You can feel however you feel, that is your right as a consumer.

But, this product is being sold to the masses, to others than yourself, and who themselves have very different appetites, very different life circumstances/financial situations.

Anything can happen in future, 20 - 30 years is a very long time period. Consumers deserve the right to pivot according to their changing circumstances and shouldn't be penalized for it.

It is unethical, unfair and very predatory to have a product design where ITOs are incentivised to target vulnerable consumers. The ITO's financial position or standing is directly linked to the number of surrendering policies.

Another way to look at it, the ITO requires for a proportion of the insurance/takaful pool to surrender every year so that the tabarru fund (risk fund) or the non-participating fund does not have a deficit. If they have less than the expected proportion of policies surrendering, say 5% per annum, they are in trouble and would have to pump money into the tabarru or non-participating fund.

Do you know what a 5% surrender rate per annum means? It means that if an ITO had a million policies at the beginning of a 30 year policy term, they would only have around 600k policies by the 10th year, 463k by the 15th year, 359k by the 20th year, 277k by the 25th year, and 215k by the 30th year.

So, the ITO needs to go out there and find a million policies, out of whom 401k need to leave by the 10th year, 537k by the 15th year, 642k by the 20th year, 723k by the 25th year and 785k by the 30th year.

That is the number of people we are telling to go fly kite. It's just a disaster waiting to happen.

It's even better for the ITO if more than the expected number of policies surrender. They would then be in surplus position and they get to keep all the profits from it. A horrendous incentive structure.

This is the impact. For the Kaotim product, assuming 1 million 30 yr old males signed on for the RM 1 million coverage, 30 year plan @ RM 2040 per annum, a 5% expected surrender rate per annum yields over 700k surrenders within the first 24 years of the plan and an average withheld amount per surrendered policy of RM 4151 and an accumulated withheld amount of RM 2.94 billion.





Edit: I should add that this lapse supported design and pricing model is also a death supported design and pricing model, as the Asset Shares of policies terminated due to death events are also unfairly withheld by the ITO within the tabarru fund or non-participating fund (conventional). Whether a policy is terminated due to a surrender or an insured/takaful event, in this case 'death', it's unfair to withhold any remaining Asset Share amount. A surrendered policy should by right receive the policy's remaining Asset Share amount upon surrender while a death event policy should receive both the sum assured amount as well as the Asset Share amount.

So, while the above projections on the number of expected surrendered policies do not include death, it should have. Within the first 24 years, there are expected to be around 20k deaths after accounting for the surrendered policies. It would not add much to the surrendered policy numbers, but the point remains. Both the death event and surrendered policies have the same level of withheld Asset Share amounts, per policy, within the tabarru fund.

Interesting thought experiment. Most takaful models and investment-linked policies operate on a drip model, where regular deductions are made from the savings account (unitised fund account) to finance the insurance/takaful coverage component. The only difference being the frequency of drips, with some done on a monthly basis, while others weekly.

When a policy is surrendered during the period between two drips, it would only be fair for a portion of the insurance/takaful coverage charges to be returned to the policyholder. The amount returned should commensurate with the charges that would have been levied for the period between the surrender date and the end of the drip coverage period. E.g., if RM 200 was deducted at the beginning of the month for a monthly coverage, and the policyholder decided to surrender the policy on the 10th day of a 30 day month period, then the amount returned to the policyholder should be two-thirds of the RM 200 insurance/takaful charge or RM 133.3.

The question is, should this also be done for a policy terminated due to an insurance/takaful event such as death? If no, why not? I would argue that the same principles should apply.

Btw, the projections in the earlier example don't provide for a return to policyholders of the unexpired risk amounts, so that's another thing to look out for.

The following table has accounted for the refund or return of both the unexpired risk charges and wakalah fees. Yes, the same principle should also apply for wakalah fees covering the unexpired period.

The average amount withheld per surrendered policy jumps from RM 4151 to RM 5133 once the unexpired risk charges and wakalah fees are accounted for. And the accumulated withheld amount grows to RM 3.6 billion from RM 2.94 billion.



For anyone who challenges the need to refund the risk charges and wakalah fees for the unexpired period, ask them to play out the various scenarios where policyholders are allowed to pay premiums based on various payment modes (monthly, quarterly, annually). Compare the financial outcomes under various decrement events (death, surrender etc.) happening on a specific date for the various payment modes, and then compare those financial outcomes with the financial outcomes under various decrement events of a theoretical policy having a daily premium payment mode and daily deductions for wakalah fees and other charges (incl. risk charges).

This post has been edited by hafizmamak85: May 3 2025, 03:49 PM

Generali standalone medical insurance doesn't cover outpatient dialysis

Check again. AIA and GE does cover. Even though GE is a bad company they do cover outpatient dialysis.

I've heard a lot of unsatisfactory reviews about GE as well. I wonder what's up with them.

Chinaman company.

I think investors need to short STMB stock. STMB's management and board of directors need to be taught a lesson.

Not only should investors short the stock, they and affected certificate holders should also demand a response from both STMB and BNM's Shariah Advisory Panels. The panels should clarify their stance on the shariah permissibility of lapse supported takaful products or tabarru contracts with either low or no surrender values.

Kaotim Legasi products are clearly shariah non-compliant as they are lapse supported with no surrender values.

Even an 8% per annum investment return still results in a deficit in the final year of a 30 year, RM 1 million sum covered, Kaotim Legasi plan for a 30 year old male.

So, Kaotim Legasi has to assume a surrender rate of around or at least 5% per annum, coupled with an investment return on traditional investment assets of around or at least 3% per annum, to obtain the required above 8% per annum return rate.

Two key non-shariah compliant elements in the Kaotim Legasi product design need to be emphasized and brought to attention:

- The predatory and unfair nature of requiring or expecting a portion of certificate holders within the tabarru pool to surrender their certificates on a regular basis (yearly), and requiring the Asset Shares of surrendered certificates (pre-funding element) to ensure the sustainability and viability of the tabarru fund (without which the fund would be in deficit).

- The maysir (gambling) and perverse incentive structure elements present in the management or performance of the tabarru fund, where the tabarru fund benefits financially as surpluses arise when the number of surrendering certificates exceed expectation.

Certificate surrenders are not takaful events for which the tabarru fund provides cover. The tabarru fund owners (the current and future group of certificate holders) and takaful operator managing the tabarru fund are incentivised to target vulnerable consumers as that would yield a more preferable financial outcome (surplus position within the tabarru fund).

Even Ustaz/Actuary/Shariah Scholar/Insurance Expert Dr Chatgpt understands that lapse supported takaful products are shariah non-compliant.

Chatgpt Insurance Expert (Takaful) Opinion



It's also really puzzling that Kaotim Legasi, while being long term regular level contribution plans, require their certificate holders to notify of material changes in risk of the person covered arising from changes to their occupation, business, duties or pursuits, and pay any additional contribution the takaful operator may require, during the ongoing term of the certificate.







This is not lawful as the certificate holder's duty of disclosure is only limited to pre-contractual stage (prior to entering into the takaful contract), as per paragraph 5, Schedule 9 of the Islamic Financial Services Act.



The changes in risk of the person covered, due to changes in occupation, business, duties or pursuits, during the ongoing term of the takaful certificate, are not variations to the takaful contract.

There can be no changes to the regular contribution amount of a long term plan during the middle of the certificate term.

This post has been edited by hafizmamak85: May 7 2025, 03:24 AM

Hafiz I agree that the perverse and aggressive lapse-supportable assumptions may not be in line with Shariah principles, especially since the premiums will eventually have to be revised higher (and they can do it based on the policy contract). However, they are not the only ones to do this - even FWD Takaful's Protect Direct term insurance plan is designed similarly.

There is another privision that drew my attention.

"DISTRIBUTION OF SURPLUS
Any surplus arising from the Takaful Pool will be kept in the Takaful Pool to prepare and provide for any high claims experience."

Can they withhold surplus like that?

Seems like this product is designed pretty much like any basic term life insurance plan and doesn't confirm to Shariah norms for a Takaful contract.

Your lapse assumptions of 5% might be too aggressive. First/second year lapses might even be double digits, but as the term of the plan progresses, lapses are likely to head to zero over time. At the halfway point, it would be foolish to lapse as your cover is going to be a lot cheaper than what you should be paying, given the front-loaded nature of level term products.

This post has been edited by contestchris: May 7 2025, 09:03 AM

It doesn't matter who does it. Lapse supported product designs are just wrong. Whether it's another family takaful player (FWD, Great Eastern Takaful, PruBSN Takaful etc.) or another conventional player (Prudential etc.), it's not a fair product design or contract term to not have a fair surrender value or to indiscriminately use the Asset Shares of surrendering policies to sustain future benefit payouts of the other remaining policies. They all need to be called out. That is the point.

Just because a contract term says premium or contribution amounts can be revised does not mean that it is a fair contract term or one that is lawful or legal.

These are all level premium / contribution long term plans. The premium or contribution amounts are set at the policy's inception and cannot be revised later. That is the policyholder's understanding and expectation.

If the ITO wished to review contribution amounts on a regular basis, they should sell yearly renewable products instead of long term ones.

The duty of the insurer or takaful operator is to price the policy appropriately at the policy's inception. If a pricing error occurs, the ITO would have to foot the bill, not the consumer.

But even with the unlawful / illegal right to review premium / contribution amounts during the ongoing term of the policy, why would an ITO selling lapse supported products be incentivised to exercise it???

The ITO would find it easier to just keep targeting / onboarding vulnerable consumers who are bound to surrender their policies and use their Asset Shares to make up for any deficit rather than risk the wrath of the remaining policyholders.

I'm just stunned that this is happening. I guess I haven't been paying attention. Never thought I would see takaful operators doing this.

Takaful operations by local outfits may have more operational issues compared to their foreign owned or conventional counterparts, but not when it comes to substantive matters like the adopted operational model itself.

Takaful models are supposed to be better as they usually have a clear separation between the savings or pre funding component and the insurance pooling component (tabarru or risk fund).

FWD is a very aggressive HK outfit - HK outfits are desperate for yield, and money is cheap. Just look at how much they spend on marketing.

It must be emphasized that a lapse supported product design does not automatically result in a surplus position within the risk or non-participating funds.

It would only result in a surplus position if the number of surrendering policies exceed expectation. So, if a lapse supported product assumes a 5% surrender rate, a surplus would only arise when the surrender rate exceeds 5%.

The Asset Shares of the expected 5% surrendering policies are required to meet the expected future benefit payouts of the remaining policies - these amounts will have to be reserved for. Anything below the 5% surrender rate will result in the fund being in a deficit position.

No takaful operator can withhold any surplus amount within the fund that is more than necessary for the ongoing operations of the fund. Surpluses within takaful funds belong to policyholders and have to be eventually returned to them.

Having said that, there are other ways of distributing the surplus without "distributing" it. The ITO may sell underpriced or loss making products to underserved segments, with the surplus amounts being earmarked to make up for the difference. Noble though this may be, it is not shariah compliant or lawful or legal as the equity principle is not being respected.

You have to also make the argument that my projections are wrong or faulty in some areas if you would like to make the argument that my 5% lapse assumption might be too aggressive.

My projection shows that even an 8% investment return still yields a deficit during the last year of a RM 2040 annual contribution 30 year Kaotim Legasi plan for a 30 year old male with RM 1 million sum covered.

Even if the investment assets of the fund yield a steady 3% per annum, the policy would still need an extra +5% per annum to make up for the difference. This can only happen if 5% of policies within the pool surrender every year for 30 years. This would release 5% of the total Asset Shares or pre funded amounts within the fund to the remaining policyholders every year.

Surrendering a policy during the middle of a policy term being a foolish decision or otherwise is personal matter that is only of concern to the surrendering policyholder. Not for us to question their conduct.

Foolishness or being foolish is not a license to rob from surrendering policyholders. Their equity is still their equity.

This post has been edited by hafizmamak85: May 7 2025, 11:44 AM

very good explanation. thank you hafiz. have you thought of writing a piece of your mind to news portal like malaysiakini, so general people like us can share to others to create awareness?

This post has been edited by togekiss: May 7 2025, 12:21 PM

I don't think they would be interested - either the issues are too complex or sensitive.

I tried reaching out to them and having them put out a piece about Great Eastern misappropriating RM 2.37 billion from their participating policyholders to fund the mySalam scheme, but that went nowhere.

I can't imagine them taking on the issues being discussed here.

Are the details that you put up to them substantiated with any "real" proof and did you provides them with your real personal details and contact details, else they may not entertain.

Posting here are anonymous and are just sort of Kopitiam talks....Posting in MK are not, for the editors and publishers will be subjected to strict guidelines

This post has been edited by MUM: May 7 2025, 12:54 PM

What "real" proof are you talking about???? If you're talking about my personal and professional details, yes the Mkini writer has it. The Mkini writer didn't question whether I was real or not. That wasn't the issue.

The issue was the matter was too complex and sensitive.

Anyone can go online and see Great Eastern's financial statements and annual reports. It's clear to everyone that they took out RM 2.37 billion from their participating funds to fund mySalam. The withdrawal of RM 2.37 billion from the participating funds is clearly disclosed.

Up to you whether you want to believe it or not.

I'm also pretty confident that BNM staff also know who I am and my previous bosses there can easily know that it's me, Hafiz Ipaldin, doing the writing and not someone else.



This post has been edited by hafizmamak85: May 7 2025, 01:16 PM

If the details or the case you wanted to project are really of interest to the nation and if those details and the case that you presented are really as what you speculated it to be,
.....what has BNM made of it?

You go ask n hentam BNM, ask me for what?

Go la ask the crook, BNM, what they have made of everything I've said. Ask them urself. See if the crook wants to layan u or not

This post has been edited by hafizmamak85: May 7 2025, 01:30 PM

If BNM does not view it as what you had said it to be,
....then that clearly makes sense .....
So perhaps MK has the same view with BNM too about what you had make of it.

This post has been edited by MUM: May 7 2025, 01:33 PM

This is really tragic and comical at the same time.

KJ, Kian Ming & Tony Pua Are Your New Lecturers (Sort Of) At Taylor’s PPE Bachelor’s Programme

Ong Kian Ming and Tony Pua are now lecturing for Taylor's Philosophy, Politics and Economics (PPE) Program.

TP (Part 3: Tony Pua responds to Tun M): I would listen and bring the proposals back to the minister for consideration. Many excellent proposals were sourced via these meetings. These would include the setting up of a RM2 billion MySalam critical illness and hospitalisation fund for the B40, contributed by the insurance industry. This fund has benefited more than 120,000 Malaysians to date…..I would however avoid parties who are only interested in securing contracts via direct negotiation with the government. The minister would always tell me to inform them that in the event the government is interested in the project, an open tender would be called, and they would be invited to participate.

There was no open tender for the mySalam scheme, even after two years of being in operation. This was the finding and opinion of the Auditor General in the LAPORAN KETUA AUDIT NEGARA 2019 SIRI 2.

Tony Pua And Dr Ong Kian Ming Are Helping Out The Finance Ministry For Free

Maybe these two champions can provide their PPE students a detailed international relations, geo-economic/strategic/political and local political/strategic analysis of allowing Great Eastern Malaysia to:

- Swindle RM 2.37 billion from their participating policyholders to fund the mySalam scheme;

- Providing Great Eastern Malaysia RM 569 million in income tax exemption for the amount transferred from the participating fund to fund mySalam; and

- Awarding Great Eastern Takaful the contract to run mySalam without going through an open tender (direct negotiation) and which benefited Great Eastern Takaful through probably over RM 150 million in wakalah (management) fees.

Perhaps also delve into whether mySalam helped PH gain Malay heartland support.

Also, they should do an analysis on why BNM has failed in getting the other foreign insurers to either divest or contribute to the mySalam trust fund.

Our national brain trust. Best believe them.

All jokes aside, this is a very serious matter.

Our Central Bank (BNM) truly did conspire with MOF, Great Eastern Malaysia and Great Eastern Singapore to misappropriate RM 2.37 billion @3 March 2020 from participating policyholders within Great Eastern Malaysia's closed participating funds.

I hope anyone coming to this forum and chancing on this post takes the time to truly understand what happened.

It's not something to be scoffed at or ridiculed.

By all means, please be sceptical of all claims, including mine.

Question everything, but please keep an open mind to what is being presented.

Follow the evidence.

There are plenty of official accounts, including disclosures within Great Eastern Malaysia's financial statements and annual reports that would corroborate, at the very least, the transfer of RM 2.37 billion from their participating funds on 3 March 2020 and subsequent payment of the same amount by Great Eastern Singapore to the mySalam Trust Fund on 5 March 2020.

Please read the following articles within Murray Hunter's Substack to understand what happened.

Billions up in the air? Why haven't other foreign insurers operating in Malaysia complied with the divestment condition?

Guest Editorial: Will Bank Negara Malaysia (BNM) be putting pressure on AIA, Prudential, Tokio Marine, Zurich, Chubb and AIG to contribute to the mySalam Trust Fund?


This post has been edited by hafizmamak85: May 7 2025, 05:23 PM

anyway, thanks for sharing with us here.

by the way hafiz, have you created a website/blog to detail your explanation. coz it's easier to spread awareness that way when the information is all in one play. whereas in the forums, the info is in a few pages. normal people wouldn't scroll through various pages to find your points to read them.

common guidance for critical illness (CI) coverage is 3-5x of your annual income.

If you have annual income of 100k, that's 300k of CI coverage which is probably not cheap for most folks.

What's your CI coverage currently? is it following this common guidance/guideline of 3-5x of your annual income?

I am wondering why cant we roll back the initial agreement, let them sell the 25% of the shares, let EPF take those portion,

also i am sure this MySalam insurance hardly anyone know how to use or claim it like what they always claim it is to benefit the B40. I rather they pay the tax and use it to upgrade/build new/purchase new infra/hospital.