Purchasing Life

What is your need
Structure a life-insurance plan to meet your circumstances. For example: A single person might need less life insurance than a couple or a couple with children.

Buy from authorized agent
Use the services of trained insurance professionals. Check with LIAM (Life Insurance Association of Malaysia) to ensure that an agent and company are licensed to do life insurance business.

Get to know your agent
An agent isn’t permitted to be the beneficiary of a policy sold to you by the agent — unless the agent is a relative. Nor is the agent permitted to misrepresent any aspect of the policy being sold or a policy you already own, or encourage you to put incorrect information on an application.

Decide what type of policy you want
Term, whole life, universal life or a combination. Make sure you calculate your premiums for the life of the policy, as it is possible to pay more in premiums than the policy’s face amount.

See whether the policy has an accelerated-benefits feature
Policy provision that lets the policyholder, under certain conditions, collect part of the death benefit before he or she dies.

Be alert to any promise
That you won’t have to pay premiums again (the vanishing-premium pitch). Also, make sure you are aware of any “surrender” penalties.

Don’t sign any application
That isn’t completely and accurately filled in and dated. Make a copy for your files.

Study the policy
As soon as you receive it, to make sure it’s exactly what you ordered. Many companies offer a “free-look” (or “right to review”) provision; take advantage of it.

Review the rules
Only the policy holder may cancel the policy. If premium payments are not being made, the insurer generally sends a notice before cancellation.

Make out the premium payment
Make payment to the insurance company, not the agent.

Remember to pay
A failure to pay your premium will cause your policy to lapse or, potentially, to be terminated.

Review your policy periodically
Insurance needs change at different periods of life.