Preview

The Importance of Life Insurance and the Various Types of Life Insurance Available in Malaysia

Powerful Essays
Open Document
Open Document
5923 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
The Importance of Life Insurance and the Various Types of Life Insurance Available in Malaysia
1. Introduction
Today, life insurance actually the one of everybody needs. As we know, it is a type of financial protection to anyone who bought it. Basically, life insurance is an agreement between insurance policy holder and insurer, where the insurer promises to pay an amount of sum assured to beneficiary upon the death of the life insured. In other words, an individual’s pure risk is shifted to insurer in the consideration of premium paid by the policyholders. The premium is either paid regularly or in a lump sum.
The concept behind the life insurance is “repair the house before it rains”. It is common that we prepare an umbrella even it is a sunny day. By the same token, an individual will plan how to meet their financial obligation to their family in the case of premature death. Therefore, it comes out with life insurance which would provide financial security to the loved ones instead of letting them undergo into a financial hardship upon the death of that person.
In Malaysia, life insurance businesses come under the jurisdiction and regulations of the Bank Negara Malaysia (BNM). All matters regarding insurance in Malaysia is governed under Insurance Act 1996 and Insurance (Amendment) Act 2005. While the life insurance agents are not directly supervised by BNM, but registered under the Life Insurance Association of Malaysia (LIAM) which is the national association representing life insurance and reinsurance carriers. It requires the agents to fulfill and follow certain requirements and regulations.
Besides, in regard of tax treatment to life insurance, there are tax advantages given to life insurance policyholders by the virtue of Section 49, Income Tax Act 1967. Under this section, life insurance plus contribution to approved funds (e.g. EPF) is tax deductible up to RM6000 in a basis year for an individual; same up to RM5000 for married couples if the wife opts for separate assessment.
Other than rules and regulations, the life insurance industry is



References: 7. http://www.greateasternlife.com/my/en/insurance/products/products_protection.htm (accessed on 31st may 2012) 8 9. http://www.liam.org.my/index.php?option=com_content&view=article&id=723&Itemid=97 (accessed on 31st may 2012) 10 [ 4 ]. http://www.liam.org.my/index.php?option=com_content&view=article&id=54&Itemid=59 (accessed on 31st may 2012) [ 5 ] [ 6 ]. http://biz.thestar.com.my/news/story.asp?file=/2012/3/19/business/10932958&sec=business (accessed on 31st 2012)

You May Also Find These Documents Helpful

  • Good Essays

    Established in 1845 and located in New York, New York Life Insurance Company is a Fortune 100 company and is the oldest and one of the largest mutual life insurance companies in America. The New York Life maintains operations in all 50 states and many markets in Asia and Latin America. The Company holds the highest rating for financial strength from four major players in the industry life insurance rating. In 2010, New York Life Insurance Company posted record sales in the U.S. individual life insurance, an increase of 39% 1 in 2009 and far above the industry growth of 12% in 2010.2. The New York Life offers a large staff of experts to support all products and give them to personnel training for their first 36 months to guarantee they are fully informed of any decision. by ( https://www.facebook.com/WhitneyHendersonAgent/page_map)…

    • 650 Words
    • 3 Pages
    Good Essays
  • Good Essays

    State Intestacy Case Study

    • 3050 Words
    • 13 Pages

    the life insurance policy by state contract law. The designated beneficiary of a qualified pension plan will also…

    • 3050 Words
    • 13 Pages
    Good Essays
  • Satisfactory Essays

    Death Benefit: In the event of the passing away of the life insured during the term of the policy, the beneficiary/nominee receives the following Death Benefit:…

    • 562 Words
    • 3 Pages
    Satisfactory Essays
  • Powerful Essays

    You have a great universal life insurance policy. It was great decision to get a universal life insurance policy which a term insurance policy with a cash accumulation account attached to it. What I consider beneficial and useful thing is that the premium is flexible. This allows you to make additional contribution to the policy in case you have extra cash or…

    • 1435 Words
    • 6 Pages
    Powerful Essays
  • Good Essays

    Most people don’t have an answer to the question of what they are to do if their main source of income were to suddenly die, or suffer from a traumatic, sudden physical ailment. Most people wouldn’t be able to sustain their current lifestyle, keep the lights on in their home or even keep it, let alone afford a college education for their children. Life insurance provides a failsafe for dependents by giving them a set amount of money upon the dependent’s death or sudden physical ailment for a number of things. For example, the money can be used to keep the dependent’s…

    • 644 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    The concept of insurance is based on spreading the risks; it does not necessarily mean the risk will happen but chances are that it might happen. The concept is on taking…

    • 316 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Life insurances are roughly broken up into two types - permanent and term life insurances. Both have guaranteed death benefits, but there is more to life insurance than just death benefits. The two main features you should look out for when you buy life insurance direct are TPD or Total and Permanent Disability and trauma insurance. Of course these can also be taken as individual policies but having them included in your life insurance policy can be more beneficial.…

    • 424 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    Interview

    • 3055 Words
    • 13 Pages

    (A) Life insurance is a contract that pledges payment of an amount to the person assured (or his nominee) on the happening of the event insured against.…

    • 3055 Words
    • 13 Pages
    Powerful Essays
  • Good Essays

    One of the best ways to ensure that your family isn’t stuck under a mountain of debt is by having some form of life insurance. It isn’t the norm, but being average can leave your family with thousands and thousands of dollars of debt.…

    • 805 Words
    • 4 Pages
    Good Essays
  • Satisfactory Essays

    personal finance

    • 404 Words
    • 2 Pages

    Life insurance protects your family against the negative financial impact that would be caused by your death.…

    • 404 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Cash Value

    • 1076 Words
    • 5 Pages

    Although there are different kinds of whole life, they all accrue a cash value. This makes them different from term insurance.…

    • 1076 Words
    • 5 Pages
    Good Essays
  • Good Essays

    Funeral Insurance Essay

    • 499 Words
    • 2 Pages

    Funeral insurance cover is a type of life insurance policy that involves a minimum "face amount" to be used on memorial services and…

    • 499 Words
    • 2 Pages
    Good Essays
  • Good Essays

    The value of life. What is it exactly? We will never know the true definition of the value of life because there are so many different perspectives in this world and everyone considers their perspective is right. The policy holder, the client that own the insurance policy may choose the type of policy that best suit their personal needs and wants, there are a few type of the policies such as the term insurance, whole life insurance, mortgage disability, permanent insurance, final expense, return of premium, and much more.Nowadays, life is full of risks and uncertainties. People might not know when will fall sick or in need of a major surgery where large amount of money is needed. Life insurance is known as 'Life Assurance'. Life insurance provides risk coverage to the life of a person .Insurance provide protection against loss of income and compensate to the policy holder when the person death. What if you died today?…

    • 725 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Bibliography: Anderson, L. (2006) Insurance Regulation in Jamaica: A Case Study of the Jamaican Experience, Caribbean Actuaries Association Conference.…

    • 723 Words
    • 3 Pages
    Good Essays
  • Powerful Essays

    Sbi Life Insurance

    • 11116 Words
    • 45 Pages

    The internship facilitates a student to explore the new horizons of learning. Therefore, it may also require data generation, analysis of data, understanding it in the company’s context and to help in the value addition in the services of organization and thus it also helps student in understanding the procedure to be followed by the organization This is my report on the work done at SBI Life Insurance Company Limited during summer internship. This report focuses on the Underwriting, Claims and Risk Management Department.…

    • 11116 Words
    • 45 Pages
    Powerful Essays