Hi, the general rule of the thumb on how to calculate how much Life/CI/TPD is to be able to provide 10 times your annual income. This is even so if you have dependents.

Having said that, insurance is NOT the only form of 'financial protection'. Properties, stocks, bonds etc (do a will) may also constitute to the entire package of your Financial Planning.

As for the Life/TPD/CI that you had for 3 years, mind sharing how much cover for it and from which company?

For those medical cards that doesn't have co-insurance, you might want to have comparison of the insurance charge in later years. Those without co-insurance the insurance charge can be rather costly. Get screwed now or later (when you're no longer generating an income), which one do you prefer?

Yes it is true that when you get it early your insurance charge is lower, but the fact is that INSURANCE charge GOES UP by age, irrespective of when you get the medical card.

If you are paying RM 200/mth now, 40 years later (if you dont do any upgrading) you may also be paying RM 200/mth. But the insurance charge will go up.

Example, if your insurance charge is RM 1800 per annum now, 40 years later it may be RM 3000/mth (the figures here are for discussion only). So who will pay for insurance charge? It's from your cash value.

For those working people who was told by their agent that they may be able to withdraw X amount when they retire sometimes buy into this idea. Sure you can withdraw, but do consider who will be paying the premium when you retire, without an income.

On average most of us retire at age 60 and lives up to age 80. That means the medical card needs to sustain for another 20 years if you stop the premium paying.

Buying a life insurance as the word 'life' implies is a lifetime commitment.

It is good that your company covers you for medical. If it is possible, always ask for a copy of the policy document and know what you have. Most of the company medical cover have limits to what you can claim.

On your questions ....

Since I'm from Prudential, I will only comment on how Prudential medical works in the event of hospitalization.
1. if exceed room and board limit (say 200), will there be 20% co-insurance or additional charges?
A. You'd pay the difference. For Prudential, you'd pay minimum RM 300 up to a maximum of RM 1K if hospitalized.

For example if the hospital bill is RM 15K, the maximum you'd pay for the co-insurance is RM 1K. But if your bill is RM 3K, you'd only need to pay RM 300.

We would normally attached hospital income of RM 200/day to your policy. If you're hospitalized for 10 days, Prudential will reimburse you back RM 2K.

2. are they guaranteed renewal? if yes, till what age limit & then subject to yearly?
A. For Prudential - Yes it is, always had been. Most medical cards nowadays we'd extend it to age 80. Beyond that it can be rather costly, but when your income improves, it is always an option to look for upgrading.

3. do you see the need in topup cash to the fund (for ILP) in the later stage? as early as 50?
A. This is the reason why people start their insurance policy early. Ie, to be able to have more time to generate more cash value so that it can have more cash value that they may be able to withdraw some, while still having extra to see it that the policy is able to auto run if they cant pay the premium after retirement.

If you're investor savvy, you might want to monitor how the funds perform, do top ups when the fund is on the down side and when the fund goes up again, switch it to bonds for profit locking etc. But then again, you need a good agent :-)

HTH

Roy Steven Ung, HP 016-451 5957
Prudential Assurance (M) Bhd
KWSP Penang

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Added on March 29, 2012, 8:16 amHi there, please do allow me to elaborate.

If it is accidental cases, most of the time the ambulance will bring you to the nearest GH, unless the accident occurs right in front of the specialist hospital.

Since you have medical card, you could ask the attending doctor for permission to transfer to the nearest panel. Depending on the condition (whether the move will be life threatening or not) the transfer might be granted by the attending Dr.

If you choose to seek treatment at the GH, you dont have to pay the minimum co-insurance of RM300. But once you're discharged from the GH, you'd need to settle the GH bill and claim from Prudential later because we can't issue GL to GH. Prudential will then reimburse based on the bill.

This process is also applicable for all other insurance that don't have alliance with the GH.

Should you seek treatment at our panel hospital, show the card and you'd need to pay the minimum co-insurance of RM300 (depending on hospital). If your bill is over RM 10K, the panel hospital will request you to top-up, up to a maximum of RM 1k.

However do note that if the bill is RM 100K, and assuming that your annual limit is RM 75K, you'll need to pay the difference of RM 25k, on top of the RM 1K co-insurance. (One month of ICU (due to accident) can costs that much at a private hospital.)

Once discharged and upon your last followup (followup is based on reimbursement basis), we'd help the client make a claim for the hospital income
and whatever bills from the pre-hospitalization and post hospitalization.

Hopefully the above clarifies the claim process. If not post, we'll try to help.

Roy Steven Ung, HP 016-451 5957
Prudential Assurance (M) Bhd
KWSP Penang

This post has been edited by roystevenung: Mar 29 2012, 08:16 AM

Hello. You did not mention the details of your existing cover. PM me if you don't want to reveal that information here.

Having said that, it is never beneficial to the client to cancel/surrender a policy no matter what. Add on, yes, but cancel ... hmn. Here is why:-

1. For the same amount of premium (RM1K) you will not be able to get the same cover that you had 13 years ago as insurance charge goes up by age.

2. Whenever you start a new insurance plan, you're subject to the 120 days waiting period for specified illness & pre-existing illness. If you really want (due to budget constrains, do let the new plan run for at least 2 years for incontestability clause before doing so.

3. Funds allocation starts back from zero. On your upgraded investment insurance plan, it is already the 6th year. The normal allocation would be 1st year 40%, until the 7th year this will be 100% to buy you units.

Whenever you start a new plan it starts back from 40%. That is why when you take up a new policy you're losing end. (commenting on how Prudential policy allocates the fund).

1800 0.4 720 720
1800 0.5 900 1620
1800 0.6 1080 2700
1800 0.7 1260 3960
1800 0.9 1620 5580
1800 0.9 1620 7200

Hope the above clarifies some of the doubts you may have.

Regards,

Roy Steven Ung, HP 016-451 5957
Prudential Assurance (M) Bhd
KWSP Penang

1. You can read about incontestability clause http://legal-dictionary.thefreedictionary....tability+Clause
2. Prudential has it, if those that dont have, hmn... sorry cant comment as it is for the benefit of the client.
3. Yes
4. Pruvantage plan though is not that flexible, covers take home drugs, implants. Implanted pacemaker costs RM43K excluding surgery (at GMC).

The life portion term is age 100. However, once your cash value has accumulated you may opt to withdraw leaving a balance of RM2K in the account. When you withdraw, always make sure the fund is on the high side.

Well, at times due to urgency, you may have to withdraw when it is down. Same goes to all investment, I suppose.

Alternatively when you retire, you may choose to lower down your life cover (when your responsibility has lessen, ie house fully paid, children all grown up etc) and perhaps swing over the life cover to medical. People say old car are more prone to breakdowns.

Mostly it boils down to your income, commitment & whether your family depends on you to bring food on the table. The general rule of the thumb is 10 times your annual income.

Normally that would mean a huge sum of premium, and that's why people opt based on their affordability, of which they could increase when their income increases.

A typical cash flow will help you have a general idea of your commitment vs how much cover you need:

1. House/Car/Credit card installment
2. Electricity/Water/HP/Telephone/StreamyX/Unifi/Astro/ bills
3. Yearly angpow to parents/children/
4. Monthly Maintenance of car/house.
5. School/Tuition fees
.... and so forth

Touch wood if tomorrow we are down with a CI/accident that renders us totally permanently disabled, we can't tell the electricity company to waive our bill. If the car is still on installment, the 3rd installment missed will have people knocking on your door.

Medical would also comes in handy as many are often caught off guard not realizing how much expensive it could be until they are hospitalized. This is even more evident if the hospitalization is due to a serious injury/disease.

You could start off with a basic lowest plan to get the cover if your company is providing some form of medical cover and increase it along the years in line with the medical inflation in Malaysia.

If you need a quote, PM me the following details:-

1. Name
2. Date of birth
3. Smoking Status
4. Gender
5. Occupation
6. Approx. Annual Income (I'm from Prudential, not from the Income tax dept so dont worry)

On top of the getting yourself admitted into the hospital by waving your medical card Prudential also have a rider called PruAcciMed (formerly known as Accidental Medical Reimbursement).

This is how it works. If we are involved in a minor accident with bruises & cuts and dont see the need to get admitted, one may go to a nearby hospital / clinic to do dressing. The minimum benefit for this is RM 2000, and it is pay & claim process up to the bill & benefit limit.

Perhaps he is referring to this benefit. Anyway if need second opinion, just scan the policy document page that list down the benefits and email it to me. stevenung1971 at gmail.com

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Added on April 2, 2012, 9:08 amLet me get a hold of Pruvantage policy and I'll get back to you. Its stated in the policy contract.

ATM, we do not have any info on whether there will be upgrading excercise for Pruvantage to upgrade to PruFlexiMed. If we have any info, we'll post.

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Added on April 2, 2012, 9:32 amThe only way to find out is before getting admitted call your agent. Our job begins by checking your policy details, whether the policy is in force, what are the benefits and inform back to he client.

Claims process are normally 2-3 weeks upon discharge from the hospital.


This post has been edited by roystevenung: Apr 2 2012, 09:32 AM

After 'ransacking' the documents, I finally found my policy document for Pruvantage. Take a look under the Policy Account, Part 6 - Basis of this Policy & Premiums.

1.3 Except for fraud or exclusions as stated herein, the validity of this Policy shall be incontestable after it has been in force for a period of two (2) years from the Date of Policy during the lifetime of the Life Assured.

Hi, what is your occupation, gender & date of birth? I could calculate and run a quote for you. Also does it comes with a spouse payor? If possible list down all the benefits here so that i can give you the similar quote for comparison purpose.

If you're comparing the insurance charges whether to get plan A or plan B is irrelevant. Insurance charge will go up by age. Traditional plans from Prudential like the PruVantage plan do generates cash value, except that the premium/cash value is not tied to the underlying funds unlike the ILP plan. Unless what you're referring to for the traditional plan does not generate cash value?

It is understood that IF you want to increase the protection you'll definitely need to do top up, irrespective of whether the plan is traditional or ILP. However, the flexibility of the ILP allows you to increase the protection into the same plan. The traditional plan does not allow you to do that. A work around would be to add another policy if you want to increase the cover for the traditional plan.

Be thankful when your agent is still able to come back to you to ask you for top up to increase cover as this would mean that we're still healthy. It also shows that the agent is monitoring/responsive :-)

Also, the medical inflation in Malaysia is at 15% per annum. We used to have Rm 75 room (6 bedded) but nowadays the minimum seems to be Rm 150 for 2 bedded rooms.

It is recommended that we do a medical card/policy review every 5 years to curb inflation.

"1)Is that true if I start my insurance plan early at now, when i still in university, so that my premium for life will lower & return guarantee (I refet to traditional life) compare with ILP?"


Insurance charge goes up by age, irrespective of when you get it. Returns for INVESTMENTS are NEVER guaranteed EXCEPT for what has been paid for the coverage. ie, Life/TPD/CI lump sum payment or the medical benefit.

"2)In case, if I did not top-up or due to budget restrict, just top-up a little bit, at the end of the day, my cash value is 0?"


You don't normally need to do top ups at younger age as we'd normally include some slack into the ILP. However as we grow older, when +70 for example, the insurance charge is expensive you may need to do top ups if whatever that has accumulated throughout the years is not sufficient to pay off the insurance charges.

For example, you may be paying RM 150 now at age 25. At age 70, assuming that you maintain the same policy the insurance charge might be RM 400/mth (the values are for discussion purposes only and may vary from the actual). So from where do the additional RM 250 comes from? Its from your cash value.

The beauty of having ILP product is that once your policy has generated substantial cash value, you are able to withdraw if you need to and maintain a RM2K cash value in the account. Some clients who lost their jobs suddenly finds this feature very useful and at the same time still enjoying the coverage.

As compared to the plan that does not generate cash value, even though you had paid 10 years, lost the job and unable to pay, it'll lapse after 30 days of non-payment. Sure some may say "lapse mah lapse lor" later when got a job then continue back. The question is are you still insurable (still healthy) and having a clean medical record? If yes, then it won't be an issue to reinstate the policy or do a new one, but if not, sorry.

"3)The disadvantage of standalone MC is if I was admitted to hospital, later when comes to renew my policies will have more problem. Worse will lost my MC?"


Most stand alone medical card nowadays have guaranteed renewal features.

The real questions is whether the stand alone medical is able to be attached with riders that waived the policy should CI/TPD occurs, whether can add in lump sum CI/TPD and most importantly does not have limit on cancer/kidney dialysis.

If you were to decide on going for stand alone medical card, know what are the restrictions or short falls and top it up with sufficient CI/TPD. Also do not forget to calculate the waiver, eg, Rm 150/mth for the rest of coverage term of the medical as you will need this amount to maintain the policy should touchwood CI/TPD occurs.

"4)After looking on both plan, does Plan A really works?"

It does, if you understand the short fall and add on towards the shortfall.

"5)Is there anythings that ILP have but the Tradition life or Standalone can't gave to us?"

Investment opportunity (if you/your agent monitor the funds) in the hope to grow the cash value so that should one day you decide to retire, the generated cash values throughout the years may be able to last longer or at least until the end of medical coverage term.

Withdrawal options in times of job loss, but bear in mind if you withdraw, your cash value might not be enough in later years to auto-run your policy when you retire.

Lets not forget, when you retire at age 60, there is another 20 years to go before the medical term ends at age 80 of non premium payment and that insurance charge at later years are expensive. There are cards that is able to cover until age 100, but the premium is not cheap.

<------------------------|------------------------>
Age 25 Age 60 (retire) Age 80

ILP plans are more flexible as you can increase coverage when you need it. Do note that any increase (except being specifically invited) is subjected to underwriting.

"6)And then, seen insurance agent could get more commission from selling Tradition and Standalone insurance comapre with ILP, why most of them still advice client to buy ILP instead of Traditional and Standalone insurance plan? It's ILP really good at overall?"

Instead of knowing how much commission the agent is getting, you should be concentrating on what benefits you as the client will get and most importantly get it from an agent that gives you sound advice rather than just the one that is eager to close the case.

Its no secret that agents commission are +/- 120% of the policy sold (except for savings plans) and is SPREAD across 6 years. After 6 years no more commission, but the service continues for as long as you remain the policy.

As a young working adult the ILP plan is a very good plan that allows you the flexibility to increase your cover as your income gets better. Its a plan that I would recommend to young working adults.

This post has been edited by roystevenung: May 13 2012, 07:53 PM

Yes, but if you don't mind my asking, why would you want to do that?

Don't cancel the GE ILP as you'll never able to buy the 100K ILP again since it has been 3 years.

However, on the medical card & CI, the choice is yours if you want to get one from Prudential or upgrade it into your existing GE plan.

If you were to cancel your existing plan you're subjected to the 'pre-existing illness' and/or the 120 days waiting period. The premium variance is nominal since the policy is only been in-force for 3 years.

Keyword: GE Plan - Upgrade into the same plan, not give you another plan.

According to the insurance gurus in WIKIPEDIA ...

Endowment Plan
"An endowment policy is a life insurance contract designed to pay a lump sum after a specified term (on its 'maturity') or on death. Typical maturities are ten, fifteen or twenty years up to a certain age limit. Some policies also pay out in the case of critical illness.
Policies are typically traditional with-profits or unit-linked (including those with unitised with-profits funds).
Endowments can be cashed in early (or surrendered) and the holder then receives the surrender value which is determined by the insurance company depending on how long the policy has been running and how much has been paid in to it."


Whole Life Insurance
Whole life insurance, or whole of life assurance (in the Commonwealth), is a life insurance policy that remains in force for the insured's whole life and requires (in most cases) premiums to be paid every year into the policy.

Non-participating
All values related to the policy (death benefits, cash surrender values, premiums) are usually determined at policy issue, for the life of the contract, and usually cannot be altered after issue.
This means that the insurance company assumes all risk of future performance versus the actuaries' estimates. If future claims are underestimated, the insurance company makes up the difference. On the other hand, if the actuaries' estimates on future death claims are high, the insurance company will retain the difference.

Participating
In a participating policy (also par in the USA, and known as a with-profits policy in the Commonwealth), the insurance company shares the excess profits (variously called dividends or refunds in the USA, bonus in the Commonwealth) with the policyholder. Typically these refunds are not taxable because they are considered an overcharge of premium. The greater the overcharge by the company, the greater the refund/dividend. For a mutual life insurance company, participation also implies a degree of ownership of the mutuality.

Endowment is not ILP. ILP stands for Investment Linked Policy. Generally most of the Endowment policy when matured will pay you the sum assured whereas ILP it is based on the funds it is investing in.

Whole life is whole life (ie until we die, normally up to age 100) but term insurance is for a specific term, like 10 or 20 years term. The coverage remains until the end of the term.

By the way, why don't you ask those questions here. I'm sure that there are many agents here that are more than willing to help.

Yes, the coverage may vary, endowment is more towards savings with protection, WL & term are more on coverage.

With due respect, take note that your policy with the insurance company and not the agent. The agent is definitely not the one who will reimburse or provide coverage for you, but its the insurance company that stands behind the agent.

Agents may also fall sick, worse case scenario, death. Will you cancel your policy because your agent married a Penang girl and move to Penang?

Sorry, its not my intention to put you in that 'spot', but it's just to highlight to you that even though the agent that services you is no longer around, the cover is backed by the insurance company. The policy document is a legal binding document/contract which is recognized by law.

I've sold policies to clients who then moved to other states, but they still keep the policy because they know the importance of the policy and I'm just a phone call away.

We can Skype if you need to have face-to-face discussion, at the convenience of your home. Technology had made it possible for us to discuss things openly albeit efficiently.

I have to be honest that in the event of claim, having me to fly there is something that I can't do. Post laju is what I do for my outstation clients and not really a hassle.

Anyway, its a matter of preference. No worries if you prefer a local agent. If you need help (no obligation) or second opinion, do PM me.

Hi Awakened_Angel,

Please forward the full quotation to my email and I'll email you back the summary of the Simple Annualized ROI / Compounded ROI / CAGR.

Thereafter, you decide whether the money that you park into that plan is worth the returns/risk.

Correct me if I'm wrong Yahiko, but is your friend's insurance a stand alone plan (SAP) while yours is an Investment Linked Plan (ILP)?

Irrespective of whether you get SAP or ILP, the insurance charge will go up by age _irrespective_ of when you get it. If you get it at early age, your insurance charge is cheaper, but it'll gradually increases as well.

Suppose a person who is age 25 takes up a policy and pays Rm 200/mth. At age 25 his insurance charge is low and the premium of RM 200/mth is able to cover the insurance charge.

Assume that he don't do any upgrading/changes to the policy and now he is 70, his insurance charge at age 70 may be as high as RM500/mth (the figures shown here are for illustration purposes only and may vary from the actual).

So how come he is still paying Rm 200? The answer is the RM 300/mth is being cancelled from the cash value that is accumulated from age 25 ~ 70.

Some agents may tell you that this has savings element, yes its true. If you were to withdraw the cash value and one day decided to retire (assuming no income after retirement), who is going to pay for your insurance? Generally we retire at age 55-60, while most of the medical cards nowadays needs to sustain till age 80.

That is another 20 years of premium. 1 year Rm 2400, which works out to RM 48K for 20 years.

At younger age before we retire we may need the life/CI/TPD coverage but at older age once the children had grown up, we may choose to swing the life/ci/tpd cover to take care of the medical.

That is also why we should get the insurance at early age so that we have ample time to generate more cash value and to take care of the old person we are going to be.

Do not get confused with the term "Investment Link" = Investment. HTH

This post has been edited by roystevenung: Jun 6 2012, 12:47 PM

Even though the plan may look similar by far they are identical.

Most ILP have a rider to waive future premiums (if diagnosed with CI/TPD) while stand alone plan _may_ lack of this feature.

Advice your friend to get a second opinion on what is covered and most important what is lacking and take another plan to cover this shortfall. Don't worry, we are trained not to simply cancel people's policies.

I hope you know who to call to get the second opinion

Instead of giving you my opinion, I let you make that decision based on a real case.

A friend of mine who was a HR Manager of was diagnosed with throat cancer (due to smoking). Sure, first month even the boss visited him, friends too. Two months down the road he needs to undergo radio and subsequently chemo was prescribed. He wasn't my client, but just the drink coffee friend.

Three months later he was shocked to get a letter that his position needs to be filled and he is temporarily moved to Maintenance Dept. Out of frustrations, he tendered his resignation.

Now, imagine his situation, no job, no income, bills pilling up, home loans, kids school, credit card busted, no more company medical insurance cover!

Hence he have to rely solely on his personal medical, thank god for the waiver! Not only it waives future premiums and get to use the medical card, his children's policies are also waived until they are 25 age since he is payor. The wife's medical is also waived!

After 6 months of torment and by pure luck, he found another job. He was thankful of the insurance payment and payor. Now can you imagine if he haven't had that payor? He was out of job, no money, how was he to sustain all those policies?

In addition, certain illnesses like Stroke/paralysis one needs to show evidence of being having stroke/paralyze (records for physio, home nursing etc) for 6 months before one can claim out the CI.

If your client is bedridden for 6 months with no income, I wouldn't dare to be the agent that comes knocking on his bed asking him to pay the premium. WOULD YOU DARE?

IMO, it is definitely a must to add in the waiver. Insurance is about protection.

Coming back to your cancer, as long as there is evidence of malignancy, the CI under cancer will be payable, not necessary stage 3 (cancer).

The rider to waive future premiums is not only for your own policy but for the ones you love...

As Colaboy mentioned its the client obligation to declare any changes to his lifestyle.

Smoking status will affect his premium (non-smoker pays lesser premium) as its higher risk of getting smoking related illnesses.

Another thing that will affect the premium would be the occupation. For example if someone is doing office admin work (Class 1), suddenly have a part time job as a construction worker or lorry driver (Class 4) and met accident, the insurance company may dispute on the claims.

Well if a person who is from Class 4 and now gets promoted to become office Manager (Class 1) you'd definitely want to go to declare because this will bring down your premium significantly.

As for gender change, so far I've not have any experience in this

This post has been edited by roystevenung: Jun 7 2012, 08:53 AM