Get A Life

Actually, there are five times you will not need life insurance. They are as follows:

1. If you are immortal. One of the benefits of life insurance is that it covers the financial loss of your heirs created by your untimely demise. Immortals do not face any risk of demise, untimely or not. Therefore, there will not be any potential financial loss for your family.

2. If you already have enormous earning assets. Even if you are mortal, your family will not suffer from any financial loss because they will already have a huge pile of cash and earning assets on which to subsist for the rest of their lives.

3. If you do not have the money to pay for life insurance premiums. Life insurance does not come for free and premiums can be prohibitive depending on the size of life insurance proceeds you want to leave behind.

4. You will leave behind a net estate exempt from estate tax. Life insurance can be bought so that your heirs will receive tax-free inheritance from you, which they can use to pay for estate taxes. If what you will leave behind in terms of net taxable estate is P200,000 or less, then your estate will be exempt from estate taxes.

5. You do not have heirs. If you do not have heirs and you just want to give back whatever is left of your estate to the government at the time of your death, then you really would not need to get life insurance.

But let us get real. You are by no means immortal. Much more, you do not know when you will be called from this life.

The majority of people, perhaps including you, still have to build up their wealth and throughout their lifetime at that. But this does not mean that you cannot leave financial assets behind or that you cannot spare cash for life insurance, particularly when life insurance companies have come up with ingenious ways of making premium payments cash flow affordable.

You just need to plan your life insurance well. Life insurance will be great in providing for the cash to pay estate taxes especially when the net estate to be left behind is in the form of illiquid assets like property.

People do not realize it but they are multimillionaires because of the enormous potential of converting their human capital to financial capital. This potential will make their net taxable estate exceed the P200,000 exempt limit.

Wealth is personal and people tend to want to control its distribution even at the point of death.

Again, life insurance is there not only to cover the tax on the right to transfer property but also to help create wealth that can be passed on to the next generations. And this wealth can be used to create more wondrous things for the betterment of life.

Life insurance is practical. You will always find a use for it.

Sharia Life 101

Introduction

Sharia-based insurance is governed by:

• Law 40/2014 regarding Insurance;
• the Ministry of Finance Regulation concerning the Basic Principles of Sharia-Based Insurance and Reinsurance Business Implementation (18/PMK.010/2010); and
• the Ministry of Finance Regulation concerning the Financial Health of Insurance Business and Reinsurance Business using Islamic Principles (11/PMK.010/2011).

Sharia-based insurance

Pursuant to Article 1(3) of Law 40/2014 regarding Insurance, a 'Sharia principle' is a ruling on a point of Islamic law by the National Islamic Council, Indonesia's recognised Sharia authority. The law also defines 'Sharia-based insurance' as a set of Sharia principle-based agreements between aSharia insurer and a policyholder that are intended to benefit the insurer and policyholder and protect the policyholder through the provision of:

• reimbursement for any losses, damages, costs, lost profits or legal responsibility following an uncertain event; and
• payment based on the death or life of the policyholder, the amount of which has been established and/or is based on fund management results.

Permitted business

Under Article 3 of Law 40/2014 regarding Insurance, Sharia insurers can conduct certain types of business only.

General Sharia insurers can conduct the following business, where is it based on Sharia principles:

• health insurance and personal accident insurance business; and
• reinsurance business for other general Sharia insurers.

Sharia life insurers can conduct the following business, where is it based on Sharia principles:

• annuity business;
• health insurance business; and
• personal accident insurance business.

Sharia reinsurers can conduct reinsurance business, where is it based on Sharia principles.

Basic Sharia principles

Under Article 2 of Ministry of Finance Regulation 18/PMK.010/2010, the following Shariaprinciples apply in Sharia-based insurance relationships:

• The insurer and the participant must agree to help and protect each other.
• The participant must contribute to the tabarru' fund.(1)
• The insurer must act as manager of the tabarru' fund.
• The principles of fairness, bona fide, parity, public interest and universality must be adhered to.
• The insurance cannot involve any prohibited elements, such as risk, gambling, interest, mistreatment, bribery or disobedience.

Supervision of Sharia insurers

As stated in Article 16(1) of Ministry of Finance Regulation 18/PMK.010/2010, Sharia insurers are supervised by the Islamic Supervisory Board, which comprises one or more Sharia experts appointed by its shareholders' general meeting based on the Indonesian Council of Religious Scholars' recommendation. The board must report on such supervision to the Financial Services Authority.

Conventional insurers versus Sharia insurers

According to the elucidation of Law 40/2014 regarding Insurance, the main difference between conventional and Sharia insurers is how they manage risks: conventional insurers apply the risk transfer method, whereas Sharia insurers apply the risk sharing method.

Sharia In Red Ocean

A lack of differentiation in its products' features has the sharia insurance industry lagging behind its conventional counterparts, an insurer has said.

FWD Life Indonesia chief of product proposition and sharia Ade Bungsu said that many sharia insurance products were just mirroring conventional products without adding any value.

Moreover, despite being dominated by Muslims, Indonesian customers cared more about features and investment returns.

"Our market is floating, if conventional [insurance] performs and provides better than sharia, they will go to conventional. A 'mirrored' product will just put you in a 'red ocean'," he said at a FWD Life Indonesia sharia product launch in Jakarta on Friday.

Ade added that sharia products could stand to utilize "social features" to differentiate itself from other products. As Muslims are obliged to make donations in the form  of  zakat, waaq and sadaqa. Muslims want to see if a product can automatically manage social disbursement.

Based on the Financial Services Authority's (OJK) latest data, the insurance industry, both conventional and sharia-based, saw its premium income increase by 16.92 percent year-on-year (yoy) to Rp 141.75 trillion (US$10.48 billion) from January to September. However, with sharia insurance new premium income increased only 15.8 percent yoy to Rp 8.8 trillion in the same period.

The business size of sharia insurance was also small, comprising only 6.2 percent of the total industry. 

Etiqa Enters Indonesia

Malayan Banking Bhd’s (Maybank) insurance arm has signed a deal to acquire a majority stake in Indonesian general insurance company PT Asuransi Asoka Mas (Asoka). According to sources, the deal aims to leverage on Maybank Indonesia’s more than 400 branches to market Etiqa insurance products. It is believed that the deal was sealed recently, but is subject to regulatory approvals in Malaysia and Indonesia.

Maybank Ageas Holdings Bhd, the operator of Etiqa, is 69 per cent-owned by Etiqa International Holdings Sdn Bhd, which is a wholly-owned subsidiary of Maybank. While Asoka is just a small Indonesian insurance player, we understand that Etiqa is acquiring it more for its licence, leveraging on Maybank Indonesia’s extensive network rather than Asoka’s ready-made business. 

Indonesia has a population of 262 million people and a large untapped insurance market. Although Etiqa’s foray into the Indonesian insurance market may not reap immediate benefits, it will augur well for Maybank and Etiqa in the next couple of years.

We understand that Etiqa is targeting to be among the top five insurance companies in Indonesia in the next five years,” said the source. Etiqa recorded a net profit of around RM600 million last year, which was 8.8 per cent of Maybank’s total net profit of RM6.8 billion. 

It is the largest insurance company in Malaysia, and plans to be a major regional player, using Maybank’s extensive network of branches in Asean. The company offers life and general insurance in Malaysia, Singapore and the Philippines. “After Indonesia, we believe Etiqa plans to expand into Indochina, and go for a listing in the next two years when the stock market has better premiums. 

CIMB Niaga made a net profit of 856 billion rupiah (RM270 million) last year while Maybank Indonesia registered earnings of 1.14 trillion rupiah. CIMB Niaga is the fifth-largest bank in Indonesia in terms of assets, with 17 trillion rupiah.

Medical Insurance premium Hike

The increase in medical insurance premiums this year is a direct result of higher healthcare costs, according to agents who have to bear the bad news to their clients. The National Association of Malaysian Life Insurance and Family Takaful Advisers (Namlifa) said they did not agree with the increase of an estimated 10% to 30% since early this year.

Calling for insurance companies to justify the increase with facts and figures, Namlifa president James Bong, said the pricier coverage would also hinder Bank Negara’s goal to achieve a 75% insurance penetration rate by 2020 and burden the public healthcare system.

Several agents the daily spoke to said the increases, which were “now a norm”, had started early this year, and it was not limited to new products. The agents added their clients were also upset that existing policies had gone up by as much as RM300 per year.

Bong told The Star that Putrajaya should also allow higher tax relief claims for life, medical and education insurance. Life insurance is exempted from the GST, but all traditional and investment-linked policies with medical, critical illness or personal accident benefits are taxed.

The Federation of Malaysian Consu­mers Association (Fomca) also weighed in on the issue, with its secretary-general Paul Selvaraj saying that insurance premiums would continue to increase if the government does not do anything to control escalating medical costs at private healthcare facilities.

Meanwhile, Life Insurance Association of Malaysia (LIAM) said the need to increase medical insurance premiums was due to healthcare costs increasing by around 15% every year.

LIAM suggested all stakeholders, including the government, insurance companies, private hospitals and doctors, as well as consumers work together to address the higher costs.

Hong Leong Profit - Slumps

Hong leomg Financial Group owner of one of the top Malaysian banks by asset size, reported Wednesday net profit dipped 0.17% year-on-year to 386.19 million ringgit ($87.59 million) for the first quarter ended September.

The financial group controlled by tycoon Quek Leng Chan saw interest income slip 0.09% to 1.58 billion ringgit in the quarter from a year ago, it noted in a filing to Bursa Malaysia.

"It has been a good start to the new financial year despite the challenging economic environment," said Hong Leong Financial Group president and CEO Tan Kong Khoon in a statement. "Business growth remains intact and most importantly our core businesses continue to show strong credit and liquidity risk metrics which is important in these times."

Hong Leong Financial Group owns 64.4% of commercial bank Hong Leong Bank, 70% of insurer Hong Leong Assurance, and 81.3% of investment bank Hong Leong Capital.

Pre-tax profit for the commercial bank division grew 8% year-on-year to 674.6 million ringgit, thanks to higher net interest income and non-interest income. Its loan-to-deposit ratio is 81% as at end of September while its cost-to-income ratio is at 44.8% in the period from July to September.

Hong Leong Capital recorded a 42.6% year-on-year increase in pre-tax profit to 18.4 million ringgit in the corresponding period, due to higher contribution from its investment banking and stockbroking segments.

Hong Leong Assurance reported a 27.4% fall in its pre-tax profit to 53.6 million ringgit for the quarter ended September, partially due to higher operating expenses and a lower share of profit from an associated company. Earlier this month, the group stopped negotiations for the sale of its insurance arm as it could not reach an acceptable price.

Toxic Bully In Your office

Anyone who spends enough time in an office will eventually encounter toxic personalities. Many people occasionally feel belittled, misunderstood or undervalued in their professional roles. But when does a supervisor or co-worker's behavior cross the line from annoying to potential legal nightmare? The answer lies in understanding what constitutes workplace bullying.

Being bullied can have a variety of tells: erratic behavior, depression, anxiety, absenteeism, appearing withdrawn or expressing a sense of isolation. Bullying is "abusive conduct" that feels threatening, humiliating or intimidating.  ​

Even with these clear definitions and guidelines for noticing red flags, it can be difficult to recognize bullying behavior at work - particularly if you are emotionally upset from experiencing it. You might think that bullies are only a problem for children and turn a blind eye to such behavior in adults. You might also be reluctant to view yourself as the victim of a bully, feeling like it means you are a weak person or incompetent employee.

Here are five signs that suggest you may be bullied at work.

1. Not receiving credit for your work. Failing to receive credit for work that you've done – or receiving an inordinate amount of criticism – could be part of a bullying campaign to make you look bad or incompetent. These critiques often have no merit, but they can impact others' impressions of you if you don't speak up. To prevent this, set clear expectations and roles at the outset of a project, so the bully can't claim your accomplishments or blame you for their mistakes.

2. Being aggressively managed. Even bosses can be bullies.If your manager corrects you in public rather than private, uses impolite or unprofessional word choices when communicating with you or sets your deadlines based on personal whims rather than team goals and priorities, that may be bullying. Tread lightly if you are in this position. Offending a manager, justified or not, intentional or not, can be career suicide.

3. Becoming the butt of jokes. While kidding around in the office is common, it's different when you're constantly targeted about character traits that you can't change. If you bully someone for not pulling their weight, they can get better at their job – rude nonetheless but a person can change. However, if it's about their look, that is flat-out grade-school bullying and has to stop. People who are targeted for trash-talking, name-calling and mocking – either at meetings or behind the scenes when no one is around to hear it – are being bullied.

4. Noticing the "mob effect." If everyone in the office suddenly turns against you, avoids you or cuts you out of important conversations, they may be exhibiting bullying behavior. This includes being systematically shunned from meetings, then finding out that important information that impacts your performance is being withheld from you. This one is hard to combat because an employer will typically take the word of many over the word of one. Here it would be appropriate to go through the human resources office to look at your options for addressing harassment.

5. Feeling sick. The pernicious effects of bullying can take a heavy toll on your health. If the experiences you're having in the office make you feel like throwing up the night before your week begins, this is another common sign of bullying. In the short-term, targets of bullies may experience health problems, such as headaches, difficulty concentrating, depression and sleep and anxiety issues. They are also more likely to abuse alcohol and drugs. Victims may fear meetings, office activities or even going to the workplace. Their work performance often suffers.

Attorney, recommends that adults who are being bullied at work document all incidents in detail and report bullying behavior to a supervisor or their HR department. They also can report it to other authorities. Other tactics for dealing with bullies are to avoid or ignore the bully. As a harsh last resort, if the situation isn't improving and the strain on their health or work performance becomes too much, victims may need to consider changing jobs.

It's also important to keep in mind that anyone who is perceived as "different" from the organizational norm may be particularly likely to be targeted by a workplace bully. This includes racial minorities and lesbian, gay, bisexual and transgender individuals. Diagnostic tools exist for employers who want to help prevent bullying of certain groups and implement best practices, such as Hetrick-Martin's PRYSM Scan, which helps employers create a workplace supportive of LGBT employees. The scan looks at all areas of an organization to determine if there are comprehensive policies, physical environments and safety measures in place that reflect and foster diversity and inclusiveness.

Someone being bullied should find allies in other staff and seek HR or union guidance where applicable. Most importantly, someone being bullied should neither feel nor address the situation alone. Employers have a responsibility to create a safe working environment for all employees.