OTHER POINTERS FOR POLICYHOLDERS ?
- Replacement can be expensive. Canceling
a life policy you already have and purchasing a new one is called "replacement"
or sometimes "twisting". This action is not advisable. Sometimes
you may be advised by an agent to surrender your policy with a company and
take up a new one with another company and the agent induces you to take such
an action by making incomplete and biased comparison between companies or
policies issued by companies.
If you are urged to cancel a policy, or advised to borrow on any existing
policy and to buy a new one, DO NOT REPLACE a policy without fully discussing
the proposed change with your company. Provide the necessary details to the
representative of your company for e.g.:
- the description of the new policy
and any other cover proposed to be purchased.
- details of any financing involved
and the interest rates quoted.
- provide copies of the proposal
made to you with the supporting forms.
- Provide the name of the agent making the proposal.
Replacement of a policy is usually not in your best interest for the following
- The new policy is likely to be at a higher premium because you are older
- Your new premium must provide for the initial cost of writing the insurance
policy a second time and this will be reflected in the slow build-up of
- The two year period of contestibility will begin again.
- Existing policies may have more favorable provisions than new policies
in such areas as settlement options and disability benefits.
- Your present life insurance company can often make the change you want
at a lower cost to you.
BEWARE OF AGENTS who try to convince you to replace your policy by unfairly
criticizing your present company or agent.
- Make sure your family or dependants
are aware of the existence of your policy. Here is some advise about beneficiaries
and for beneficiaries:
- Let the beneficiary know the kind
of insurance policy you have, any change you make, and where you keep the
- Keep your policy in a safe place, and have the basic information - company,
policy type, policy number, insuredís and beneficiarieís or beneficiariesí
names - in a separate place. However, do not use a safe deposit box or any
place where the policy might not be readily available.
- Have a contingent (secondary) beneficiary
in case the primary beneficiary dies before you.
- Ensure the company has the beneficiaryís
address and it must be informed of any change in that address.
- Keep note of the premium due dates.
- Have your age admitted by the insurance company at the soonest possible.
In the case of death and if there is a mis-statement in the age, the company
would pay an amount equal to the amount of insurance which the premium would
have been purchased at the correct age. The amount paid could be more or less
than the face amount, depending on whether the insuredís age was overstated
- Review your insurance needs regularly
to ensure they are adequately covered by the existing policy or policies.
- WHEN IN DOUBT of anything relating
to your policy, SEEK CLARIFICATION from the insurance company.
WHAT HAPPENS IF THERE IS A DISPUTE BETWEEN INSURANCE COMPANIES AND THE CONSUMER
OR POLICYHOLDERS ?
Insurance Mediation Bureau (IMB) has been established to offer high standards
of consumer protection for fair dealing with policyholders. Under this self-regulatory
scheme IMB is required to resolve disputes between Insurance companies and the
consumer or policyholders in an independent, cost-effective, efficient, informal
and fair way. There is no charge for the Mediator's services.
However, you must make sure that your complaint must :
be referred to the Senior Management of the Insurance Company to give them
the opportunity to resolve it;
referred to the Mediator within 6 months of your receiving the final decision
of the Senior Management;
you personally (for example, your motor insurance or household contents);
to a policy issued in Malaysia.
If your complaint is not one which the Mediator can investigate you will be advised
of what other steps are open to you.
cannot investigate your complaint if :
matter is the subject of legal proceedings or arbitration;
ii) the dispute is between you and someone elseís insurer, i.e. third party
matter concerns a policy which relates to a commercial risk.
Any policyholder who is not satisfied with the decision of the Senior Management
of an insurance company may write to the Mediator at :
Insurance Mediation Bureau
4th Floor, Wisma Harwant
106 Jalan Tuanku Abdul Rahman
50100 Kuala Lumpur
Tel. (6) 03 293 9419 or 293 9623
Fax. (6) 03 293 6816
giving details of the dispute, the name of the insurance company, policy
number and copies of correspondence between the policyholder and the company.
Mediator makes a decision he will send it to you and to your insurer. You may
accept or reject the decision. If you accept the decision, your insurer must
pay you any award up to RM100,000.00.
If you reject it, the decision is canceled and you are at liberty to proceed to
Arbitration if so provided by the policy or to initiate proceedings in Court.
A rejected decision does not affect your right to take subsequent legal action.