Ghost Insurance Broker

A Navan resident described by Judge Martina Baxter as the face of a ghost broker insurance scam was jailed for eight months at Trim Circuit Court. Some of the offences were committed while the defendant was on bail for unlawfully possessing stun guns and CS gas cylinders

Three years ago twenty eight year old Martin Hanudel of Tubberclaire Meadows Athlumney Navan pleaded guilty to possessing the firearms. Det Garda Pat Muldowney told that hearing that a package addressed to the defendant's mother's house in Tailtean Drive Navan was intercepted by Customs and Excise officers at a mail centre and found to contain four stun guns.

The package was delivered on 10th Feb 2016 and gardai who called to the house also found six gas cylinders of pepper spray and CS gas as well as an extendable baton, knuckledusters and a small amount of cannabis in the defendant's bedroom.

When questioned about the stun guns Hanudel said he was unaware who had ordered them and added that he was going to deliver them to the gardai. The defendant later pleaded guilty to the firearms offences

Ghost Broker - Last year he became the first person in the country to admit to the crime of operating as a ghost broker when he pleaded guilty to 12 charges of deception on dates between June 2016 and Mar 2017. The court heard that Hanudel targetted the Slovak community through social media sites offering cheap insurance.

He operated as a bogus intermediary by giving the insurers false information about the value of his unsuspecting clients cars, their employment, no claims histories and other information to get the cheap policies. The clients then paid the policy premium to the insurer and paid the defendant his fee seperately.

Earlier this year he admitted a further charge of deception committed while on bail. The court heard he had falsely claimed to have had a full driving licence and to have been ten years older than he was when taking out insurance for himself in October 2018.

A resumed hearing was told the defendant had €15,000 in compensation which Judge Baxter directed be paid to the National Rehabilitation Hospital as many of those injured in road crashes have to use its services. The judge added it was fortunate that none of those who had bought policies through Hanudel had been involved in accidents.

Judge Baxter said while she accepted that Hanudel had been a cog in a bigger wheel he had been the face of the operation and had been motivated by pure greed. The judge said she accepted the defendant was genuinely remorseful for his actions.

Judge Baxter imposed sentences totalling 48 months but suspended the final 40 months and allowed credit for the time the defendant already spent in custody.

AIA Ends Coal Investment

AIA Group Ltd. said it’s paring coal-related investment as financial firms globally face pressure to reduce their carbon assets. The Hong Kong-based insurer said it decided to end all direct equity investments in coal mining and coal-fired power producers earlier this year, according to an emailed statement Tuesday. The response came after environment groups reviewed the company’s portfolio, criticizing it for lagging behind peers.

AIA is the latest company to come under scrutiny for its environmental, social and governance investment track record. Grassroots organizations and shareholders are holding companies responsible for their pledges to help combat climate change.

Environment groups SumOfUs and Insure Our Future urged AIA to divest its assets in coal and join 65 industry peers that have done so, according to a report on Wednesday. SumOfUs is a global online community of 10 million consumers that campaigns to hold big corporations accountable, according to its website. Insure Our Future is an activist group that scrutinizes insurance companies’ roles in the climate crisis.

AIA is carrying out a full review of other coal-linked investments, it said in the statement. A spokesman declined to say whether the divestment plan covers companies that derive a minority of their revenue from coal.

AIA, which operates in 18 Asian markets, is a signatory to the United Nations’ Principles for Responsible Investment.

Indonesia approved - Investment-linked Product - Online

The Financial Services Authority (OJK) has granted licences to nine insurance companies to sell investment-related products (PAYDI) online.

Of the 14 companies that had submitted an application for a licence, nine companies have been approved to carry out sales without physical face to face interaction -- or virtually -- and we will continue to monitor this.

In June this year, the OJK issued a circular which states that in the marketing of PAYDI and unit-linked products, interaction can be conducted through digital modes such as video conferencing, video calls or a combination of these media. At the same time, the OJK said that the wet signature of the prospective policyholder on insurance documents can be replaced with an electronic signature.

These developments followed a request in April by the Indonesian Life Insurance Association to the OJK to allow life insurers to market investment-related products where face-to-face meetings, between marketers and prospective customers, can be replaced by online interaction.

Moneylender Misusing Personal Data

Six unlicensed moneylending apps are under investigation on suspicion of misusing personal data {according to Personal Data Protection Department (PDPD)}

The six applications are Asialend, Dreamlend, iPayfren, iPinjaman, Helplend4u and GoCash4u.

The department said the applications “were found to have accessed and copied other information, including personal information unrelated to loans without the borrower’s consent”

If found guilty, the operators of the six apps face penalties of a fine of up to RM300,000 or a jail term of up to two years or both. Those whose personal data has been misused by such unlicensed online money lending apps are urged to contact the PDPD enforcement division at penguatkuasaan@pdp.gov.my or the Personal Data Protection System (daftar.pdp.gov.my) to assist investigations.

The department said Malaysians should be more careful with their personal data when applying for loans online, especially when giving downloaded apps permission to access information.

Anyone interested in online loans should check with the Housing and Local Government Ministry, Credit Community Control Division to verify the registration status of the online moneylending app, the department said.

Ansuransi Jiwa Kresna Off The Hook

The Financial Services Authority (OJK) has ended its Business Activity Restriction Sanctions on Asuransi Jiwa Kresna (Kresna Life) that had been imposed since 3 August. With the end of Business Activity Restriction Sanctions, Kresna Life can carry out new coverage activities for all business lines for insurance companies since 4 November 2020. 

Kresna Life had rectified the causes that had led to the imposition of the sanctions by meeting recommendations made in examination in February 2020 of the insurer by the OJK for the 2019 period. The sanctions had been imposed because Kresna Life was deemed to have violated provisions regarding the implementation of recommendations following the examination.

Measures

The OJK had found a number of violations committed by Kresna Life, especially related to a wealth management product, Kresna Link Investa (K-LITA). To rectify the situation, OJK had ordered Kresna Life to:

1. pay claims lodged by policyholders

2.prepare a financial restructuring plan that spells out steps to be taken by controlling shareholder to overcome Kresna Life problems, as well as a detailed claim payment plan

3. discontinue K-LITA products in February 2020, to prevent the risk of difficulty in paying claims

4. ensure the management and controlling shareholders of Kresna Life are responsible for their obligations to policyholders

5. submit a settlement plan for Kresna Life's obligations, supported by realistic sources of funds including additional capital or funds from other legitimate sources.

6. ensure the widest possible communication with policyholders.

Kresna Life has previously stated that it had to postpone payouts on two insurance products, namely K-LITA and Protecto Investa Kresna (PIK). Kresna Life also stated that it would open a dialogue with customers to complete settlement of policies for which payment had previously failed to be made.

The insurer has appointed a Policy Settlement Team (TPP) to assist Kresna Life to improve and improve communication with policyholders.

Global Insurance Losses From Covid

Global insurance losses from the COVID-19 pandemic will be higher this year than the $107bn Lloyd's of London had previously estimated. Pandemic-induced losses will be on par with 2017, when three Atlantic hurricanes caused a total of $144bn in losses, the highest amount on record, according to Swiss Re statistics.

Lloyd’s, which in March shut its underwriting room for the first time since World War II due to a UK government lockdown, said Lloyd’s firms were facing claims from 16 different business lines. Unlike many events, a pandemic is everywhere at the same time plus the outbreak had extended longer than expected.

The 330-year-old Lloyd’s operates a commercial insurance marketplace, insuring anything from oil rigs to footballers’ legs. It has said it will pay $3.2bn in pandemic-related claims for the first six months of 2020.

Lloyd’s has proposed a ‘Black Swan’ reinsurance scheme to governments globally to ensure better cover during circumstances such as the pandemic and other disturbances to business, but it was hard to get government attention on the topic so far. The challenge for governments, of course, is that they are very short-term focused … (it is) very difficult for them to lift their heads above the parapet and think about the future.

Singapore Life Insurer Hiring Over Covid-19

Prudential Singapore on Wednesday said it plans to hire more mid-career individuals and fresh graduates amid the Covid-19 downturn. The life insurer intends to hire up to 500 more financial consultants in 2021 than this year, as the current health crisis has triggered growing awareness of and interest in insurance.

The new hires will include up to 200 mid-career individuals selected for its new S$1 million talent management programme, slated to launch in January next year. Eligible candidates will undergo a two-year training programme, including a 12-month competency and skilling course. The course covers both soft and hard skills such as technical training, product knowledge, leadership development, effective communications and social media content creation.

Recruits will also be mentored by agency leaders and receive a monthly allowance of up to S$10,000 pegged to relevant work experience for a period of 24 months, the insurer added.

As for fresh graduates, successful applicants will undergo an in-house training programme covering topics such as financial planning, plan construction, financial needs analysis, investment and retirement planning.

They will also receive a monthly transition allowance for the first 24 months to help them kickstart their career in insurance. Prudential's latest announcement comes as other industry players have similarly said they would offer more employment opportunities amid economic uncertainty brought about by the coronavirus pandemic.

In late-September, AIA Singapore announced the creation of up to 500 new career opportunities, training and financial support aimed at fresh graduates and mid-career switchers.

China Life Insurance (Singapore), which normally sells its insurance products through banks and financial companies, also noted in September that it plans to hire more than 500 consultants in Singapore over the next five years.

Meanwhile, Great Eastern in June said that up yo 1,000 vacancies traineeships and internships will be available for those looking to join the insurer's agency force.

Scammer Using Bank Negara To Cheat

Bank Negara Malaysia recently released a warning on their Facebook to caution the public against falling prey to a new kind of online scam that tricks netizens into entering online contests to win cash prizes. “The public is advised to be aware of this new online scam that exploits the concept of online competitions.”

These competitions are typically fashioned in a way where contestants are required to send in their personal information and winners will be picked at random. Bank Negara stressed that the public should never share their private data with any platforms, even if they have Bank Negara’s own logo on them. “Important reminder! Never share your personal information with anybody, even if there’s a BNM logo”.

In their post, Bank Negara included an example of one such online scam that required contestants to share personal information like pictures of their ATM cards (both front and back), your PIN number, and IC.

These scammers will typically use reputable brands to disguise themselves and prevent people from getting suspicious about their schemes. So the next time you receive a sketchy message that offers attractive prizes but requests for particularly detailed information, do be careful!

IFG Life To Focus On Protection

State-owned insurance holding firm Indonesia Financial Group’s (IFG) life insurance subsidiary, IFG Life, is expected to focus on protection-oriented insurance in a bid to avoid the mistakes of ailing state-owned insurance company PT Asuransi Jiwasraya. 

IFG business director Pantro Padner Silitonga said that the subsidiary would focus on offering conventional insurance products, including life insurance, health protection and a pension fund, instead of investment-linked products, to minimize future risks. “As a state-owned insurer, it’s important for us to restore the original insurance business model of protection,” he said. 

Earlier this month, the government and House of Representatives agreed to disburse a Rp 22 trillion (US$1.49 billion) state capital injection through PT Bahana Pembangunan Usaha Indonesia (BPUI), now known as IFG, to establish IFG Life and save Jiwasraya. 

Jiwasraya is embroiled in a corruption and money laundering case following its failure to pay out Rp 18 trillion in matured policies due in May to its policyholders. The Attorney General’s Office (AGO) accuses Jiwasraya of investment mismanagement when it invested its premium revenue from the JS Saving Plan, one of the company’s unit-linked products, in pump-and-dump stocks. 

IFG Life is set to be in charge of managing Jiwasraya’s restructured policies. Hence, IFG Life’s protection model product contrasts with Jiwasraya’s past products that promised high returns. Jiwasraya’s JS Saving Plan offered a return of between 9 and 13 percent, almost twice the return of 5 percent to 7 percent offered by time deposits. 

The Financial Services Authority (OJK) data from 2018 confirmed that investment-linked products, such as unit-linked or endowment products, accounted for about 90 percent of Indonesia’s life insurance industry’s gross written premiums. 

Pantro said he believed IFG Life would was able to compete with other life insurers in the country with the company’s protection-oriented products. “We’ve seen increasing awareness for health protection since the COVID-19 pandemic hit, so we believe we can even be a pioneer in providing protection in the country,” he said. 

The new life insurer aimed to attract customers with affordable premiums and planned to partner with the Health Care and Social Security Agency (BPJS Kesehatan) to ensure better services, he said. Pantro also stated that IFG Life would prioritize investment in low-risk assets, such as money market or fixed income assets, before investing in the equity market, to ensure that the company can manage its assets prudently. “We don’t want to repeat mistakes of the past,” he said. “From now on, our assets will be managed to match our liabilities to prevent default.” 

IFG Life also expects to utilize the state-owned enterprises (SOEs) ecosystem to market its products during its early days of operations. Pantro said the company would use the business-to-business (B2B) scheme with other SOEs by providing group policies for their employees before expanding to the general public. 

Experts criticized the new life insurance firm’s strategy. Institute of Development on Economics and Finance (Indef) economist Bhima Yudhistira said selling insurance products to other SOEs would only worsen the competition among state-owned insurance firms. “This goes against the spirit of the insurance holding itself, which is to maximize the insurance industry’s potential in Indonesia,” he said. 

Instead, Bhima suggested that IFG should immediately sell its products to the general public due to the low life insurance penetration in the country. The life insurance industry penetration stands at 1.1 percent of gross domestic product (GDP) as of July 2020, according to OJK data. 

Insurance expert Irvan Rahardjo echoed that sentiment, saying IFG Life should eye millennials as clients through digitalization, because many state-owned financial firms already had their own life insurance firms. 

Center on Reform of Economics (Core) Indonesia economist Piter Abdullah said the company should focus on maintaining good governance to avoid repeating Jiwasraya’s mistakes. “Jiwasraya’s main mistake was reckless fund management that wasn’t based on good governance,” he said. “IFG Life should not be against investment-linked products. What they should do is put good governance forward and have no tolerance in any sort of procedural violations.” 

Covid19 Insurance Protection

Indian insurance market finally has an individual insurance policy that is specifically tailored to cover both Covid-19 related deaths and Covid-19 treatment costs. So far, the Indian insurance market has had the Corona Kavach and Corona Rakshak health insurance policies, which covered treatment costs for Covid patients-the first being a standard indemnity-based policy that paid hospital expenses and the latter a fixed-benefit scheme where payment of the lump sum was triggered by Corona-led hospitalisation for at least 72 hours. 

Edelweiss Tokio Life Insurance’s last week launched the Covid Shield+ - an individual life insurance product with a one-year tenure. The policy is a fixed-benefit plan for which eligibility conditions do not include a medical test. The policy is also single premium, and unlike the other two policies has several features. 

First, it does provide a cover for deaths not caused by Covid-19. However, the sum in this case is quite small-just 1.25 times the premium paid. The primary benefit arises from the cover for Covid 19 deaths, which ranges from Rs 25 lakh to Rs 50 lakh, with a waiting period of 30 days. The policy can be taken by people between 18 and 65 years with premiums as low as Rs 5,500 in some cases. 

The policy provides substantial cover for Covid-19 treatment too. For instance, if the policyholder needs Intensive Care or High Dependency Unit treatment for over 24 hours, the treatment cover is triggered and the policyholder can get 40 per cent of the Covid-19 death cover. If the Covid-19 enhanced cover is Rs 25 lakh, the policyholder will be paid 40 per cent or Rs 10 lakh. 

If a death occurs within 24 hours of admission to the ICU or HDU, then the policy will payout the enhanced benefit and the basic cover. If the death occurs after 24 hours after admission to ICU or HDU, the policyholder will get the enhanced benefit, basic cover and, in addition, 40 per cent of the enhanced benefit to help with hospital treatment. The same will apply in case the policyholder contracts Covid, is treated in the ICU or HDU and survives, but later dies due to another cause.

Covid-safe investment - Edelweiss Tokio Life Insurance’s Covid Shield + is a fixed-benefit plan for which eligibility conditions do not include a medical test. The policy is also set to be a single premium

Extension - Relief For Policyholders

The Life Insurance Association of Malaysia (Liam) and its member companies have extended additional relief measures for affected policyholders to Dec 31, 2020 following the third wave of the Covid-19 pandemic in the country.

The additional relief measures come in a form of financial assistance amongst others include cash benefits, hospitalisation allowance and lump-sum death/compassionate benefits.

Examples of the additional benefits offered by the life insurers are:

i. An insurer offers products which entitled policyholders to enjoy six months premium relief of up to RM3,000 due to retrenchment (policy to be in force at least 12 months prior to retrenchment).

ii. Six life insurers have pledged RM1 million each as part of their financial assistance and support programme for customers affected by Covid-19.

iii. Four life insurers offer special death benefit payment ranging from RM5,000 - RM15,000 to frontline medical workers.

iv. Cash relief ranging from RM1,000 – RM5,000 for customers who are diagnosed with Covid-19.

v. Cash benefits/allowance for hospitalisation ranging from RM60 - RM250 per day and up to 30 days of hospitalisation.

vi. Special lump-sum death/compassionate benefits ranging from RM5,000 - RM20,000 upon the death of the insured.

In support of the government’s measures to assist the rakyat in coping with the pandemic, Liam and its member companies have come together in solidarity to implement various relief measures to assist policyholders who are affected by the pandemic and to ensure that they are able to continue with their livelihoods.

Liam and MTA have also granted a 90 days deferment period/no-lapse guarantee for three months for policyholders who are impacted by this pandemic. During this period, insurance and takaful companies will continue to provide insurance protection to affected policyholders if they are not able to pay for their premiums. Affected policyholders must apply to their insurance companies to get approval before they can benefit from this relief measure. This option is available from April 1, 2020 until Dec 31, 2020.

Policyholders who are qualified for this relief include those who are Covid-19 positive patients, those who are home quarantined (mandatory) or suffered a loss of income.

Insurers also extend to small and medium enterprises (SMEs) which have suffered a loss of income due to the Covid-19 pandemic. Examples of events that lead to such loss of income include retrenchment, shorter working hours and salary or commission reductions for individuals; and loss of business income for self-employed and SMEs.

Policyholders affected by Covid-19 need to submit their applications to their insurance company for the deferment of payment of life insurance premiums. As of to date, over one million policyholders have been granted the premium deferment relief, involving a total of over RM1.6 billion premium payment.

Insurance companies will continue to provide other forms of support to help policyholders to keep their policies in force. Some of these may include a restructuring of policy features, such a lowering the sum assured or temporarily shortening the policy duration, so that policyholders can keep their insurance protection.

32% - RM1,000 Or Less - EPF Account 1

Approximately 32% of Employees Provident Fund contributors (EPF) have a balance of around RM1,000 in their Account 1. 10% have a balance of around RM5,000 and below in their Account 1 (42% of contributors have around RM5,000 or less in their Account 1).

The government is allowing those who have lost their jobs during the pandemic to make targeted withdrawals of RM500 a month for a maximum of 12 months from their Account 1 from January.

Personal income tax rate for those earning between RM50,000 and RM70,000 a year by 1%. In addition, EPF contributions will be reduced from 11% to 9%.

Insurance - Financial Planning

Traditionally, most people associate insurance plans with the idea of debt settlement and to pay-off their credit liabilities including mortgage or medicals bills. However, through proper financial planning, insurance plans can also be used as tools for the purpose of wealth diversification, distribution and protection.

Diversify - By having the right protection plan, no matter what stage of life you are in, or what you do for a living, insurance can help you along the way to achieve your financial goals and objectives. So, you should consider a plan that suits your needs. For instance, one that can help you achieve your desired investment returns through diversification. 

Many have always used insurance as a smarter way for wealth management. They often treat it as a little, set-aside emergency fund which they can access at any time, without taxes or penalty.

However, a properly-planned life insurance policy is more than helping policyholders to save up on taxes. It often has other decent features such as life coverage, guaranteed cash payments, maturity benefits or other protection benefits. 

Moreover, these plans provide policyholders with immediate income benefits even in their first year. The incomes may gradually increase every year, depending on the insurance policy. These plans can help you to grow your wealth regardless of market conditions while providing you with life protection. 

If growing your wealth in a safer way is your priority, you can consider an insurance plan with an endowment or investment features. Such an insurance plan helps policyholders to generate fixed maturity returns while providing guaranteed benefits such as life coverage or other insurance benefits. A portion of the premium you pay goes towards providing you with insurance protection while the rest of it is invested into a portfolio of selected funds that are well diversified. 

Some might want to consider investment-linked protection plan as they are quite flexible. Since a portion of your premium goes into an investment-linked fund, you can adjust your investments strategy and asset class via switching the sub-finds when you change your financial goals at some point in time. You can also adjust your insurance coverage as your needs change over the years. 

Preserve - As we are all aware of, we are entering into an environment where the interest rates are at their lowest since the financial crisis in the late 90s. If you are thinking of putting your hard-earned money into traditional deposit tools such as savings accounts and fixed deposits, it is no longer an attractive option as they do not offer better returns or other benefits. Many are considering diversifying their wealth into other available options in the bank which offer guaranteed benefits or additional advantages. 

An insurance plan is one of those options.  By saving with an insurance plan, the value of your wealth is preserved because you have just done what investment gurus have always advised – diversify and preserve! As the saying goes, “Don’t put all your eggs into one basket”. To better manage our risk and portfolio, we should always diversify our wealth into various financial tools, such as savings account, fixed deposit, investments- unit trust, foreign currency or shares, and of course, a suitable insurance plan. These financial tools will be generating different rates of return, depending on the degree of risk and offer you different level of flexibility in managing them. Managing all your wealth with the same financial tool is like putting all eggs into the same basket- once you drop it, you break them all.

Purchasing an insurance plan is also a more flexible option as you can decide if you want to pay a monthly premium, a pre-determined amount upfront annually or even a one-off payment in advance. Whichever is your preferred method, you have just practiced self-discipline by contributing towards your wealth planning through diversification and preservation. 

The value of the policy and benefits can be decided based on your financial needs and types of contribution. For example, you can choose the tenure and nature of the insurance plan based on your financial goals, such as preparation for retirement, setting up an income replacement upon the demise of the breadwinner or setting up a fund for your child’s education. 

On top of that, the government has also introduced tax incentives for those who purchase life insurance! Saving with life insurance just gets better as premiums are tax-deductible. For 2020 tax filings, the tax-relief for life insurance is RM7,000, while for medical or education policy, the tax-relief amount is RM3,000 per annum.

Distribute - Insurance plans serve as an essential part of solid financial planning. It provides you and your family with financial protection in case of sickness or death. It also gives you peace of mind, knowing that your loved ones will be taken care of no matter what might happen. 

With a solid insurance plan as part of your investment portfolio with your bank, your nominee(s) will receive your insurance payout according to your wishes, in the shortest possible time. This will enable them to continue their daily lives while also allowing a smoother estate transfer to ensure his or her family’s lifestyle is secured.

RHB life protection plans offer a wide range of products to suit all your different needs. Diversify your liquid cash into an insurance plan that can offer guaranteed benefits such as a large protection amount, cash payments, maturity benefits and investment returns. This is favourable compared to just a normal will or trust that will just preserve your wealth instead of growing it. Not forgetting, with insurance nomination, the claims amount can be paid to the nominated person faster as compared to the normal distribution act or will distribution process which may potentially take months or even years. 

LIAM Proposing Increase Tax Relief For Life Insurance

The Life Insurance Association of Malaysia (LIAM) is proposing that the government increase the current limit of RM3,000 tax relief for life insurance (LI) premium to RM5,000 in the upcoming Budget 2021, which is a way to encourage Malaysians to plan for their needs for protection.

The increase in tax relief would put more money back into the rakyat’s pocket to relieve them of their financial burden and also to encourage them to have a better financial plan for the future. The current combined tax relief of RM3,000 for MEI premiums is actually insufficient in most circumstances.

For example, the cost of medical insurance itself for an average family (two adults and three children) is around RM2,500 per annum at the lower end, where this leaves only about RM500 per annum premium for savings towards the education of three children in this typical family.

In addition, LIAM hopes the government would allow Employees Provident Fund (EPF) members to utilise the EPF Account 2 to purchase LI, as well as medical and health insurance in order to provide better long-term protection and security to the fund’s contributors.

Life insurance provides financial coverage for the family in the event of a death or illness of the family breadwinner. By allowing members to purchase life insurance from Account 2, it will help the members to augment their EPF savings to provide for themselves and their family in times of need.

LIAM is also proposing the extension of insurance coverage to the bottom 40% (B40) household income group through the government’s Perlindungan Tenang initiative by providing a one-to-one subsidy for the premiums paid by this group. This would provide an opportunity for the B40 group to appreciate the importance of life insurance protection, particularly if the insured member or family receives a claim, and to continue with the insurance after the two-year period.

Lastly, LIAM is proposing a waiver to the service tax for group insurance schemes by encouraging higher take-up rates by the employers for the benefit of their employees.

Under the existing tax regime, the premiums for group insurance schemes are subject to the service tax of 6%, thus making it costlier in premiums which might not be affordable for some employers, especially the small and medium enterprises. By having more Malaysians covered under private group medical insurance, this will help to lessen the burden of the public healthcare system, from both financial and capacity angles.

Main Objective Of Buying Life Insurance

Purchasing life insurance is a critical decision and is not to be taken lightly. If you’re considering life insurance to protect your family if you die or as a savings vehicle for retirement, it’s essential to compare your options. As you do your research, you should consider the benefits of life insurance and investigate any disadvantages of each life insurance policy you explore. In this article, we’ve broken down some of the best things about life insurance, as well as what you should look out for when deciding which policy is best for you.

Benefits of Life Insurance - Life insurance is often the foundation of a financial plan. Depending on the type of policy, the benefits of life insurance can last long after someone dies. Here are a few of the many benefits of having life insurance.

Family Protection - The most popular benefit of having life insurance is the death benefit. If someone dies while they have a life insurance policy in effect, the insurance company will pay a death benefit to the insured’s beneficiary. A policyholder typically decides how much insurance coverage they need when applying for a policy. This amount of coverage can differ from person to person. However, individuals usually select amounts based on what they want to leave behind and cover a set amount of income to support their dependents.

Budget Friendly - There are many life insurance types, and each type is designed to fit a different set of needs. Term life insurance only covers a person for a set amount of time, typically five years or more. Due to the lack of permanence, term life insurance policies tend to be the least expensive option on the market. If you want your life insurance to last your whole life or want to have flexibility in your premium payment cost, the cost of a policy will increase. Additionally, some companies will charge more for similar policies, so you might want to shop around to see if you can get the best price. But overall, no matter what your budget is, there is generally a policy to fit your needs.

Peace of Mind - It can be challenging to accrue wealth, especially when you’re young. You may want to protect your family financially in case you die unexpectedly, and your income disappears. Life insurance offers people peace of mind that their families will be financially stable, even if they’re no longer around to support their financial needs.

Tax Benefits - Usually, death benefits from employer-sponsored life insurance plans or private life insurance policies are tax-free. Additionally, the cash value in a whole life insurance accumulates tax-deferred growth. This means that a person can reinvest the money in the cash value of a life insurance policy without facing tax implications. The policyholder will not pay capital gains on any dividends or growth on the cash value. But there are a few situations where life insurance may have some tax implications. You may want to speak to a financial advisor to understand the tax implication of your policy.

Financial Planning - As part of a robust financial plan, some use life insurance to cover financial expenses such as medical bills, debt or funeral expenses. By using life insurance in this way, your family can avoid spending your savings that were intended for other uses. Additionally, the cash value component of permanent life can help you save for retirement. Depending on the type of policy you have, the cash value can grow tax-deferred and be reinvested. Some policies also prevent the cash value from declining with the market if there is a downturn. Additionally, people can choose to use the cash value during their lifetimes, making it a crucial part of some people’s retirement plans.

Disadvantages of Life Insurance - While life insurance is generally an investment worth considering, you should consider the drawbacks before choosing to purchase a policy. 

Sales Commissions - It is not advised to purchase a life insurance policy on your own. However, this leaves consumers open to insurance agents that might not have your best interests in mind. They may lead you toward a more comprehensive policy that you do not need or make recommendations that ensure they receive a larger commission. Therefore, be sure to do plenty of research before applying for a life insurance policy and not sign anything that you are not comfortable with.

Expense - The cost of life insurance increases as people age, and people in poor health often find it challenging to get a reasonable rate or qualify at all. Therefore, it is good to purchase life insurance when you’re young and healthy, since these factors determine the cost of your policy. If you are trying to get the best rates on a life insurance policy, you may want to improve your health. The life insurance medical exam will evaluate a person’s smoking status, blood pressure and more. People trying to get a favorable rate on their life insurance may want to quit smoking and improve their fitness before applying for life insurance.

Weak Investment Returns - The cash value portion of a life insurance policy is generally a safe investment vehicle. However, it may not see the same rate of return that an IRA or other investment might provide.  Compared to stocks, for example, the investment portion of cash value life insurance makes pretty paltry returns. Sould you make more if you invested the money elsewhere? Likely yes — unless you are an extremely conservative investor. Therefore, most people choose to fully fund their EPF and other assets before funding the cash value in their life insurance policies.

Permanent Life Insurance Costly - As mentioned before, there is a life insurance option for almost any budget. Term life insurance is typically the least expensive, but permanent insurance, or whole life insurance, is costly no matter a person’s age or health. It is pricier because it lasts a person’s entire life. Therefore, there is a payout guarantee no matter when you pass away, unlike term insurance. Term insurance is less expensive because the goal is not to die while covered by the policy.

The Takeaway - In general, the benefits of buying life insurance outweigh the disadvantages. Life insurance can help protect your family in case of an early demise and is a steady savings vehicle for retirement. However, there are various policies available, and not every policy fits everyone’s unique financial situation. That is why it is essential to understand your options and work with a financial advisor that you trust to find a suitable policy.

Purchasing Life Insurance On Someone Else

Life insurance is a financial planning tool that provides a tax-free payout to designated beneficiaries after death. Most people purchase a policy to help plan for their death and leave their dependents and loved ones with a financial cushion.

However, there are occasions when someone may want to purchase a life insurance policy for someone other than themselves. While there are options available to do this, there are also guidelines that need to be followed before purchasing a policy on someone else. 

Can you take out life insurance on anyone - Generally, it is impossible to take out a life insurance policy against someone that has no relation with you. Betting against someone’s life is not only unethical, but also does not make financial sense for life insurance providers.

However - it is possible to take out life insurance on someone else only if there is some relationship between you, such as a friend, business partner, spouse or parent - and only if the person being insured consents to a life insurance policy being taken out on them.

Life insurance companies also require that the relationship passes the “insurable interest” test, which means demonstrating that the insured’s death would have an adverse impact on the person who wants to purchase the policy.

A: Purchasing life insurance for anyone follows the same basic steps.

Select a type of life insurance policy - The first decision is whether permanent or temporary coverage is necessary. Term Life Insurance is cheaper than Permanent Life Insurance and is a temporary solution for a period of time such as 10, 20 or 30 years. Whole Life, Endowment  or Investment-linked Insurance, which are types of permanent life insurance, stay in effect as long as the premiums are paid and build a cash value amount that can also be used to borrow or withdraw money.

Getting Quotation - No matter what kind of life insurance coverage is needed, it’s a good idea to shop around for quotes from several life insurance carriers to find the best price and terms. The same type of coverage could vary in price, coverage, benefits, exclusion and limitations from one carrier to another.

Get permission - Once it’s time to apply, the next step is to get permission from the person you plan on insuring. They will need to sign a consent form and likely undergo a medical exam before the policy is approved. Even if a policy that doesn’t require a medical exam is selected, failing to obtain signed consent from the person you’re buying the policy for is considered insurance fraud.

B: When to buy life insurance for someone else - Some circumstances make purchasing a life insurance policy on someone else a smart financial decision.

Financially protect family members - For people who are raising children together and have assets such as a home, a life insurance policy could make up for the lost income if one of them passes away. A life insurance policy on an aging parent could provide cash to pay off debts left behind or cover burial costs. And families with a higher net worth may want to consider life insurance to pay any estate taxes.

Ensure business continuity - The death of partners or key employees can sometimes endanger a company. While a life insurance payout may not replace the individual’s skills and knowledge, it could provide capital to recruit a replacement or cover critical costs while the business adjusts.

Guaranteed future coverage - Some families have a history of genetic conditions and chronic illnesses (such as diabetes or heart disease) that make obtaining life insurance coverage difficult. A permanent life insurance policy for a child or young adult that is purchased while they are still healthy guarantees coverage, even if they’re diagnosed with a health condition in the future.urance.

Selangor Peduli SIhat

The Selangor state government is revamping its Peduli Sihat Scheme (underwriting the Peduli Sihat Insurance Scheme) into an RM1.4 billion health insurance programme next year with basic benefits for low-income residents.

RM42.5 million has been allocated for 85,000 families/policy holders. This Rm42.5 illion is insurance premiums borne by the state at RM500 per family for 85,000 families next year.

PEDULI SIHAT - offers  as well as four insurance benefits:

• Death or total permanent disability (TPD) by accident (RM5,000 payout)
• Death or TPD by natural causes (RM5,000 payout)
• Critical illness (RM5,000 payout)
• Funeral expenses (RM1,000 payout)
• A maximum RM500 per year to spend on primary care, including medical check-ups and vaccination, in private clinics,

Each family is entitled to one claim from each insurance category in a year. There are 1,529 panel clinics under the Peduli Sihat Insurance Scheme in Selangor and the Klang Valley.

WHO IS AVAILABLE - Peduli Sihat is availanle to families living in Selangor with a monthly household income of RM2,000 and below, who must be born in Selangor or have lived in the state for at least 10 years. Beneficiaries must be Bantuan Sara Hidup (BSH) cash aid recipients.

SELGATE Healthcare CEO Muaz Omar said SELCARE Insurance PCC Ltd — which is  — is providing a maximum payout of RM1.4 billion next year, which translates to a 3,300 per cent return on investment, based on RM42.5 million in premiums paid by the state. SELCARE Insurance PCC Ltd is a wholly owned subsidiary of SELGATE Healthcare, which is a wholly owned subsidiary of SELGATE Corp, which is in turn a wholly owned subsidiary of state-owned development agency Selangor State Development Corporation (PKNS) in the country’s most developed state.