I don't know how you buy life insurance, but here's my take on buying life insurance (otherwise, it doesn't quite make sense to buy anything more than our liabilities):

There's an age-old saying from the far-east regarding wealth, that every 4th generation starts over from nothing.
There will be a first generation that works hard and builds something for himself.
Then comes the second generation that succeeds it, and expands the wealth.
Growing up rich, the third generation spends it, and likely spends it all.
Growing up rich, the fourth generation is built and trained to spend, but now has nothing to spend.

Life insurance can break this cycle but of course it cannot do it alone.
Some measures of control is needed to ensure a continuous flow in the pipelines into the right hands for the right purposes.

Your estate planning such as a will, trusts, are the pipes and joints. Life insurance would be the water tank full of water to last throughout the dry spell.
This sounds great but how many can actually afford it? That's true! Cost is real and the pinch is real!
But like all things progressive, everything started somewhere with the first step, which laid the foundations to the second step, the third step and beyond.

The important thing is for us to start. Equally important for our successors to continue to do the same, hopefully in a larger amount.

1) How do you budget what the sum assured or payouts will be what you need? Would you look at costs of treatment (surgery, medication, consultations..etc) for the 36CIs + costs of staying in hospital bed per day ...etc.? (someone mentioned in v2 that factoring in 4% for inflation every 10 years is probably a good idea as well..)
A: There some general strategies. In general, most people would use their liabilities as a benchmark of roughly how much sum assured they need. Some also go by their business annual turnover, in the hopes that cash is readily available to their wife and kids to keep the business running. Some just go by the going rate of funerals for the next x amount of years. To sum up, it's wealth retention, wealth creation, or simply just last expenses.
Medical inflation is different from everything else.
Medical inflation as reported by KKM is around 14%, while private sector is claiming it to be above 23%!

2) How do you budget how much you would need in the event of early or advanced diagnosis of 36CI? Is this the one that is the norm to put a zero behind your annual salary?
The norm is far from putting a zero behind your annual salary. In fact the norm is within the range of 30-50k, under-insured. It is different from yesterday's Star article simply because Malaysians in general do not value life insurance as much as the next iphone, the next property, etc.
10-times our annual salaries is a suggestion, a yard stick to which we can choose to follow or not to follow simply because our finances differ.

3) Okay, a bit of a detour here. Someone did mention to me that GH actually has all the infrastructure in place to treat patients who are dignosed with any of the 36CI. That was his argument for not getting insurance. I assume most of the coverage for medical/health/36CI insurance is budgeted for private hospitals? So private hospitals are better than GH? really..?
Yes, GH has all the necessary equipment to treat majority of our illnesses. In fact, whatever private hospitals can't provide, the patient will be referred to GH.
To best answer your question, I provide an illustration:
A can of Coke is RM2 at your local kedai kopi. But the same can of Coke is RM9-RM15 in a french restaurant or a hotel.

4) If insurance is viewed as a form of hedge against potential risks, returns shouldn't be a consideration right? And yet I see many talking about cash value, cashbacks, discounts ..etc. being a factor in deciding the most suitable insurer or policy. What is more important here, the potential returns or the protection?
Every life insurance policy comes with some kind of savings factor. It is a good feature but unfortunately the savings feature has caused many to confuse it with investment, and place the ROI at a higher priority than it should. In fact, your question is the question I personally ask my potential clients when it comes down to them biting on the potential returns.

5) If you are getting a new policy, would you consider the guarantee that premium rates will never go up as a priority?
Yes I would especially with medical insurance. I won't want to wonder if my funds can stomach my medical insurance premiums when I'm 70!
I have better, happier plans for my money
Besides that, fixed premium payments makes it easier for me to budget myself.

The premiums can be fixed with an ILP. Yes, the cost still will increase but I can effectively fix my premiums at a certain level.

I don't know about others, usually I use ILP to fix the premiums, especially with medical/health insurance.

As for CI and Life insurance, you can go with a separate policy or include it into your ILP as well or buy separately on its own.
Best to meet up with your agent or contact any of us on your own and bring your former agent (your friend) along because he/she would best know about your existing policy, and how to complement it in your best interest.

I hear what you're saying. But I pray that you can also hear what I am saying.

ILP package is meant to be sustainable till the insured attaining age 100. Not 20 policy years.
Shorter period means lower premiums to pay. Don't forget if you want cheap, cheap is what you'll get = shorter sustainability.
I apologize in advance because now you're sounding like a person who wants Grade A for the price of Grade C.
At best you'll get a nicer looking Grade C if you're paying at a Grade C price.
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I urge you to look into the cost of insurance between an ILP medical rider and a standalone policy.
The difference over the years is, i pray, a big enough a sum to be significant to you.

Secondly, I also would like for you to take a look into the fund performance of these insurance companies under their ILP. I can't guarantee the future performance, but tell me if these funds are so bad that they are bound to be doomed?

Thirdly, I would also ask if you invest into anything at all? UT? Property? Shares, derivatives, futures?
If you don't, then your arguments against ILP makes sense.
If you do, then for the benefit of all the forumers here, please share your portfolio (in ratio, picks, etc) without revealing your amount of monies with us? You seem to be getting guaranteed returns!

Ever encounter primary school students blaming the education system for their bad grades?
Come on, we're better than that here.

ILP "fixed premium" will be higher than standalone premium, eg.
if standalone medical premium is RM900, ILP could come out with RM1500 or even more.
As ILP needs some money to channel to investment part.
Yes, the premium is higher now. However, over the long term when accumulated, it is in actual fact, cheaper.

Yup, cost of medical coverage is lower than standalone one (as insurance company can make some money through investment portion, hence can provide cheaper cost of medical coverage).
There is no free lunch.
I would like to enlighten you about the few available insurance schemes.
1. Traditional Life Insurance - Not transparent, not flexible, very rigid.
2. Universal Life Insurance - Not transparent, fairly flexible with some options, still pretty rigid.
3. Investment-Linked Life Insurance - Complete transparency, very flexible, very accessible.

The money made from ILP investment portion goes directly to the customer's account value, which the customer can withdraw at any time for any purpose. After withdrawing, of course it affects the sustainability of the policy.
On the flip side, customers can also put more into the account to buy units for reasons such as insufficient value in the account to pay for the cost of insurance, which have to be paid anyway to sustain the policy. Or the customer can instruct the policy to not use the money from ad-hoc top-up to pay for the insurance costs.

Pay grade A premium will get grade A coverage.
Nobody expected pay grade C premium to have grade A coverage, everyone know insurance company is not charity organisation.
Welcome to the real world. I'm sure by now you've come to terms that an insurance policy does not equal to a social safety net.

The agent should be the one explain all what is ILP about, and not directing some one doesn't know well about insurance, by saying if one wants to have fixed premium for medical coverage, ILP is the one provide fixed premium for it.
And I completely agree that the agent should explain what ILP is all about, and the customer shouldn't buy unless they know well about the features and benefits. But my friend, can ILP give you a fixed premium for your medical coverage? You have to pay a bit more, but you will also get exactly what you want, which is a fixed amount of premium to commit so it is predictable, allowing for more definite plans with their money.

This is not a right message to someone totally doesn't know about insurance. He/she may totally misunderstand it.
Would it be better for me to match their budget now, and have them pay more as they age?
Why would anyone do that when a lower rate with better features is available right from the get go?
Would you do that?

One day, if the investment portion performs so bad, and policy holder need to top up the discrepancy due to insufficient fund from the investment portion to compensate the cost of insurance, then how?
Blame the agent never said or can claim from agent?
Should that ever happen, there are features in ILP to guarantee your coverage for at least 5 years on the condition that you have never missed a premium payment, or withdrawn from your policy account value.
You can blame the agent and IMO the agent should also bear the cost to top-up if the customer bought at the premium as recommended by the agent.

Whatever posted, is just want to channel a correct understanding about ILP.
Thank you for your kind initiative! All of us in the industry is forever indebted to you.

If something is unknown aka investment return of ILP portion is not guaranteed then just explain it to clients, what is about.
The industry has been doing that. And we go above and beyond just sharing about a product and show you exactly what ILP can do for you. It may or may not suit your management style, but it is the most transparent and the most flexible option in the market.

While if the ILP fixed premium is not guaranteed to be fixed forever, and it only can be fixed if the investment return hit the projection, then just tell so.
Fortunately it is not sold online isn't it? Don't you think it is such a blessing that you can have an agent for you to really grind and squeeze every bit of information in person?

It is as simple as that.

Why drag so many issues until need to show portfolio etc, and seems like so scare that people knowing the fixed premium is not guaranteed to be fixed forever?
It only fixed if everything fall into the projection or better than the projection.
Well, to be frank you do appear to be giving the impression that non-guaranteed investment return was a foreign idea to you. Hence I became very interested in your portfolio.
The ILP plan and its mechanisms has been explained by many here in V2.
And here you are harping on "what if it fails? It's not guaranteed to be fixed forever! etc..."
Since you mentioned, i'll lay it down "when it fails":
1. If you have never missed a premium payment and never withdrawn from your account value, you will have 5 years of guaranteed coverage. After 5 years, you will have to pay the difference.
2. The cost of insurance for your medical rider will be lower than if you were to buy a standalone medical plan.
3. The accumulated total that you would have paid for your medical rider will be lower than if you bought a standalone medical plan.

Come on, we're way better than just "cheap" here in this forum. Unless "cheap" is what we are to you.

ILP is a simple bundled or combo product. It is not a magical tool. It has its own strength, but has its own drawback as well.
I know ILP has good commission, but it is still agent responsibility to do the explanation about its mechanism especially for newbie in insurance, instead of just a simple statement ILP has fixed premium, you don't worry about raising premium like in standalone policy.
Why would you think we are so eager to meet in person? What exactly do you think agents do in a presentation appointment? Before the agent says "sign here", we would have met at least once, I would know about your work, your spouse, your kids, your plans for the future, your worries and concerns along the way, and you would know all that about me as well. Trust me, I want to know who I am acquiring as a customer, and you would most definitely want to know your agent too. Want to know if your agent is a good agent with good advice? Just observe the people that he hangs out with because they are likely his customers. If they are doing well, he contributed to that in a greater or lesser way.
Every agent prefer 35% sales commission over 20%.
Traditional life insurance gives us 35%.
ILP gives us 20%.
But lots of agents sell ILP because many times it is just a better arrangement and it keeps a lot of options open and available for the customers too.

You're right to say that insurance is primarily catered for people with a family. And quite frankly it makes sense for the breadwinners to take care of the family members they leave behind.

But there is so much more than just protecting the family members, preparing some funds for them, etc.

For single people with their unique backgrounds and life experiences, the objectives can be different, or in some cases, VERY different. While a medical insurance, PA, and Critical Illness cover would make sense, a life insurance appears to be of no purpose. And for some, betul-betul no need for a life insurance.

Among my better clients is a single male heading for retirement. Chartered accountant.
Never married, no wife, just him. I had a good relationship with him selling, reviewing, and maintaining his insurance portfolio. We happen to play badminton at the same badminton court, and one day he approached me with a question on his mind, asked me if life insurance can do that for him.
The answer was yes, with some help from his input, yes.

Rate wise, frankly everybody also still in a "look-see" mode.

Claims wise, also pretty straight forward, have to submit required documents.

But roadside assistance, by far Allianz and AIG service providers are
As for towing service, Allianz towing distance by far is the furthest.

These two are the ones with the better feedback from my customers and I personally purchase Allianz.

What do you do?

supersound is a professional at being cheated.
Reading about his gullible saga is like watching action scenes from bollywood.

In business there's also no guaranteed profit. People still go for it anyway.

In unit trust, stocks, shares, derivatives, futures, forex, and all forms of trading there's also no guaranteed profit. Yet people still go for it.

In purchasing a property, there's also no guarantee that the property market will continue climbing. Yet people still go for it.

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Most of our knowledge is based on observing how things behave or perform in the past. Then we come up with logical estimates on how it will behave in the future, and make plans based on that estimate.
The same goes with the non-guaranteed portion in life insurance as well as everything mentioned above.

So how would the funds from insurance companies fare compared to all the above-mentioned?

My opinion may be biased as I am an insurance agent.
But I encourage you to ponder in that direction with regard to buying an investment-linked life insurance and attaching your medical insurance as a rider on your ILP.

Darling,

I think he/she is talking about medical insurance.

And darling, I think you're right for the most part about ILP.
But hor ILP is a whole life non-par plan. It is designed as a term-life + UT kind of plan.
If the yield return is very low this year, no worries, you get to buy more units.
But hor, let's say in the later years when we all shopping for burial grounds but Najib still haven't resign and the hippo still got hair, then I think we need to do a top-up lah.

Otherwise, premium naik or not, ILP riders COI charges confirm cheaper than traditional plans.

Dear forumers and colleageus,

I would like to point out to make it clear that insurance premium sizes will differ for some. Some of us will pay more than others just like how some of us would pay upwards of RM5mil for a private residence. Some of us would pay a premium for a car with more airbags, some of us would pay for the gadgets and leather seats for the same car that caters for the same exact purpose.

Dear friends, we all have different levels of affordability, different spending habits, different pathways to a common objective that is to be financially secure and stable. We want to feel secure with our finances.

I would like to shamelessly speak on behalf of all planners, advisers, agents, that it is our common interest to solicit business opportunities and in doing so we deliver the right services and advice to the right people in the right way. I pray that this statement applies to all of us in building our careers, and strengthening the finances of our friends here on LYN, as well as our friends around us.

Dear colleagues, while it is to the best interest of the forum and the forumers here that we compete with our own value propositions, I wish none of us (advisers, planners, and agents) will suggest to any prospective customers that they are paying an unfair rate, to cancel their existing policies WITHOUT EVEN LOOKING AT THEIR EXISTING POLICIES AND WHAT THEY COVER just so we can secure the business opportunity, especially with life and medical insurance policies.
Such a practice is foolish and I highly condemn such practices as it is very unprofessional to do so.
A vibrant environment is good for everyone, consumers and providers alike. Let's keep it competitive in the right ways and everybody wins. Otherwise, the victims of unethical practices will only be our customers.

This is a great business to be in where in helping others around us, we build ourselves up too in terms of career and relationships. Though there may be a few bad apples here and there, let's not lose sight of who we are, the practicing standards we carry, and our common mission to have every Malaysian adequately insured.

I'm done ranting now.
Kthxbai

Is it a recent occurrence?
I am from AIA, and this is shocking to know. Usually agents like me will want the commission, and hence follow up closely with the renewals. I even hired someone to keep an eye with each and every renewal.

My honest advice:
Sit down with all your policies, do a summary of it. We want to deal with numbers and figures, not emotions.
Don't let your impulsive emotions towards an irresponsible agent bring you down.
Maybe you want to consider changing a servicing agent to someone like me.

On a similar issue, for those of you paying your premiums with your debit cards,
you will need to call up your bank to notify them on your premium payments. It's a one-time call, and it will be effective for future premium payments.
Hope this is helpful.

Auto renewal usually it's by credit card payment.

There are few payment options across all insurance companies: monthly, quarterly, semi-annually, and annually. It can be changed from one to the other at any time.

Your personal insurance doesn't cover dental.
Same goes to the EB market (your employee benefits program).

However, some employers do offer something like a RM200 annual dental benefit on top of the employee medical benefit program purchased from insurance companies.

Hey bro, we do not need jokers trying to be funny and dance around a procedure that is not covered, dismissing it as "beauty procedure" and then ask someone who has went through the procedure and cannot claim to think about other more serious illnesses that cost more?

Are you supersound's former agent?

This post has been edited by JIUHWEI: Feb 27 2016, 10:12 AM

Under new regulation (FSA to replace insurance act),

the policy owner would need to appoint a trustee to change the nominee.

The old practice was that the insured can also be the trustee.
New ruling: the insured cannot be the trustee of his/her own policy.

In order to change the nominee, the policy owner would have to appoint someone to sign as trustee, in order to change the nominee.

Correct.

However, the fishy issue of an existing unknown nominee is unprecedented in my agency.

By the end of March or early April, you should be getting your insurance statement.

In the insurance statement, it will be listed how much premium is for Life, how much premium is for your CI rider.

You can claim Life amount tax relief but not CI.


*Very important: CI is not medical cover.
No "buts",
No "i thought",
No "my agent said..."

The above is applicable to ILP policies.