1. What do you do while buying an insurance policy?
When it comes to buying a policy, always:
☛ Check the market value price of your vehicle. If it is a new vehicle, the insured value will be the purchase price.
☛ Ensure that your vehicle is adequately insured as it will affect the amount you can claim.
☛ Give all material facts about your vehicle, including previous accidents (if any), modification to engines, etc. When in doubt, it is best to ask your insurance company.
2. What are the benefits which are included in Personal accident policy?
The types of coverage normally provided under a PA policy include:
☛ Accidental death
☛ Permanent disablement
☛ Temporary total or partial disablement
☛ Medical expenses
☛ Corrective surgery
☛ Hospitalisation benefits
☛ Funeral expenses
3. What are the circumstances in which you can buy a travel insurance?
A travel insurance can be purchased for you or your family to insure against travel-related accidents, losses or interruptions, such as:
☛ Personal accident
☛ medical-related expenses
☛ loss of travel or accommodation expenses due to cancellation or curtailment of the journey
☛ losing your baggage, belongings and money
☛ losing your passport
☛ personal liability
☛ delayed baggage
☛ travel delays
☛ hijacking
☛ repatriation
4. Give examples of insurance?
☛ Medical and health insurance
☛ Retirement annuity
☛ Travel insurance
☛ House owner insurance
☛ Investment linked insurance
☛ Life insurance
☛ personal accident insurance
5. What are the basic principals of takaful?
Basic principals of takaful are as follows:
☛ You must have a legitimate financial interest in the subject matter to participate in a takaful plan.
☛ A takaful contract is based on the principle of utmost good faith (trust), whereby you need to disclose all material information required.
☛ You can only recover your financial loss and not gain any profit as a result of a quantifiable loss.
☛ In determining the compensation, the takaful operator will identify the actual most important cause that brought about the loss.
☛ After you have been compensated for your loss, the takaful operator has the right to claim from any third party responsible for your loss.
☛ If a loss is covered by more than one takaful plans or insurance policies, the takaful operator that has made payment to you may call upon other takaful operators or insurance companies to contribute proportionately to the payment.
6. What are the products under general takaful?
The products under general takaful are:
☛ Home takaful
☛ Motor takaful
☛ Personal accident takaful
7. What are the products under family takaful?
☛ The products under family takaful are:
☛ Family takaful
☛ Investment linked takaful
☛ Child education takaful
☛ Medical & health takaful
8. What are the 2 types of takaful?
There are 2 types of takaful:
☛ Family takaful
☛ General takaful
☛ Investment linked takaful
☛ Motor takaful
☛ Medical and health takaful
☛ Personal accident takaful
☛ Family takaful
☛ House owner takaful
☛ Marine takaful
☛ Fire takaful
☛ Travel takaful
10. List some useful pointers when buying an insurance policy or takaful plan?
Useful pointers when buying an insurance policy or participating in a takaful plan:
☛ Understand the policy or plan including the product features, conditions, benefits limitations and exclusions
☛ Ensure that the premium or contribution payable is affordable
☛ Ensure that the amount of coverage taken is adequate and suits your needs
☛ Ensure that all material facts are fully disclosed
☛ Deal only with registered agents/licensed brokers or directly with an insurance company or takaful operators
☛ Monitor the period of coverage and time for payment of premium or contribution
11. Where you can get insurance or takaful product from?
You can buy an insurance policy or participate in a takaful plan:
☛ Directly from insurance companies or takaful operators
☛ Through registered agents or licensed brokers
☛ From banking institutions that have bancassurance arrangements with insurance companies or takaful operators
☛ Via the internet
Banca means bank and assurance is for insurance. The selling of life assurance and other insurance products and services by banking institutions is called bancassurance.
13. What is insurance or takaful contract?
Your insurance or takaful contract is a contract of utmost good faith (trust). Thus, you as the policy owner need to disclose all material information required. If any of the relevant material facts are not disclosed, the policy may be invalid and you will not be protected against any loss or damage.
14. What is the difference between insurance and takaful?
Both insurance and takaful have similar basic principles. For instance, the insured, such as yourself, must have a legitimate financial interest in the risk you are insuring, meaning you must suffer a financial loss when the insured event occurs.
You can also buy more than one policy or plan to protect a particular risk but in the event of loss or damage, you can only make one claim. The amount payable will then be contributed by the insurance companies involved. As such, you cannot profit from your general insurance policy or takaful plan. If you suffer a loss, you will be compensated accordingly and no more than that. You will be paid or indemnified to the position you were in before the loss. However, if you wish to cover your life, you can buy more than one policy.
Takaful is a protection plan based on Shariah principles. By contributing a sum of money to a common takaful fund in the form of participative contribution (tabarru), you undertake a contract (aqad) to become one of the participants by agreeing to mutually help each other, should any of the participants suffer a defined loss.
16. What exactly is insurance?
Insurance is the transfer of risk by an individual, such as yourself, or an organisation, such as your business, to the insurance company. You or your organisation will thus be known as the policy owner. The insurance company receives payment in the form of premium and will compensate you in the event of losses or damages sustained by you.
17. Tell me what is a travel insurance?
Travel insurance coverage is usually limited to the period of your travel. However, some insurance companies may offer various combinations of protection to cater to the specific needs of customers, including long-term annual policies for a frequent traveller.
18. Tell me what is medical and health insurance?
Medical and health insurance, is an insurance policy which is designed to cover the cost of private medical treatment, which can be very expensive, especially with hospitalisation and surgery. Medical and health insurance also ensures that you will not have to worry about the cost of seeking treatment during emergencies. In addition, medical and health insurance also provides you with an income stream while you undergo treatment.
19. Tell me what is personal accident insurance in general insurance?
Personal Accident insurance or PA insurance is an annual policy which provides compensation in the event of injuries, disability or death caused solely by violent, accidental, external and visible events. It is different from life insurance and medical & health insurance.
20. What is a house holder's insurance policy?
This is a policy which covers your household contents and includes coverage for fatal injury to you as the insured. This policy does not cover damage to the house itself.
21. What is a house owner's insurance policy?
This policy provides additional coverage compared to the basic fire policy. It may include loss or damage due to flood, burst pipes, etc.
22. What is a basic fire insurance policy?
This policy provides you with coverage against loss or damage to insured property (i.e. house, shop and factory) caused by fire, lightning or explosion.
23. What are the types of insurance policies which you can buy to protect your home?
There are three main types of policies which you can buy to protect your home:
☛ Basic fire policy
☛ House owner policy
☛ House holder policy
24. Tell me if you know what is home insurance?
Home insurance, or house owner/householder insurance as it is also known, is one of the most important insurance policies you can buy in your adult life. Your home is one of the largest financial investment you have made, and that is why it is so important to protect it.
25. What is a whole life plan in life insurance?
Life-long protection and premiums are paid throughout your life and the money including any bonuses will be paid when you pass away or suffer total and permanent disability.
26. When do you need motor insurance?
You need motor insurance when you buy a motor vehicle. Motor insurance covers your vehicle, be it a motorcycle, a car or a lorry, in case of accidents or theft.
27. What is the payment mode in general insurance?
The coverage period for most general insurance policies and plans is usually one year, whereby premiums are normally paid on a one-time basis.
28. What are the main products which are included in general insurance?
The main products of general insurance includes:
☛ Motor insurance
☛ Fire/ House owners/ Householders insurance
☛ Personal accident insurance
☛ Medical and health insurance
☛ Travel insurance
29. What are the risks which are covered in general insurance?
The risks that are covered by general insurance are:
☛ Property loss, for example, stolen car or burnt house
☛ Liability arising from damage caused by yourself to a third party
☛ Accidental death or injury
30. Please tell me what is a general insurance?
General insurance is basically an insurance policy that protects you against losses and damages other than those covered by life insurance. For more comprehensive coverage, it is vital for you to know about the risks covered to ensure that you and your family are protected from unforeseen losses.
31. What is a mortgage reducing term assurance in life insurance?
An insurance protection plan that covers the repayment of an outstanding property loan to the financial institution in the event of untimely death, disability or critical illness of the borrower.
32. What is supplementary/rider cover in life insurance?
A rider is a supplement attached to the basic insurance plan such as endowment or whole life.
33. Do you know what is life annuity plan in life insurance?
Series of payments paid to you until you pass away. Types of annuity include immediate annuity or deferred annuity.
34. Tell me what is an investment linked plan in life insurance?
For investment-linked insurance, your premium is used to buy life insurance protection and units in a fund managed by the life insurance company. The benefits paid to you or your nominee will depend on the price of the units at the time you surrender your policy or when you pass away.
35. What is an endowment plan in life insurance?
A combination of protection and savings whereby the money will be paid at the end of a specific period upon your demise or if you suffer total and permanent disability.
