Is Term Insurance The Ultimate Answer?

An insurance plan is a vital tool that can protect you and your family from life’s uncertainties. A term insurance plan is a pure life insurance policy that offers financial protection to beneficiaries in the event of the policyholder’s untimely demise. It does not accumulate any savings or investment returns.

Term Insurance - Policyholders should only go for term insurance. One of the reasons is term insurance offer pure protection — no returns, no gimmicks, just solid financial security for your dependents if something happens to you. Don't get fooled by buying policy with guaranteed money after many years. Mis-selling is the biggest scam in life insurance.

Most people fall into the trap of buying expensive endowment plans, money-back policies, or guaranteed return. These policies promise maturity payouts after 20–30 years, but what they don’t highlight is the poor returns (often 4–5%), high commissions, and long lock-in periods.

In most cases, these returns don’t even beat inflation - Term insurance is a more cost-effective option compared to other life insurance plans, ensuring that your family is not financially burdened in the event of your death during the policy term. On the other hand, life insurance plans with both maturity and death benefits typically come with higher premiums. However, term plans can be customized to meet your specific needs.

In contrast, whole life insurance plans offer a combination of investment and protection for the entirety of the insured's life. These plans usually have a maximum age limit of 100 years and provide the added advantage of cash accumulation over the policy's duration. Additionally, policyholders have the option to include critical illness insurance riders for increased coverage against unexpected medical emergencies.

Life insurance offers not only life coverage but also the chance to accumulate wealth through savings or investment options. Term insurance, on the other hand, provides financial security for a set time period at a more affordable rate. Both types of insurance necessitate the payment of a premium, which is a predetermined sum in exchange for the guaranteed benefits.

Life Insurance Plan vs Term Insurance Plan - A life insurance plan provides financial security for your family in the event of your passing. It also offers a cash accumulation feature to support your future financial goals. Depending on the type of plan chosen, the policy term can range from 5 to 30 years or even a lifetime. In the unfortunate event of your death during the policy term, your beneficiaries will receive a lump sum death benefit. This amount can be used for various financial expenses such as debt repayment, children's education, medical bills, or daily living expenses.

Term insurance differs from other types of life insurance in that it offers coverage for a specific period of time. Despite the limited coverage duration, term insurance plans typically provide a higher coverage amount for a lower premium cost.

Premium for life insurance vs term insurance - The premium for purchasing a policy early in life is relatively low. Some insurance companies offer coverage for partial or permanent disability that may affect your income during the policy term. One key distinction between term insurance and life insurance is the premium cost. Term insurance, which does not include a maturity benefit paid to the policyholder upon surviving the policy term, typically has a lower premium.

One advantage of a term life insurance plan is that the insurer guarantees a minimum sum payment regardless of whether a claim is made or the event covered by the plan occurs during the policy term. Term insurance plans are known for their affordability while still providing ample coverage.

Both term insurance and life insurance offer protection in the event of premature death, ensuring financial security for your family during the policy term. Life insurance is often seen as advantageous due to the inclusion of a survival benefit in many plans. This benefit provides a lump sum amount to policyholders who survive the policy term. It can be utilized as a retirement fund or as a financial safety net to assist in achieving long-term financial objectives.

Singapore Insurance Scam

At least $1.7 million has been lost since January in six cases involving scammers who baited their victims with supposedly outstanding insurance premiums. In these cases, the victims received calls from scammers who pretended to be representatives or employees of NTUC Union, Income Insurance, UnionPay and MAS.

The victims were told they had outstanding premiums tied to their new or expiring life insurance policies. They were redirected to other scammers, claiming to be with Income Insurance or UnionPay, who proceeded to harvest their bank account details, private credentials and other personal information.

The victims were advised to cancel their insurance policies if they did not want the supposed outstanding fees automatically deducted from their bank accounts. They were instructed – in some cases via WhatsApp’s screen-sharing function – to transfer money to a specified bank account, which the scammers claimed was a necessary step to verify their bank accounts.

In other cases, the victims were redirected to scammers impersonating MAS officials who told them their bank accounts had been linked to money laundering, or that their personal information had been compromised.

They were instructed to help with the investigation by transferring money to a specified bank account. The victims were told the money would be refunded. But as soon as the money was transferred, the scammers disappeared.

The police and MAS said in their joint statement that NTUC Union, Income Insurance and UnionPay will never request personal information or payments to private bank accounts through unsolicited calls, e-mails, WhatsApp, or text messages.

Malaysia Managing Medical Insurance and Cost Of Healthcare

Life insurance companies say they are making losses on their health insurance portfolios despite perceived overall profits, with claims far outpacing premiums in recent years. This led to insurers recording medical insurance portfolio losses from 2022 through 2024.

Life Insurance Association of Malaysia (LIAM) said the industry’s biggest cost driver is the sharp increase in medical claims post-Covid, primarily due to higher volume of hospital admissions rather than the cost of care. Citing industry data, LIAM said that the claims increased 73 per cent from 2022 to 2024, compared to a 21 per cent rise in premiums — a gap that has put “a lot of pressure” on insurers.

LIAM described Bank Negara Malaysia’s (BNM) interim measures to cap premiums as “not sustainable”, with the industry now under a “ticking clock” to come up with “solutions” to help alleviate some of the problems over the next couple of years. BNM’s emergency measure caps premium increases depending on the level — if the total increase is 20 per cent or less, it’s spread out over three years; if it’s between 20 to 40 per cent, it may be spread out over five years; if it exceeds that, it must be explicitly approved by the regulator.

The industry is exploring long-term reforms, including co-payments, mandatory use of generic drugs, publishing average costs of common procedures, and redesigning medical plans with more sustainable benefit structures.

One-Night Hospital Stays, Volume Of Care Fuel Claims - According to LIAM’s internal data, the average annual increase in medical claims over the past seven years — including during the Covid period — was 14.34 per cent. This figure does not account for inflation. But since Covid, claims have escalated.

For medical claims, even pre-Covid, [it] was beginning to become a problem, and medical premium increases are not new. They’ve been happening for many, many years. But Covid, there was a bit of a respite. In 2020, nobody wanted to go to the hospital, so claims actually went down by 8 per cent.

In 2021, they were up modestly, but in 2022, 2023, and 2024, they spiked to unprecedented levels. They spiked 33.7 per cent in 2022, and I can tell you from our data, they’re driven mostly from volume. The average cost of care has played a much smaller part of the claims inflation than the volume piece. However, the trend has been going down steadily since, with first quarter numbers for this year looking encouraging.

The high number of one-night hospital admissions — which made up 35 per cent of total admissions between 2018 and 2024 — as a potential red flag, suggesting that some of these admissions may not have been medically necessary.

Most plans will not pay a claim because they weren’t admitted. And so the doctor says, ‘Why don’t we admit you overnight for observation?’ and the claim is paid. That case could have probably gone to a general practitioner (GP) clinic, but instead they sought treatment at a hospital where they were admitted to pay the claim, and that adds to the claims inflation.

Missteps In Medical Plan Design, Poor Communication On Premium Hikes - the design of insurance plans has contributed to the overuse of health care services. It was missold to some degree, referring to the early promotion of cashless medical cards in Malaysia. Agents could say, this is like a credit card. You can go into the hospital and basically you can get anything you want.

And over the years, companies have tried to come up with richer and richer plans, bigger and bigger benefits – you have some plans that have a RM10 million annual limit, unlimited lifetime benefits, and all those things have contributed to the encouragement of consumption and provision of services.

Much of the industry’s communication around premium hikes has failed to gain public trust.
There is some improvement needed in the way insurance companies and the industry communicate the need for rate increases. It seems like in hindsight, you just get a letter – that says your premium is being increased because of medical inflation, and that’s just insufficient.

Basic Medical Plan In The Works - LIAM is now working with BNM and the Ministry of Health (MOH) to develop a basic long-term medical insurance plan for those seeking lower-cost coverage.

This is something similar that has been done in Hong Kong, in Singapore – it’s really to make sure that people who want to maintain access, regardless of how expensive premiums can be, this is the lower-end choice that allows people to stay in the system and they can access private care and they could also choose to get higher, more expensive and comprehensive coverage if they want to do so.

The association also supports diagnosis-related groups (DRG) pricing, which will be used initially in the government’s pilot Rakan KKM program, expected to be rolled out by the end of this year.

Lulu Hypermarket Existed Malaysia

Lulu Group is shutting down its hypermarkets in Malaysia, while keeping its wholesale division in the country.

Lulu Group, based in the United Arab Emirates, had been making various rounds of promotions and clearance sales at its outlets earlier this year, culminating in a closure notice posted on the doors of its first ever outlet at CapSquare in Kuala Lumpur about the cessation of operations effective June 9.

Lulu Group had six retail outlets in Malaysia (as at October 2022) when it opened a store in Johor Bahru. The company’s retail operations entered the Malaysian market back in 2016, and Lulu Group pledged to invest RM1.3 billion to open 10 outlets in Malaysia within five years.

There were also news reports of clearance and discount programs at one of Lulu Group’s outlets in Indonesia. They are other sources that reported the closure of Lulu hypermarket at QBIG BSD City, a shopping complex in the province of Banten, by the end of April.

Canada 355 Year-old Company Shutting Down

On Sunday, a month after it marked the 355th anniversary of its founding, the Bay, as it is commonly known, is permanently closing its 80 department stores throughout Canada.
The company was much more than just a retailer and the last traditional, full-line department store chain in Canada. In 1670, Britain, which claimed part of present-day Canada, set up the company as a fur trader and granted it a vast stretch of territory equal to what is about a third of Canada, without asking the indigenous people whose land it was.

Long before US President Trump’s trade war and his calls to make Canada the 51st state stoked anti-American sentiment in Canada, the purchase in 2008 of a cultural institution like the Bay by Richard A Baker, a New Yorker whose family controlled an array of shopping malls, was widely viewed with suspicion among Canadians.

At first, Baker made good on his promise that he had not bought the Bay for its real estate — although he did cash in on that later. His investments in the stores and his appointment of Bonnie Brooks, a respected Canadian retailer, as president and chief executive turned Hudson’s Bay sagging fortunes around.

To compete with the rise of online retailing, Baker invested heavily in the Bay’s e-commerce.
And part of Brooks’s revitalisation involved playing up the company’s heritage. Merchandise, from measuring cups to wooden canoes, started appearing bearing the distinctive green, red, yellow and indigo stripes of the Bay’s “point blankets.”

Many parts of the five-story store were already empty or filled with small armies of mannequins, boxes of clothes hangers and store fixtures of every imaginable variety — all for sale. Mid-last week, the most popular of those new offerings seemed to be indoor-outdoor rugs marked down by 90 per cent. A steady stream of shoppers walked out struggling to haul them away.

China Rewarding Whistleblower On Medical Fraud

China’s National Healthcare Security Administration (NHSA) has launched a tip-off service via its official WeChat account that enables organizations and members of the public to report leads on medical insurance fraud. Under the terms of the scheme, eligible informants will be rewarded with a one-time payment ranging from ¥200 (about US$28) to ¥200,000, according to the administration.

Noting that the misuse of medical insurance funds undermines public interests, NHSA urged the whole society to make efforts in combating the problem.

The Chinese government has vowed to continue strengthening oversight of medical insurance funds to ensure every penny is maximised for the benefit of public health.

Other efforts to prevent medical insurance fraud include the development of a system to validate healthcare professionals who are able to process medical insurance funds. Elsewhere, a drug traceability code – an electronic ID – is being considered for every medication. The hope is that this will curb fraudulent activities such as the resale and substitution of medications people are taking, as well as the abuse of medical insurance cards and fake prescriptions. The problem of abuse of medication related to insurance funding is already being addressed through a scheme that encourages pharmacies to integrate with a new reimbursement system for provision of outpatient services. The scheme enables those with medical insurance to be reimbursed for the cost of their medication at these pharmacies.

The Xinhua news agency reports that in 2024, China’s medical insurance watchdogs recovered ¥27.5 billion of misused medical insurance funds, with a total of 10,741 suspects arrested.

Malaysia Insurance Fraud Rising

Insurance fraud continues to be a significant issue in Malaysia, with millions of ringgit lost in scams each year. In the past five years, 97 cases of insurance fraud have been recorded, resulting in RM8.57 million in losses.

Common fraud schemes include staged accidents, false injury claims and even faked deaths. In some extreme cases, policyholders have resorted to arson to collect
insurance payouts. Fraudulent activities include criminal breach of trust by insurance agents, causing RM3.26 million in losses, and false claims against the Social Security Organisation, totalling RM4.95 million. The most common fraud involves false accident claims, which have led to losses of RM226,402.10.”

General Insurance Association of Malaysia underscored the importance of vigilance in a world in which fraudsters are increasingly using advanced technology, including artificial intelligence, to deceive victims. Insurance fraud is a crime that affects everyone, leading to higher costs of goods and services, and resulting in insured properties being unnecessarily damaged or not repaired properly.

The association encouraged the public to use the Semak Mule system and the National Scam Response Centre hotline 997 to verify bank accounts and report suspicious activity. The insurance industry is making strides in preventing fraud with systems such as the Fraud Intelligence System, which tracks fraud patterns across insurers, and the Claims and Underwriting Exchange system, which allows insurers to cross-check policies and claims.

Limited resources make fraud investigations challenging. Consumers need to ensure their agents are legitimate by checking their credentials on Bank Negara Malaysia’s approved list of agents.

Health insurance scams, particularly those targeting Takaful policyholders, have become more sophisticated. Fraudsters often impersonate legitimate Takaful operators, phishing for personal and banking details through fake calls, emails and messages under the guise of updating records or offering exclusive benefits.

Malaysian Takaful Association advised consumers to verify agent credentials through the association’s online registry. Avoid cash payments and always pay premiums directly to the insurance company or Takaful operator while encouraging policyholders to be cautious about sharing personal information.

By staying informed, verifying agents and promptly reporting suspicious activities, Malaysians could better protect themselves from falling victim to insurance fraud.

Malaysia General Insurance Outlook 2025

Malaysia’s general insurers will be under pressure to consolidate and increase premiums to counter squeezed returns under stricter capital rules that will take effect in 2027. 

Insurers that fail to adapt or scale up could become acquisition targets. Malaysia’s insurance market is expected to continue growing, but players may need to raise personal premiums “to preserve shareholder value.”

The incoming solvency rules force insurers to provide capital for increased risk from floods that have become more frequent and more severe, among other charges. The flood event in 2021-2022 caused about $700m in insured losses. Insurers may need to improve catastrophe modelling capabilities.

Flood risk calibration under RBC 2 would heavily depend on how insurers integrate exposure data into pricing, reinsurance structuring, and capital projections. Stricter capital rules under RBC 2 could boost demand for reinsurance, with foreign players likely to benefit amidst strained domestic capacity.

Building this expertise will not be cheap. The industry faces upfront and recurring costs—from licensing vendor models to hiring or training actuarial talent. Human capital is a particular pressure point. There is currently a gap in specialized knowledge within the market and amongst individual insurers.

Insurers should also upgrade operations, including finding other ways to test scenarios, assumption reviews, and internal risk assessments—all of which will stretch budgets and timelines.