / 29
: 30
: 30+1=31
Step 1:
Step 2:
Step 3:
1995 / 01 / 01
- 1965 / 03 / 21
___29 / 09 / 10
: 29
: 29+1=30
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Answer:
Step 1:
Step 2:
Step 3:
1996 / 12 / 31
- 1965 / 03 / 21
___31 / 09 / 10
: 31
: 31+1=32
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Make it known that he is agent of which insurance company, with Produce Registered
Intermediary Authorization Card
Ensure the policy proposed is suitable to the needs and not beyond the resources of the
prospective policy
Give advice only
Treat all information as completely confidential
Make comparisons with other types of policies, make clear different characteristics of each
policy
Render continuous service to the policyholder
Twisting
To discontinue a policy or to have a policy made paid-up and replace a new one in another company
or the same company
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