Tokio Marine Breakthrough

The barrier to buying life insurance online seems to be fading, with U for Life Sdn Bhd chalking up RM165 million in sum assured within four months after it began offering such services in May.

“There is certainly a need to increase the life insurance penetration rate in this country, and I’m confident our online insurance platform can contribute towards realising that objective,” said general manager Iskandar Ezzahuddin.

He said Malaysia’s first Internet insurance platform provider has proven more people are shifting from the traditional way via agents to a paperless, simple and instant policy buying processes with just a few mouse clicks.

The encouraging response from the Malaysian public has convinced the firm to invest up to RM5 million over the next 12 months to create awareness on the importance of life insurance and also to boost purchases on its platform.

Aside from basic term-life insurance, U for Life also offers add-on coverage for critical illnesses such as cancer, heart attacks, stroke or heart bypass surgery – where the customer will be given the option to receive a 25% advance payment of coverage.

“This is an optional advanced payment, where you are covered for the ‘BIG 4’ critical illnesses.

“If you are diagnosed with any one of these critical illnesses, before age 65, Tokio Marine will pay 25% of your cover in advance for your treatment. The remaining cover will be payable upon your death or total permanent disability.”

Iskandar said there are plans to offer medical and health policies too on the online platform.

The sole insurance product now offered charges premiums from RM9.85 monthly for RM100,000 coverage.

The yearly renewable life insurance plan covers till the age of 75 with a RM500,000 maximum sum assured.

Who Is Bilqis Hijaz

Dancer Bilqis Hijaz is being charged under Section 14 of the Minor Offences Act 1995 for dropping 4 yellow balloons with "democracy", "free media" and "justice" on them at an event attended by the Prime Minister and his spouse.

Who Is Guo Yuanyuan

Guo Yuanyuan, a bride-to-be (a 25 year old nurse from Dalian Central Hospital), stopped her wedding photo shoot to save a man's life while in her wedding dress. 

Guo saw a man aged around 60 who suffered from a heart attack after swimming in the ocean being carried back to the beach. She then rushed to the scene and tried resuscitate the man, who was not breathing. Witnesses saw Guoperforming mouth-to-mouth resuscitation and chest compression for more than 20 minutes.  

 Unfortunately, Guo's heroic efforts were in vain as the man did not regain consciousness and eventually died

Joint Life Insurance

We all care for our loved ones and want to protect them till eternity. But none of us know what the future holds and how soon the time may come when we are no longer around to support and provide for them.

 It is becoming increasingly important to be doubly insured where the working couple gets covered under one plan helping them plan their future in a better way.

Do people know this category exists at all? With the changes in family dynamics and better education facilities, a lot of women are now equally contributing to the household expenses. However, unfortunately it has been observed that, women don’t take most of the financial decisions, and this could be a reason why most working women even today are not adequately insured.



 Joint Life category on a whole is a very comprehensive class, as it offers to cover two lives under one single policy. Most policyholders who name their wives as nominees in the policies, gives them a good chance here to give name them as a joint policyholder.




A joint life insurance policy for a couple will prove to be more advantageous than an individual life policy. It helps save premiums, ie: cover two lives under one policy, charging only one premium.


Features
Joint life insurance policies usually pay out benefits on death of either of the partners after the death of either of the policy holders.. In the past, when people wanted to save on premiums, they often get or draw life insurance to the key person or main breadwinner of their family. However, that situation is fast becoming obsolete since both spouses are now working. Both of them are exposed to various risks, both of them need to be protected from uncertainties of life. Therefore, there should be some kind of measure to ensure that whatever may happen to either of them, there is ample cover for each.


Advantages
There are various types of joint life policies available in the market. One should buy the policy that suits their needs. Some policies pay out all benefits on death of either of the spouses, whereas some pay benefits in parts after the death of first spouse and so on. Most policies available are money-back or endowment kind of policies. This is the most unexplored category and life insurers should innovate and build further up on this as it is the need of the hour




Most of us choose life insurance policy which is affordable. Joint policies are a convenient way of covering couples. The cost of insuring two people instead of one is cheaper, which in turn affects the price of the policy itself. It is important to remember that the cost and coverage levels that come with joint life insurance cover can vary based on the provider and the plan you choose, as family dynamics and lifestyles are changing. If only one of you has life insurance cover, the peace of mind is only one way, as if the unprotected person dies first the surviving partner gets nothing. However, if you have joint life insurance cover, both parties are protected, so no matter which party passes away first, the other will get a payout to ensure financial security for the family.




A joint life insurance policy has a reasonable payment option that should never be underestimated or passed over. The policy can be more beneficial and an advantage to young couples who are just starting their life together. The payment received upon the death of the first partner is very significant in comparison to the amount invested in the policy. In all instances, joint life insurance is less expensive than an individual life insurance plan.. Even if the other person stays at home to look after the kids, it is usually worth having some cover for them as if they were to die, childcare costs could be a significant burden.




Apart from these benefits a joint insurance policy usually provides financial assistance upon diagnosis of a critical illness. Since this situation can cause a lot of stress that may affect your relationship and your family, it is always wise to be prepared for such serious problems that can affect a household in a very negative way as early as possible. A joint term life insurance is a wise investment in future security and financial stability.




It is a very crucial decision to choose your life cover out of various types available. It depends on the duration of your need; it can be until you retire or for a certain period of time only, say 10 or 20 years. One should also consider whether the benefit is indexed with the inflation or not. Also if there are any hidden catch to it, are there any exclusions and restrictions. In order to see these things, you can educate yourself by dong a little research, ask the help of an insurance expert, and finally, read the Product Disclosure Statement of your policy where all the details can be found.

Life Lesson 101

Life insurance policies are their own special breed. Unlike car or homeowners insurance policies, they don’t come up for renewal each year, so when you buy one, you’re typically making a long-term commitment of 10, 20 or even 30 years. That’s why it’s important to do your research before you buy life insurance, and that includes asking your insurance agent the right questions. Start with these five if you’re in the market for life insurance.




How will you determine the amount of insurance I need?
Although you may have heard different “rules of thumb” about how much life insurance you need — for example, 10 times your annual income — the death benefit that’s right for you is a very individual calculation.




How long should I have insurance in force?
Once you’ve zeroed in on a policy amount, the next step is to pick a policy type: permanent or term life insurance. Permanent policies provide coverage for your entire life, whereas term life policies last only for the term you buy, such as 20 years. Term life insurance is the less expensive option. And, often, consumers don’t need lifetime coverage.




What happens if I can’t pay premiums?
If you are buying a term life insurance policy, the answer is simple — if you stop paying, you’ll no longer have life insurance coverage. But if you’re leaning toward permanent life insurance, you may have payment options in the future, after the policy has built up cash value. It’s up to policyholders to understand how the process works and how much cash value they can use for premiums, Tilp adds.




How can I expect my policy to perform?
If you’re buying permanent life insurance, you might already know that your policy will have a cash value component that your company will invest for you. But unless the returns are guaranteed, the future value of your cash value is anyone’s guess.




Can we solve any other potential problems with these insurance policies?
If you buy permanent life insurance, you might be able to fill other needs with your policy, like long-term care insurance or retirement planning. Some retirees use withdrawals or loans from their cash value to supplement retirement income, although most advisors agree that it’s a strategy that’s best for only those who are already maxing out other methods of retirement savings.




You might also be able to stretch your life insurance benefits with riders. For example, an accelerated death benefits rider can cover long-term care medical needs by paying out a portion of your death benefit if you’re ill or injured. You could also consider a waiver of premium rider, which pays your premiums if you’re unable to work.

Life Mistake

Making a mistake with your life insurance can hurt the loved ones you want to protect with the policy. But with careful planning and know-how, you can steer clear of common pitfalls and make sure your family is properly covered.

Here are 10 moves to avoid.

1. Relying solely on group life insurance

Group life insurance is a nice employee benefit, but the amounts employers provide—typically one to two times annual salary—usually aren’t enough for people who need life insurance. And in many instances, the coverage ends when you leave the company (or your company lapse the group policy), leaving your family without the financial safety net.

2. Procrastinating

Almost one-third of Americans think they need more life insurance, and 43% say they would feel a financial hit within six months if their family’s primary wage-earner died, according to the 2015 Insurance Barometer Study by industry groups LIMRA and Life Happens. Yet 54% of Americans don’t plan to buy life insurance in the next 12 months. If you need life insurance, it’s better to buy sooner rather than later. Life insurance rates increase as you age and develop health conditions, such as high blood pressure.

3. Buying a policy without shopping around

Life insurance rates for the same coverage vary widely by company. The price for a 20-year, $500,000 term life policy for a healthy 30-year-old nonsmoking man can range from $244 to $655 a year, according to NerdWallet research. Besides comparing prices, it’s also important to check the financial strength rating of any company you consider. You want the strongest possible ratings to make sure your company will be able to pay out an eventual death claim. Ratings agencies such as A.M. Best provide financial strength ratings.

4. Choosing the wrong type of life insurance policy

Term life insurance, which covers you for a certain number of years, is sufficient for most people who need life insurance, and it’s cheap. Permanent life insurance, such as whole or universal life, covers you for your entire life and features an investment component called cash value. The cash value accumulates gradually. You can borrow from the cash value or surrender the policy for the money.

5. Buying the wrong amount of coverage

To get to the right number for how much life insurance you need, add up your long-term financial obligations then subtract your current life insurance coverage, if you have any, and liquid assets such as savings. Obligations may include college tuition and other child-related expenses, the mortgage and other debts and your annual income multiplied by the number of years you’d want it replaced.

6. Naming a minor as a beneficiary

You might buy the policy for your children’s benefit, but naming them as beneficiaries on the policy when they’re still minors is a bad idea. If you die before they’ve reached legal adulthood, the life insurance company can’t pay benefits until the court appoints a guardian. That takes time and money for attorney fees and court costs.

Instead, name your spouse or other trusted adult as the beneficiary. Or set up a life insurance trust for your children, and name the trust and trustee as the beneficiary on your life insurance policy. You can stipulate how the money should be used.

7. Naming your estate as the beneficiary

Generally it’s better to name a trust, an organization or the people you want to receive the proceeds as beneficiaries. If you name your estate, your estate’s beneficiaries won’t receive the benefits until the legal probate process is finished, which can take months or even years if the estate is complicated. The life insurance money could also be subject to claims from creditors if you name your estate as the beneficiary. Normally, life insurance benefits are shielded from creditors when you designate a beneficiary other than your estate.

8. Owning the policy on your life insurance if you have a big estate

Being the policy owner on your own life insurance is something to avoid if you have an estate large enough to be subject to federal estate taxes. If your estate is worth more than this exemption amount, the life insurance proceeds could be included as part of the taxable estate. To get around the problem, you can have a trust purchase the policy, or you can give the money for premiums to an adult beneficiary to own and pay for the policy.

9. Keeping your life insurance policy a secret

Some people don’t like to talk about their personal finances, even with close family members. But somebody needs to know about the life insurance policy, so the beneficiary can make a claim. Besides a spouse or adult children, here are people with a good reason to know about your policy: a financial advisor, an estate planning attorney and anyone you appoint in your will as the personal representative or executor of your estate.

10. Forgetting to update beneficiary designations

Financial advisors recommend that you review your policies every few years to make sure they provide enough protection, and that you update beneficiaries if necessary. Make sure you review coverage after major life events, such as marriage, divorce, remarriage and having a baby.

The bottom line

By avoiding these all-too-common pitfalls, you can make sure your life insurance does what it’s supposed to do — provide the protection your family needs.

Angkasa Into Insurance

Angkatan Koperasi Kebangsaan Malaysia Bhd (Angkasa), via its unit, MyAngkasa Holdings Sdn Bhd (MHSB), will introduce its takaful insurance products through the Archipelago Insurance PCC Ltd.   
 
Extended Takaful Warranty, GAP Tafakul and Cashless PA Takaful – would be in the market next month. The Family Medical product would be introduced later.    Angkasa entered the insurance business as an agent and saw the great potential in the industry to help strengthen the cooperative business. The insurance business is also open to all co-op members who are interested to expand their own cooperative businesses. The insurance industry in Malaysia recorded gross written premiums of RM17.09 billion in 2014, an increase of 5.9 per cent compared to RM16.15 billion in the previous year

Who Is Tharman Shanmugaratnam

Singapore’s ruling party is celebrating a resounding re-election victory, thanks partly to its economic Tsar, an ethnic Tamil politician whose voter appeal poses an awkward question for its leaders: can a non-Chinese ever become prime minister? As the People’s Action Party (PAP) settles down to another five years in power, the guessing game of who will succeed Prime Minister Lee Hsien Loong has begun – and the name of Tharman Shanmugaratnam keeps coming up.

Life Is Love

Early in my career, a life insurance company asked me to hand-deliver a death benefit check to a widow who lived near me. The husband had been a business owner, and their livelihood depended on the continued success of the company.

On a beautiful, spring Georgia day, the couple’s daughter was married at the family home. After the nuptials, the reception was held in their backyard. While guests enjoyed the celebration, the bride’s father took a quiet moment to impart some wisdom for the journey ahead.

Just as he turned to say something to his daughter, he collapsed. The widow later told me that he had died immediately of a massive stroke.

Lesson of love
Years earlier, the patriarch had realized that money would be needed if something bad happened to him. He loved his wife and family and wanted to take care of them. That’s why he bought life insurance through his company.

When he took out the policy, the couple could never have guessed that years later one of their best days as a family would quickly turn into one of their worst. Nor could they know that because of this simple financial transaction, their tragic day emotionally wouldn’t be compounded by financial instability.

Because of his act of love, life insurance proceeds were available after his death to help pay for the wedding, provide his widow with an income and help the family wind down his business.

It turns out that this was the only life insurance death benefit I ever delivered. I’ll never forget the lesson. You buy life insurance because you love someone.

You owe it to them and to your company
Of course, love isn’t the only reason to buy life insurance. In business, there are many reasons.
Buying life insurance on a key person is one good one. You owe it to them and to your company.
If a key person dies, the company stands to lose financially. The company may have its debt called.

The loss of life may result in lost sales. Finding a replacement could be an expensive and lengthy endeavor.

And some of the company’s financial loss may be because the business owes that person’s heirs money. For example, if a key person owns stock in a closely held business, life insurance proceeds can be used to buy the stock from the key person’s estate.

Similarly, if that executive has a deferred compensation agreement with the company, life insurance proceeds can generate the liquidity needed to make good on the promised compensation.

Life For Your Children

Planning for your children’s future is an important part of parenthood, whether you’re saving for college or making sure they are taken care of if something should happen to you.

But what if you could help your child plan even farther into the future? Believe it or not, life insurance can help you do that. That’s because buying a policy on a child can provide him or her with a lifetime of benefits you might not be aware of. There’s no other type of asset that leaves children so well prepared for the future.

1. Lock in future insurability. Even if you don’t think you need a death benefit for your children now, someday your children may need one when they have a family of their own to protect. With certain policies, you can protect your children’s ability to buy more life insurance in the future at rates based on their health now. That means if they were to get a disease like diabetes, which would make it much more expensive or impossible for them to get life insurance in the future, they would be able to buy coverage based on rates as though they were healthy.

The underwriting requirements are far less stringent for children, so it’s often a lot easier to purchase life insurance when they are young. Policyowners can also buy additional coverage at specified points in the future without having another medical examination for underwriting purposes.

2. Accumulate savings. If you buy a permanent life insurance policy for your child, the policy will build cash value over time. That’s money that will grow tax free. You or your children could use that money as collateral for a policy or bank loan to pay for things like a college education, a wedding or a down payment for a house.

When you buy a policy for a child, “the premiums are much lower, and you have a longer time for the money to compound,” said Alves. “The amount initially invested in these policies is far less and the benefits far greater than if you waited to buy life insurance when you’re 30, 40 or 50.”

3. Set yourself up to have a financial talk. At some point, you will want to turn the policy over to your child, perhaps when he or she graduates from college. That’s a great opportunity to talk about the value of financial planning with your children at a time in their life when most young people aren’t concerned about the topic.

But seeing the tangible results of a policy that has accumulated a substantial amount of cash over a 10-, 15- or 20-year period can be an eye-opener for a young adult who has never thought about financial planning. You may even want to ask your financial planner to lead the discussion.

“It encourages a planning conversation at a younger age. It puts them well ahead of their peers who may not even talk to a financial planner until they’re in their 30s when they have a mortgage and kids competing for their dollars.

Managing Performance During Chaos

The life insurance industry is increasing the portion of time deposits in its investment portfolios and decreasing that of stocks after suffering a significant slump in investment returns amid the ongoing global stock market rout.

The Indonesian Life Insurance Association (AAJI) revealed Thursday that its members had decreased investment placements in stocks to 25.5 percent of overall portfolios in the second quarter this year from 29 percent in the same period last year.

Meanwhile, investment allocations for time deposits rose to 17.6 percent from 14.7 percent during the same period.That was after life insurers saw investment returns plunge by 103.4 percent to minus Rp 710 billion (US$49.96 million) in the April to June period this year from Rp 20.78 trillion in the corresponding period a year ago, according to the industry group’s report.

“The country’s economy, especially the stock market volatility, affects the decrease in investment returns. However, the life insurance industry still recorded positive growth,” AAJI chairman Hendrisman Rahim said on Thursday.

Indonesia’s six-year low of economic growth in recent quarters, international funds exiting emerging markets because of US economic improvement and China’s slowdown and yuan devaluation, have all contributed to a slump in the local stock market.

The Jakarta Composite Index (JCI), the main price indicator on the local stock exchange, has slumped 20 percent so far this year, the worst performing index in the region, with net foreign outflows amounting to Rp 6 trillion to date. The rupiah has also passed the 14,000 mark against the US dollar, a level unseen since the 1998 financial crisis.

The life insurance industry’s investment value amounted to Rp 320.51 trillion in the second quarter of this year, up 21 percent from Rp 264.97 trillion in the same period last year.Hendrisman expected that the stock market would soon rebound, hence increasing life insurers’ investment returns.

“Because investment value is high, it’s just the investment returns that have decreased,” he added.He also insisted that the industry had kept on growing despite the challenging economy, although total revenues dropped by 8.7 percent to Rp 69.97 trillion year-on-year (yoy) from Rp 76.6 trillion in the second quarter of 2014 because of the plunge in investment returns.

The AAJI is still optimistic about achieving a 20 to 30 percent total revenue growth this year.The life insurance industry recorded a premium income of Rp 67.82 trillion in the second quarter this year, a 26.6 percent increase from Rp 53.58 trillion last year. It was mostly driven by the new business premiums, which rose 28.2 percent to Rp 39.19 trillion this year.

“It means that people are more aware of the long-term nature of life insurance,” Hendrisman said. The surrendered claims growth has also decreased compared to the first quarter, as the panic stemming from the economic situation cooled off, according to AAJI alternative distribution canal department head Christine Setyabudhi. The surrendered claims rose 32.1 percent this quarter to Rp 19.63 trillion in the second quarter, but it was less than the 69.5 percent growth last quarter.

Meanwhile, partial withdrawals saw a 23.7 percent increase to Rp 10.69 trillion compared with a 61 percent growth on the first quarter.“It was driven by the policyholders’ need for cash. They got into a panic in the first quarter, but they began to calm down in the second quarter,” Christina said.

The number of policyholders has also increased by 22.9 percent to 57.02 million people from 46.41 million people last year.In a bid to further boost the still-low number of policyholders, life insurance firms have started to venture into micro-insurance for low-income people. “With the slowing economy, the industry needs to work even harder to educate the people about life insurance, but we are still on track, hopefully until the end of the year,” he said.

Partnership Insurance - Attractive Arrangement

QUESTION. I own a small business with a partner. We’ve been thinking about taking out life insurance policies on each of us so that if one dies, the surviving partner will have the money to buy the business from the other’s estate. Does this make sense to you?

ANSWER.  Arrangements like the one you are describing can make a lot of sense.
 

Screen Name or Email Now I remember!

Let’s begin with a clear understanding of the deal. Premiums will be paid to the life insurance company and the life insurance company will pay money to your beneficiary upon your death (in this case, your business partner).

 

With the money your partner receives, he/she will buy your interest in the company from your estate.

But let’s be clear, on average, your partner would have more money if, rather than buying life insurance on you, he/she wisely had invested the money that would have been spent on premiums.

If this were not true, the insurance companies would be bankrupt and they most assuredly are not. Indeed, life insurance policies are very profitable for the insurance companies.

Think about it. The insurance company takes the premiums and invests them. Assuming you live to your normal life expectancy, the insurance company will have X number of dollars at the time of your death.

Had the premiums been invested, your partner would have the same X number of dollars upon your death (assuming your partner invested as well as the insurance company).

If your partner invests the premiums, he/she gets all of the X dollars.

However, the insurance company cannot pay your partner all of the X dollars.

It first has to pay all of its operating expenses — including the salaries of its executives, back office and administrative personnel; the rent on its big office buildings; and the cost of its salesforce. After that, the company has to make a profit for its shareholders.

The company can only afford to pay your partner a number that is less than X — considerably less. For the company to remain solvent, the amount it pays your partner will be equal to X minus a pro rata share of the company’s costs and profit.

Assuming you achieve your full life expectancy and your partner invests as well as the insurance company, your partner would have more money if the premiums were invested rather than turning them over to the insurance company.

Therefore, on average, life insurance is a losing proposition — it has to be.

If you die sooner, the purchase of a life insurance policy is a better deal.

Conversely, if you live longer, the purchase of life insurance is a worse deal.

But on average, your partner will have more money upon your demise if he/she invested the premiums rather than giving them to the insurance company.

However, the reason for buying life insurance is to protect yourself and your partner in the event that one of you doesn’t live to your full life expectancy. The life insurance policies you are proposing to buy may be a very good idea to protect you and your partner from this eventuality.

There are other options you might consider. For example, each of you could agree to leave your share of the business to someone who would step in and fill your role in the company upon your demise.

Alternatively, you and your partner could agree contractually that upon either of your deaths the surviving partner would purchase the interest of the deceased partner from his/her estate with a note. The terms of the note would allow the debt to be paid over a period of time.

This would save the cost of the insurance. However, it would also mean that the decedent’s estate would be paid over time rather than in a lump sum.

If, upon the death of one of the partners, the other will purchase the decedents interest in the business from the estate, it is important to agree on how the purchase price will be set. This is true whether the purchase is to be made with a note or with the proceeds from a life insurance policy.

The life insurance policies you are proposing may be a very good idea. On the other hand, they will be a losing proposition on average.

Therefore, we suggest considering other options before purchasing the insurance. If none of these are viable, pursue the deal you described.

Internet Insurance China

Tencent Holdings Ltd will set up China's first Internet-based life insurance company with State-run firm CITIC Guoan Group, according to a report in Shanghai Securities News. The new company is positioned to be an innovative and light-asset online insurance firm, and may become the country's first Internet life insurance company if approved. 

Tencent and CITIC Guoan will hold identical stakes in the joint venture. The other shareholders include private enterprises such as Shandong Sanxing Group and Beijing Easy Home. The actual shareholding pattern for the joint venture is yet to be disclosed.

Wang Hao, former vice-president of Qian Hai Life Insurance Co Ltd, is to head the preparatory team of the new company that will be based in Beijing.

Tencent, which owns abundant high-quality user groups, could convert the users into policyholders, and master the detailed underlying data of these users.

It is noteworthy that although the company is planning to be an Internet life insurance firm, it will not totally give up other sales channels, people with direct knowledge of the matter said.

The new company will develop bank insurance and Internet selling simultaneously in the preliminary stage, while other sales channels, such as personal insurance and telemarketing with high costs, will be excluded.

"Such a channel strategy reflects how the company aims to achieve scale quickly in a very short period of time and hopes to make profits as soon as possible," an industry source said.

The company plans to achieve profit within five years of operations, and will launch property insurance and asset management companies when the time is appropriate, the sources said.

Life Update Malaysia

The life insurance industry remained steady in the first half of 2015 despite the challenging business environment, with new business weighted premiums declining only marginally, said the Life Insurance Association of Malaysia (LIAM).

According to LIAM, new business weighted premiums (100% of regular premiums plus 10% of single premiums) slipped by 0.7% to RM2.024 billion from RM2.040 billion achieved in the same
period last year.

This increase in protection is contributed by investment-linked plans, which experienced a growth of 9.6% and traditional plans with a growth of 3.5%. Toi attributed the growth in insurance coverage to the increase in consumer awareness.

According to a study commissioned by LIAM and undertaken by Universiti Kebangsaan Malaysia, the protection gap or underinsurance gap remains huge in Malaysia whereby the average protection gap for families whose primary wage earner does not have life insurance protection is RM723,000 per family. The amount is the estimated sum needed for the family of the wage earner to sustain their current lifestyle for at least five years on the demise of the wage earner.