Life Insurance FAQs
How do I know whether the agent is authorised or not to sell life insurance policy?
A life insurance agent is a archetypal of a selected life insurance company and can provide advice on the products marketed only by that life insurance company. An agent who sells (life insurance) products is registered with the (LIAM) Life Insurance Association of Malaysia and is required to pass a pre-contract examination, conducted by the (LIAM) Malaysian Insurance Institute. In merchantry with a life insurance agent, always impose seeing his / her authorisation card that is issued by Life Insurance Association of Malaysia (LIAM).
What is the difference b/w a participating and non-participating policy?
A participating policy would enable the holder to share in the profits of a (life insurance) company, whereas a non-participating policy doesn’t have this right. Profits that are allotted to the participating policyholders are usually in the form of reversionary bonuses or dividends. These bonuses or dividends are not guaranteed and can increase or decrease depending on the investments returns of the life funds.
How will a life insurance company calculate my risks?
The risk class or mortality of a policy-holder is determined by an underwriter using the underwriting process through which a life insurance company would decide whether or not to accept a risk. The risk of death is determined by several factors such as sex, age, habits, personal and medical record, occupation, etc. The life insurance company’s decision to insure your life is based on the information provided in the application form, the medical examination report (if needed) etc. Therefore, you should disclose in your application form fully and truthfully all the facts so the life insurance company can be fair in its assessment of the risks involved.
If I fail to pay my premium on time what will happen to my policy?
The policy contract provides for a ‘grace period’, which gives the policy-holder an extra time after the due date for the payment of the premium. During this period, you can still pay your premium and the life policy still continues to be in force. For monthly mode of payment, the grace period is 15 days, while for other frequency of payments (semi-annually or annually), it is 30 days. When your life insurance policy has lapsed, you may revive or reinstate it to full force within a period of time and under certain conditions such as declaration of your state of health at the time of reinstatement.
If I cancel my policy within the free look period can i get full refund of premium?
Yes, under the free look period, you’ll cancel your life insurance policy within 15 days by returning the policy to the life insurance company after you’ve received the policy document. The premium that you’ve paid (less any medical fees incurred, if applicable), will be refunded to you.
Should I cancel my current policy and replace it with new one?
Since buying a life-insurance policy is a long term commitment, it’s not advisable to terminate your policy early as you’ll not receive the overall amount of premium that you just have paid because surrender value is less than what you’ve paid.
Replacing a current policy with another is not in your best interest because the new policy is likely to be at a more, higher premium as you are older. There’ll also be an initial cost of writing the life insurance policy for a 2 time. Inordinately, the 2 yr. period of contestability will begin again. Moreover, the present life insurance company can often make the changes that you just want at lower cost to you.
How much amount will I receive if I surrender my policy?
When a life insurance policy is in effect / force for a yrs. (normally a minimum of 3 yrs.) it would acquire a whole cash value. The cash value is the savings portion of a life insurance policy. It is derived when your premium payments are more over than the cost of that insurance, whereby the surplus goes into a cash value account & draws interest.
If you choose to surrender your life policy, the life insurance company will pay you the cash value, conjointly known as surrender value. You’ll suffer some loss if you surrender your policy before the maturity time period.
Should I pay my premiums through the agent?
You’ve the choice of paying the premiums directly to the insurance company or as well as through the agent. If you choose the option to pay through the agent, you must make sure that the cheque is written within the name of the insurance company only. You must also make sure that you receive the receipt from the insurance company.