Can I claim from more than 1 medical insurance plan at the same time?
Yes. You may make a claim from more than 1 medical insurance plan up to the amount of the total medical expenses incurred. You may claim the total expenses from a single plan or proportionately from all the plans. You will need original receipts for the claims.
How do I determine the sum insured for my building(s)?

The sum insured is to be determined based on market or reinstatement value. A professional valuer may be consulted on the value of a house. The value must also include an amount for inflation during the period of insurance since there is always the possibility that the loss may occur on the last day of the insurance cover.

Source: MPIB

What is Excess ?

Excess refers to the amount that you are responsible to pay as per the policy terms & conditions in respect of each and every claim payable (including cost and expenditure incurred by the insurance company to conduct, defence and settlement of any claim for the loss or damage to your vehicle, and damage to third party property resulted from the accident arising out of the use of your vehicle for liability to third parties), in addition to any other excess that may be applicable. For example, the excess of your policy is RM300 and the total claim amount is RM1,800. Your insurer will only pay out RM1,500 for the claim while you have to pay the remaining RM300.

Source: MPIB

Related links : Motor Insurance

If I find my new policy not agreeable, can I return the policy?
The Insurance Act 1996 has been repealed and replaced by The Financial Services Act 2013. Under the FSA 2013, Schedule 8 Sec 128 para 2 (1), you may object to the policy and return the policy with your written objection to the Company within 15 days from the date of its delivery to you or to a person at your residence. This is known as the ’15 days “free look” period’ which commences on sighting of the policy and signing the policy acknowledgement slip.
The Company will cancel the policy and refund the premiums that have been paid less the deduction of medical and other expenses incurred. The new Act also provides for refund of premium of Investment-linked policies.
My agent wants me to buy a policy from him to maintain his quota. What should I do?

All agents have annual production quotas. You should purchase a policy based on your needs and affordability. Plan your needs in totality rather than piecemeal.

Related links : When You Are Considering A Life Policy

What is the difference between a houseowner and a householder insurance?

Houseowner Insurance covers loss or damage to the buildings of the private dwelling house including fixtures and fittings, interior decorations, walls, gates and fences.

Householder Insurance covers loss or damage to the household contents such as electrical appliances, furniture sets & the like and personal effects.

Source: MPIB

Related links : Houseowner Insurance

I am newly married. Should I review my nominees in my insurance policies?

That depends! If the intention is to provide a survival fund for your aged parents, you would not need to as this would be a Trust Policy created under Schedule 10 para 5a of the FSA 2013. You could purchase new policies to provide for your new family instead.

Conversely, you can appoint your spouse as the new nominee. This would then revert it to a Trust Policy for your new family. This only applies to your life and personal accident (PA) policies under the Financial Services Act 2013.

Are sales illustrations guaranteed in proposals by insurance companies?
No. The sales illustrations are for projection purposes only. Normally, these illustrations are based on the insurance company’s prevailing bonus/dividends experience. Once the bonuses are declared, these are guaranteed by the insurance company.
Should I refinance my property?

The purpose of refinancing is to

i) reduce the mortgage interest, thus savings, and

ii) to create additional funds from latent value of the property.

Refinancing to invest in high risk or uncertain ventures should be done with utmost prudence. Consult an adviser to ensure it meets your financial objectives.

What is NCD?

NCD is the abbreviation for No Claim Discount. This is a discount given to the policyholders upon renewal of their motor insurance if no claim is made from the policy during a continuous coverage period of 12 months. Persatuan Insurans Am Malaysia (PIAM) Motor Tariff sets out a fixed rate for this discounts. These are as follows :

NCD For Private Car / Commercial Vehicles


Private Car


Commercial Vehicles

Period of Insurance


After 1st year




After 2nd year




After 3rd year




After 4th year


25% (Max)

25% (Max)

After 5th year




5th year onwards




Source: MPIB

If I am covered under my company's group medical scheme, do I still need a personal medical policy?

You probably would not need to if you intend to work for the same company for the rest of your life. On the other hand, you may not want to be caught without a medical policy should you decide to leave the company for greener pastures or when you retire.

Of course you may  want to top-up your personal medical programme in addition to the company’s benefits to ensure you have a comprehensive cover.

Is a WILL important?
Yes. It can ensure that your assets are settled and distributed according to your wishes.  A WILL expedites the distribution process in a hassle-free manner.  A properly executed WILL reduces the possibility of “outsiders” challenging the validity of the WILL.

Read more articles at "To Will or Not To Will" , "Feng Shui Master Loses Battle of Wills"

If I purchase 2 different personal accident policies, can I claim from both policies in the event of an accident?

Yes in the event of an injury, you can claim from both policies, subject to the benefits in each policy.  Claims for medical expenses require original medical receipts. In the event of death or permanent disablement, the total sum insured will be paid from both policies.


Learn more at: "Personal Accident Insurance"

Should I buy a Critical Illness (CI) policy if I already have Hospitalisation & Surgery (H&S) cover?

Many people have wrong perceptions of H&S and CI covers. They are different but work hand in hand to provide a comprehensive cover. While H&S policy indemnifies hospitalisation claims, CI is usually paid in a lump sum in the event of a critical illness. For example, dengue fever will qualify for a H&S cover but not CI, while a stroke will attract CI but not necessarily H&S as the patient may not be hospitalised.

More articles for your reading pleasure: "Can You Afford to Fall Ill?" , "Health is Wealth" , "The Importance of Critical Illness Policies"

A Word of Advice to ....... Advisers and Agents

The greatest satisfaction in the career of financial advisers and agents is to benefit your clients through your advice and services. It is not just about money, awards and trips. A financial adviser or agent should have the passion to assist their clients to achieve their financial objectives; while achieving their own goals.

Throughout my 25 years in the financial services industry, I have achieved various awards and trips including MDRT, have spoken on various platforms locally and abroad, and have attained many degrees and accreditations. Yet, nothing compares to the satisfaction of rendering my services to the clients when they need it most.

For aspiring financial advisers and agents, it would be wise to decide a career path for yourself early in your career. Always put your clients first because they are the reason we are in this business.

Read this: "When You Are Considering A Life Policy" , "Buyer Beware!"

Is medical history necessary for a new policy application?
Yes, as underwriting or selection of risk requires a client’s medical history. From this medical information and including other relevant information, the underwriter will determine whether it, is a standard risk, requires health extras, or, a declined risk. This will also reduce unnecessary queries or render the policy void in the event of claims.
Where the sum assured is small or the applicant is young with a clean bill of health, the medical history is usually not necessary.
In the event of an accident, do I have to repair my car in a workshop approved by the insurance company?

Yes. You will need to refer to the list of PIAM (General Insurance Association of Malaysia) approved panel of workshops given to you along with your motor insurance policy. This list should ideally be kept together with your policy in your car at all times.

Source: MPIB

Related reading: "Motor Insurance"

What is Co-Insurance?

Co-insurance are usually found in H&S policy contracts. This is the co-payment of claims proceeds shared between the Insurer and the Claimant / Insured when the claimed benefits are higher than the benefits indicated in the contract.

Co-insurance is also a form of check and balance to prevent abuse of benefits.

Will the premium for hospitalisation benefits in an Investment-linked Policy (ILP) remain unchanged?

No. The premium for hospitalisation benefits will change over the life of the ILP usually on a 5-yearly band as per standalone hospitalisation policies. In fact, the insurance charge of ILP policies changes yearly. Premiums of traditional life policies will remain unchanged over time.

Please also read: "Investment-linked Policies"

Buy term plans and invest the difference?

This is based on the idea that since whole life plans are more expensive than term, it is better to invest the difference. But often the difference may be too small for any meaningful investments. Investments are not guaranteed and may not fit the individual’s risk tolerance. Furthermore, cash values of whole life plans do help to prevent lapsation especially after retirement due to the guarantee features.

Also read: "The Need For Financial Planning" , "Financial Planning - Establishing Goals and Objectives" , "When You Are Considering A Life Policy"

How do I go about admitting myself into hospital with my medical cashless card?
Upon admission, present your insurance medical card to the hospital for verification with the insurance company. This is to allow the insurer to issue the Letter of Guarantee for cashless admission. As this may take some time, to expedite the admission, you may use your credit card while awaiting clearance for the LG from the Insurer. If the medical expenses are paid via credit cards, they will be reimbursed after the policyholder has been discharged and a claim is subsequently filed.
Should I purchase an insurance product from an Agent or Financial Advisor?

There are various types of insurance products broadly classified into Life, Medical and General Insurance. Within each category there are various products to meet various financial needs. As such the Agent or FA should be sufficiently knowledgeable to dispense advice by discovering needs and selecting or designing products to suit. In addition, the Agent or FA must display genuine care and concern.

While in certain instances, a comprehensive financial plan may be needed, often a knowledgeable insurance advisor may be more appropriate as insurance products tend to be more homogeneous. Follow up advice and services like renewals, claims and updates are important.

What is a Cover Note?

A Cover Note is a document issued by the insurer that serves as a temporary evidence of the policy contract between the Insured and Insurer. It is usually valid only for a certain period. The Cover Note should be replaced by a Policy of Insurance in due course.

Source: MPIB

Do medical insurance premiums remain unchanged after being purchased?

No. The premiums for hospitalisation & surgical schemes increases with age even after inforced. Usually the increase is a 5-year band. This is so even if the benefit is attached to an Investment-linked plan.

How can I assure that the benefits of a life policy will go to my immediate family?

Under Schedule 10 para 5(1) of the Financial Services Act 2013, there is a provision for a trust for both unmarried and married policyowners. For family members outside the relationships specified in para 5(1), the nominees will receive the monies as an executor and not solely as beneficiary under para 6(1). If you are unclear, please refer to your adviser or agent.

How do I determine the sum insured for my car?

The sum to be insured should be based on the market value of your car. Market Value represents the value of the insured vehicle at the time of loss or damage less due allowance for wear and tear and/or depreciation.

Source: MPIB

Which is the best policy in the market?

There is no such thing as the best policy. Agents & advisers often use this sales pitch to ‘con-vince’ prospects (or unsuspecting clients) to purchase their product, or worse, surrender existing ones. Policies should be bought based on your needs and affordability. The best policy in the market is the one you have and is still inforce!

I was told to replace the old policy with a new (improved) one.

There will always be newer policies in the market but the basic concept is still protection. When you replace old policies you lose:

a) accumulated benefits due to compounding effect
b) lower insurance premium rate of the original policy
c) potential terminal bonuses
d) incontestability period

Obtain all the information and consult other parties including Insurance Company before deciding to replace.

What would be an acceptable return for my investment?

That would depend on your expectation, objectives, duration of investment and your risk appetite. Unlike speculation, most investors, from surveys carried out, are happy with 8% returns on their investments. It is important to be disciplined in order to achieve the desired returns.

Is it true that Critical Illness policies are claimable only when the illness is very serious?

The illness need not be terminal before it is claimable. Most illnesses are claimable even at relatively early stages. This is especially so if early stage riders are attached. Many claimants are still alive after the treatment and collecting the claims proceeds. The purpose of critical illness policy is to provide a lump sum for treatment to help the recovery of the policyholder.

Should I invest or buy life insurance first?

The foundation of a sound financial plan is based on the 2 “i”s – investment and insurance. While most people would want to invest for returns first, it is important to have adequate insurance in case of a rainy day. As the proverbial goose that lays the golden eggs, insure the goose first. In addition, because the proceed of a life insurance policy can be arranged as Trust Policy money, it can be treated as almost immediate cash upon the demise of the investor.

What is the difference between houseowner policy and fire policy?

While a fire policy insures against the risk of fire, a houseowner policy provides cover for fire as well as impact damage by vehicles, damage due to burglary, flooding, overflowing of water due to bursting of pipes and water tanks, etc. In short, a houseowner policy is comprehensive!

What happens if the policyowner of a third party policy dies?

Third party policies may include children’s policies as well as husband and wife policies. It is important to provide a residuary clause or a clause to specifically include policies in the Will to ensure the ownership of the policies are passed on to the intended beneficiaries.

How do I cover for injuries and loss during a snatch theft?

Normal PA policies would cover the injuries. A special snatch theft provision will provide cover for loss of jewelleries, as well as personal effects of up to RM2,000. Call us at 03-7729 1322 or email us at for more information.

Is an investment-linked policy better than a traditional whole life policy?

No. Under the Insurance Act 1996, traditional life policies have guaranteed cash values. Premiums are fixed while annual bonuses once declared are guaranteed. The ILP, on the other hand, is subjected to the investment risks thus there is no such guarantee.

Should beneficiaries be designated in my PA policy?

Yes. The Financial Services Act 2013 also applies to PA policies. Thus, parents named before marriage or spouse and/or children named after marriage will fall under Schedule 10 para 5(1) distribution. It important to note that the PA policy is an annual contract thus the beneficiaries should be annually reviewed.

Can I draft my own Will?

Yes, as long as the Will is written according to the legally accepted structure. Make sure the 2 witnesses have no interest in the Will.

How can I ensure the claim benefits will go to a nominee who is not an immediate family member?

Under the Financial Services Act 2013, nominees other than those under Schedule 10 para 5(1), are merely holding the claim monies in trust. Thus, in order to be certain, the policy should be absolutely assigned. An informed or professional agent or adviser would know how to assist you.

Are the features of burglary policies the same between different insurance companies?

Theft or burglary policies may vary between different companies. Some may include armed robberies, full theft (theft without forcible entry), and damage to premise. Before purchasing a burglary policy, it is important to ensure that the scope of cover of the policy meets your needs.

Can I arrange the benefits of a life policy via a Will ?

Yes. While a nomination in a policy will supersede the Will, there are times a policy may be willed away. In this case, leave the nomination to the estate.

Are there any investment products with high returns but low risks?

High return investments often come with high risk and vice versa. This is the basic principle of investment-risk relationship. Certain investments which may have high return with moderate risks are usually accompanied with other conditions. Take note and understand your own risk tolerance and objectives before investing.

What is Betterment?

Betterment is a scale which is imposed to the vehicle aged 5 years and above when new franchise parts are used during an accident repair that was paid for by the insurance company. The insured is to bear the betterment charges because the vehicle's old damaged parts were replaced with new franchise parts since the motor insurance policy only indemnifies the insured's vehicle in the condition just before the accident. The application of betterment is at the discretion of the respective insurance companies based on the Scale of Betterment approved by Bank Negara Malaysia.

Source: MPIB

Should I make a nomination when applying a policy?

Yes. While it is unlikely, but anything can happen while the proposal is being underwritten or before the policy document is out. It will reduce complications of distribution of claim proceeds.

What can we do to mitigate the effects of rising costs of products and services?

It is back to basics! Our forefathers had always depended on good, old financial sense to overcome the impact of rising costs and reducing cashflow. During such trying times, there is no better antidote than a good dose of sacrifice and discipline. All unnecessary expenditures and luxuries should be relegated to a lower priority or done away totally. This well meaning sacrifice calls for lots of discipline.

Expenditures should be pre-planned. Daily expenses should be closely monitored. Bargain hunting should be the norm as "every sen saved is a sen earned". Force yourself to set aside some money regularly for the unexpected. Cut waste! All these measures may not make you rich, but can help alleviate financial stress.

Should I invest in stocks & shares for my retirement fund if I am already past 50?

Normally, as one approaches retirement age, it is best to reduce the risks. A simple rule of thumb formula may be used: (70 – age attained) = percentage of investments in stocks. Thus, if one is age 60, it is better to invest up to 90% in low risk investments.

What is the difference between a comprehensive cover and a third party cover for motor insurance?

Comprehensive Cover refers to insurance coverage of loss or damage to the motor vehicle, accessories etc caused by:
• Accidental collision or overturning. 
• Fire, external explosion, self ignition or lightning. 
• Burglary, housebreaking or theft. 
• Malicious acts. 
• Falling objects

Third Party Cover refers to insurance coverage of legal liability to third parties arising out of the use of a motor vehicle resulting in death, bodily injury or damage to property only.

Source: MPIB

Can I change my existing nominees?

Yes. Nominees may be changed. But nominees named under Schedule 10 para 5(1) of the Financial Services Act 2013, may only be changed with the Trustee’s consent. Get a professional or qualified agent or adviser to assist.

What are the first 4 things I should do in a motor accident?
You must,
1) Call insurer/insurance agent immediately, 
2) Make a police report within 24hrs,  
3) Take photos of the accident to provide as record, and,  
4) Get details of other party/parties involved including names and contact numbers, vehicle type and registration number, and the other party’s insurers.
What type of insurance should I purchase to protect myself against accidents claims in my business premises?

Public liability insurance is the proper policy to have. It covers both third party bodily injuries as well as property damage. Thus, if one’s business signage collapses onto a car or person, the public liability policy will provide cover against claims by the third party.

Should I write a Will or set up a Trust for my estate?

The Will is the simplest way to distribute your estate. Beneficiaries receive the estate upon death of testator. Where there are specific conditions, eg. Young children below 18 years or multiple assets to manage, a Trust may be more appropriate. Consult your advisor.

Can I claim against my fire policy if my household equipment is destroyed by a lightning strike?

Yes. The fire policy also provides cover for damage due to lightning strike. But unlike the householder policy, the fire policy does not cover loss due to burglary.

Should I provide insurance cover for my employees if they are only a few numbers?

It would be advisable to. The common cover will include hospitalisation & surgical insurance and personal accident insurance. Both provide 24 hour worldwide cover. The premiums are deductible expenses against the company’s profits.

What should I do if the police inform me that my stolen vehicle has been recovered?

If the vehicle is recovered before the theft claim is settled, you will have options to either:
a) To withdraw the claim (if the vehicle is recovered in good condition)
b) To withdraw the claim and undertake the repair at your own expense (if the vehicle sustained minor damage and the insured wishes to retain his/her NCD entitlement)
c) To withdraw the Theft Claim but pursue with Own Damage Claim (if vehicle recovered sustained extensive damage or has missing parts).

Source: MPIB

What is an E-Cover Note?

E-Cover Note simply means an electronic cover note issued by an Insurer and submitted to JPJ electronically and to facilitate the Insured to renew his road tax at JPJ office. The Insured will no longer be required to produce the physical cover note to JPJ. They will only need produce their vehicle registration card to JPJ after they have purchased their insurance.

Source: MPIB

Can any accumulated NCD benefit be transferred from one vehicle to another?

Yes. This can happen when one sells an old vehicle and transfers the NCD to the new vehicle being purchased. If no transfer of NCD is made to another vehicle, the NCD entitlement level will drop one level each year. For example, if the NCD entitlement is 55% this year, it will drop to 45% next year, if it is not transferred to another vehicle. This will continue until the NCD level reaches 0%.

Source: MPIB

What happens upon the death of a testator?

The executor should be informed so that the Will may be filed in court for a letter or grant of probate. Normally the services of a lawyer or Trust Corporation are sought. The grant of probate may take more than 3 months. In the interim period, it is important to ensure there are sufficient funds for the dependents to continue with their lives. Mortgages and repayments should also be provided for.

How can I provide an education fund for my child?

Determine how much time you have to set up the fund and how much would be needed, before looking for options. This could include unit trusts, properties, endowment policies (or investment-linked policies), equities, fixed deposits, etc. Obviously there are pros and cons that should be taken into account. A combination of options may also be used, eg. life policies with unit trusts and properties. 

Can I will my life insurance proceeds to specific beneficiaries other than my immediate family ?

Yes. The life insurance proceeds can be paid according to your wishes via a Will, unless it is the Schedule 10 para 5(1) Trust policy, a third party policy or where the policy has been absolutely assigned. The beneficiary named in such policy should be the estate so that it can be distributed via the Will.

Can I claim from my motor insurance policy if a roadside tree falls on my car parked in a municipal carpark?

The standard motor insurance policy does not cover falling trees or branches, as in the case of flooding. These perils may be covered under an extension of cover to include flooding and Acts of God. There is an additional premium charged for the extension. Otherwise, one may have to institute a suit against the local councils concerned or the owners of the trees.

How do I decide which medical insurance policy to buy?

There are many medical (H&S) policies in the market with corresponding varieties of benefits. As such, firstly, one needs to know what benefits is required. Next, consider affordability. The reputation and claim services of the Insurer should also be considered. No less important is the reliability of the Agent or Adviser.

Can I buy a life policy for my niece?

One of the principle elements required to effect a life insurance policy contract is insurable interest. This element is not present in this case, unlike between a parent and child. While the uncle/aunt may purchase the policy for the niece, he/she cannot be the Proposer or Policyowner.

There is an option available through Takaful Insurance which is arranged as a hibah. Check with your financial adviser or agent.

Does Personal Accident (PA) policy cover traditional treatment?

Certain PA policies do cover traditional treatment for sprains, fractures, torn ligaments etc arising from injuries sustained during games or normal activities. Such treatment may include massages, traditional herbs, herbal wraps and the like. Official receipts are required for these treatments in order to effect the claims.

What is the minimum number of participants required in a Group Employee Scheme?

The minimum number of employees required is 5. This applies only to hospitalisation and personal accident benefits. Spouses and dependent children may be included. Premium savings is not significant for such small numbers.

My agent informed me that medical rider premiums attached to investment-linked policies (ILP) remain unchanged. Is this true?


Like standalone hospitalisation policies, the premium does change to reflect the increasing age of the life insured. Because of the Investment Value of ILPs, the increasing premium is not apparent. As such, the medical premium reduces the investable amount over time.

Can I use a Whole Life policy or ILP to cover my mortgage?

An MRTA is usually used to cover mortgages. But a Whole Life or IL policy can also be used. In fact, the Whole Life or IL policy is more flexible, has cash value and provides increasing cover. In addition, a Critical Illness rider may be added.

Can I buy a Takaful insurance policy if I'm a non muslim?

Takaful policies may be purchased by anyone. The policies are Syariah compliant but otherwise provide protection like normal policies.

Can I make a loan from the Cash Values of life insurance policies?

Yes, as long as there is sufficient cash value. Most Insurance Companies will require a minimum retention of the cash value to keep the policy inforce for a period of time. While there is an interest charged on the loan, any bonuses due will continue to be payable based on the original contract. You may repay the loan at anytime subject to a minimum amount determined by the Insurer. It is a relatively simple process to arrange.

What's an APL?

APL stands for ‘Automatic Premium Loan’. When the premium becomes due but not paid after 30 days, an APL will be initiated against the Cash Value to keep the policy inforce. An interest rate will be charged. In the event of a claim, the APL will be deducted from the claims proceed.

Is getting a Travel PA from an insurance company different from one from a credit card company?

Basically, there is no difference. But it is advisable to go through the benefits covered under each plan. Usually, the Travel PA bought individually from insurance companies is more comprehensive. Apart from flight curtailment and medical benefits, policies can also cover liabilities, repatriation as well as kidnapping.

What is the difference between pre-existing illness and specified illness in a medical insurance contract?

Pre-existing illness are illnesses existing prior to taking up a policy. Specified illnesses are chronic illnesses which require in-hospital treatment, eg. cataracts, haemorrhoids, cysts and fibroids, hypertension, hernias, stones, sinuses, etc. While the pre-existing illnesses are totally excluded, the specified illnesses are excluded for a period of time only.

What do I do if my life policy lapses?

Lapsations are often due to non payment of premium and insufficient cash values. Such policies may be revived via a health declaration within 6 months of lapsation. Otherwise, a medical check-up will be necessary. The indisputability and suicide clauses will re-apply for re-instated policies.

What are some of the reasons of claims discrepancies as reported in the STAR on 27 January 2012?

Since the articles appeared in the Star newspaper on 27th January (Painful claim) and 28th January 2012 (The agents of problems), there have been a number of “concerns” expressed by our clients and friends.

Some of these “concerns” are 
1)    They are worried that all medical policies have these claim problems as reported in the paper.
2)    All the Insurers seem to practise the avoidance of claims by resorting to the fine print
3)    Health insurance industry is full of unfair practices
4)    It’s very difficult to claim hospitalisation benefits
5)    You cannot trust the services and advice of agents

Over the next few weeks we will provide some answers to these concerns. 
The figures shown in the articles extracted from FMB annual report 2010 represent policies which have encountered claims discrepancies. In contrast, the insurance statistics of BNM 2010 annual report indicated the total medical expenses and personal accident claims (general insurance) and medical expenses benefits paid (life insurance) are RM667million and RM1,454million respectively for the same period. The BNM report for the same period show that these problem cases only represent a small percentage of the total number of policies which are paid.

Medical policies include hospitalisation and surgical policies, critical illness policies as well as personal accident policies with medical claims. These policies may be from life and general insurance companies.

By and large, these insurance companies pay out claims with little or no hassle. The policy wordings are often drafted in legal terminology to clearly define the conditions that qualify the claim and to prevent fraudulent practices. It is true that some of these legal terminologies are not easy for laymen to understand. Where possible, insurance companies should provide an explanation in writing. In the absence of this, agents and advisors should explain the policies clearly to their clients to ensure they understand what they are buying.

In the next article, we shall visit some of these products and the potential claim discrepancies that may arise.

What are the types of medical claims?

In this continuing article relating to the medical claims experience, we will clear the air on the type of medical benefits mentioned in the article.

Those so called medical benefits mentioned include personal accident benefits and critical illness as well as hospitalisation benefits. Except for critical illness policies, which are available from life insurance companies only, the other types of policies are available from both life and general insurance companies.

Personal accident policies provide for treatment due to accidents only. Some accidents may not be claimable, for example, accidents due to driving while under the influence of alcohol or drugs, accidents committed while of unsound mind, provoked assault, etc. In such instances the insurance company may require more information or reports to substantiate the claims. This may give rise to a wrong impression that the insurance company is not going to pay the claims. Agents who are not in the know may exacerbate the situation. 

Critical illness claims are usually quite straightforward as the specific illnesses are pre-defined in the policy documents. While they may vary from company to company, there are only 36 of them. Specialist reports are required to confirm the existence of the illness apart from a personal statement from the claimant. The insurance company will have to ensure the claims are valid to protect the pool of funds for bona fide claims. 

Hospitalisation claims tend to be more varied and difficult to define. Normally, pre-existing illnesses and congenital problems are excluded, while specified illnesses are excluded for a certain period. These often give rise to claim discrepancies. Tests and screenings, unless part of the treatments, are non-claimable.  As hospitalisation claims are based on indemnity, the original receipts are required for claims. These and other conditions may give rise to delays or rejection of claims.

Insurance companies are normally more diligent in validating claims that occur in the early years of policies. Policies which have been inforce for many years usually attract fewer queries as they are beyond the contestability period except for fraud. Most of those reported claims discrepancies may have occurred within the early years or contestability period of the policies. Obviously, agents who are aware and knowledgeable of insurance contracts and products will go a long way in resolving these disputes.

Next issue we will dwell on the dos and don’ts of claims.

Dos and Don'ts - a continuation of the series on Medical Claims

While many may not fully appreciate it, medical policies should be purchased when the insured are healthy. Policies may also be issued with health extra or loading and /or exclusions. Policyholders very often forget about the exclusions. Medical insurance are not only underwritten based on health alone but also moral hazards, occupation and avocation (pastimes). 

Taking note of the above, claimants should be aware of the following dos and don’ts:

1.    Hospital and surgical claims must be accompanied by admission unless it is due to accident. Not only that, treatment in the form of medication or surgery must be administered. Admissions for observations and tests only are NOT claimable.
2.    Do check your bills thoroughly as health supplements, non-medical services (TV, phone calls, special food requests, etc), and non-treatment related screenings are NOT claimable.
3.    Original receipts are required for processing of claims. Duplicates and photocopies are strictly NOT acceptable.
4.    Do check any exclusions, pre-existing conditions and specified illnesses that may not be claimable.  Exclusions and pre-existing conditions may not be claimable for the tenure of the policies or within a certain time bar. Specified illnesses are usually not claimable within the first year or lesser. 
5.    Do ensure that admissions are made in licensed hospitals. Some clinics which operate bedded facilities may be accepted. It is advisable to refer to the insurance companies if such facilities are used.
6.    Where possible, do pre-register admissions as this would expedite the issuance of Letters of Guarantee (LGs) thus avoiding admission delays.
7.    Don’t presume that all illnesses and treatments are claimable.
8.    Don’t use the medical cards like credit cards or charge cards. Medical cards are not “blanket cover” for all medical admissions. Admissibility of claims is subjected to the attending doctor’s diagnosis and report. 

Sometimes, insurance companies may not be able to issue the LGs for cashless admission. This may be due to insufficient medical information, policies which are in-force within the first year or incomplete documentation. In such cases, the medical expenses may be reimbursed upon submission of claims documentation by the insured.

Be aware that claims paid actually reduce the future claims eligibility as the annual and overall lifetime benefits of the policies would be reduced. It is in the interest of the insured to ensure that there is no overcharging or bogus claims. As one claims manager had remarked, “As long as I am provided with the appropriate documents, there is no reason why I should not approve the claims.” Thus, it is the onus of the insured to make sure that the claims department receive the appropriate documents.

The next follow up of the series will be a Q&A of frequently asked questions. You may write in if you have any queries of your own.

Can I claim for medical expenses incurred while overseas from my local medical insurance plans?

Yes but within 90 days of travel and paid in Malaysian currency equivalent. It will not be claimable if more than 90 days continuous travel outside Malaysia. For those who will be residing for more than 90 days, they should consider purchasing a plan in the country of travel.

Can I upgrade an existing medical plan?

Upgrading to higher benefits may require further evidence of insurability. If the policy is accepted, the difference of benefits between the old and new policy will be subjected to the terms and conditions of the new policy.

Can I claim for medical checkups and diagnostic tests done prior to admission?

Medical checkups are usually non claimable. But any tests done which leads to admission would be admissible as a pre-hospitalisation benefit claim. There is often a time limitation of between 30 to 60 days before hospitalisation.

Am I allowed to claim for outpatient cancer treatment?

Most medical policies provide for outpatient cancer treatment. This includes chemotherapy and radiotherapy which may not require hospitalisation. It may be accompanied by a small amount of co-insurance. Please check the policy details or refer to your advisers.

Gold and silver investments ....... Should I rush into this before it's too late?

From a financial planning point of view it is always prudent to discover your needs, investment time frame as well as risk profile before you invest. While it is likely that both these metals will see gains in the future, the growth will not be a smooth one. Investments always have inherent risks and its ups and downs. Investments that suit others may not suit you.

As I travel regularly, I find it a hassle to purchase a travel PA each time I make a trip. What can I do?

You can purchase an Annual Travel PA which provides up to 95 days of cover per trip for a year. Regular travellers will find this not only convenient but also economical. Wings Alliance can help you discover a programme that will fit your need and budget.

Should I take a flexi-loan or a fixed term loan?

It depends on your current source of income and your objectives. Fixed term loan is more suitable for people with fixed income. Flexi-loan provides more flexibility thus requiring greater discipline in repayments. The accumulated capital is accessible in times of emergencies, investment opportunities or business needs. Flexi-loan comes with monthly commitment fees.

What is Takaful insurance?

Takaful insurance is insurance concept of mutual assistance based on the Syariah principles of solidarity, cooperation and responsibility. Participants contribute on the basis of Tabarru’ (donation) to a fund that will be used to help each other in times of misfortune.

Source: Great Eastern Takaful

Do I have to be critically ill before I can claim the proceeds of a Critical Illness policy?

As long as the diagnosis meet the definition of the critical illnesses listed, example, stage 1 breast cancer, the benefits are payable. In fact, from our experience, many claimants have remained well and gainfully employed even after more than a decade. The purpose of the proceeds is to provide lump sum medical funds unlike the benefits of hospitalisation policies which are paid based on reimbursement for treatments.

Can I make a nomination in a Takaful policy?

Nominees may be elected for a Takaful policy for both muslims and non-muslims participants. Muslim participants have an option to name the nominee or nominees to act as beneficiary or Trustee. Where the nominee is intended to act as Trustee, the monies from the certificate shall be distributed according to Syariah Law (Faraid distribution). Where the nominee is intended to be a beneficiary, the nominee will receive the monies on the basis of ‘Hibah’ or gift distributed by the Trustee according to the obligation as given by the proposer.

Non-muslim participants may nominate beneficiaries and appoint a Trustee.

Group Insurance Schemes may be purchased from Insurers thru' brokers or agencies. What's the advantage of taking the policy from Wings Alliance?

Being in this business for over 20 years, we have much experience and information to share with our clients. We have been hands on since day 1, providing claims services, monitoring employee movements, updating information, briefing employees, etc. We provide yearly reviews of the schemes, supporting management staff and troubleshooting with the management.

We often seek to provide competitive rates and methods to save and manage costs like claims experience refunds and wellness management programmes. It is in our best interest to keep our clients happy and satisfied. Furthermore, purchasing directly from the Insurers does not ensure lower premiums. Turnover of their employees may affect the quality of services.

Can I request Wings Alliance to help process and advise my insurance claims?

Yes, we do provide claims services mostly on a pro-bono basis. Occasionally, we may charge a fee to cover some expenses and documentations. For more complex cases which may involve various reports and correspondences, some initial charges may be required. We would provide the figures for your consideration prior to commencing.

I have only 9 staff including myself. Can I apply for a Group Medical Scheme?

Yes, there are schemes available for small businesses such as yours where the businessowners can also enjoy low premiums with high coverage. The premium is tax deductable. For as low as RM550 per annum, an employee can be covered for RM100,000 medical benefits with RM350 for room and board. Spouses and children of employees are also eligible.

Are the premiums for Group Medical, PA, Term and Critical Illness tax deductible?

Premiums for employees’ benefits are tax-deductible provided there is no investment or return element. Proceeds from Group Benefits Schemes may be taxable on the recipients. The claims from medical benefits schemes are not taxable as they are reimbursements for medical treatments.

How do I do a DIY Financial Plan?

You can start by writing down your objectives and the time frame, the more compelling the reasons the better. Next, compile all your current assets and liabilities. Determine the financial shortfall within the specified time frame. Develop a strategy to overcome this shortfall using financial products and services. Then follow through with implementation and monitoring. The success of the plan will depend on the “push factor” and discipline on your part. 

Why is it difficult to save?

Savings is about giving up a little now for the future. Most people will find it difficult to sacrifice current lifestyles for the sake of building up a nest egg for retirement or other objectives. Many would also find very little left at the end of the day for savings. Inflation and commitments also eat into whatever income we produce. And then there is also the question of discipline....with all the temptations of modern living. But the bottom-line is we cannot afford NOT to save.


My group medical insurance claims are insufficient to cover the total medical cost. Can I claim the difference from my personal medical policy?

Yes, but you will need the original receipts as well as the approved claims schedule from the group insurer. This is to allow the second insurer to assess the eligibility and quantum of claims.

My family has bought a few policies from an agent who has since left the insurance company. What should I do?

Most insurance companies will allocate a replacement agent. Contact the insurer to get in touch with the new agent. Insurance companies also allow clients to choose an agent of their choice to service them. You may contact us at or 03-7729 1322 for more advice.

Keluarga saya telah mencarum beberapa polisi hayat dari satu agen yang telah tamatkan perkhidmatannya. Apakah saya patut buat?

Kebanyakkan syarikat insurans akan melantik agen baru untuk mengambilalih perkhidmatan itu. Anda boleh menghubung syarikat insurans untuk mendapat maklumat agen baru itu. Syarikat insurans juga membenarkan pelanggan memilih agen pilihan mereka. Anda boleh menghubungi kami di atau 03-7729 1322 untuk nasihat selanjutnya.

I was advised to purchase a Cash Guarantee Pay-out Policy for my retirement plan with a return of 8%. Should I invest in the policy?

Such guarantee return plans pay a return rate based on the Sum Assured and NOT the amount invested. Thus, a RM100,000 plan may require an outlay of RM40,000 a year for 6 six years. The guarantee return is based on the RM100,000 sum assured rather than the total amount invested which would be RM240,000 in 6 years. It would be wise to request for the FULL quotations to ensure there are no hidden conditions like "guarantee for only 6 years", reducing guarantee returns, or partial guarantee etc.

LIFE INSURANCE TRUSTEE UNDER FSA 2013..... Since 1st July 2013, the Financial Services Act (FSA) 2013 has come into effect, replacing the Life Insurance Act (1996).

Since 1st July 2013, the Financial Services Act (FSA) 2013 has come into effect, replacing the Life Insurance Act (1996). The FSA 2013 is introduced to consolidate not just the Life Insurance Act but other financial related Regulations as well with the intention of promoting financial stability.

One of the significant changes in the Act affecting Life Insurance Ownership is policyowners can no longer appoint themselves as Trustee of their policies ( FSA 2013 Schedule 10 para 5 (1) ). Policyowners who had appointed themselves as Trustees prior to this Act, may retain their Trusteeship. This clause only applies to Life Policies that come into force after 30 June 2013.

In the event there is no Trustee, the nominee(s) competent to contract shall be the Trustee(s). Where the nominee(s) is incompetent to contract, the parent of the incompetent nominee(s) other than the policyowner will be the Trustee. Where there is no surviving parent of the incompetent nominee, the Public Trustee will be appointed.

Policyowners may choose to appoint Corporate Trustees to achieve the same especially where a suitable Trustee is not available.

Financial Resolutions - Twenty-one (21) ways to manage your expenses!

It is the time of the year again when many of us make resolutions for keeps or perhaps a futile exercise to be repeated next year. Due to the expected price hikes, we believe committing to the financial resolutions of 2014 is imperative to ensure the future success of your financial goals.

On New Year's Day, while having a dim sum breakfast, I found that this restaurant I visited had already raised the prices of all the food varieties by at least 5%. That means I either fork out an additional 5% or I consume 5% less of the dim sum varieties. I chose to lose some weight!!

That bring us to the need to make financial resolutions that will prevent the derailment of our financial plans. So for the next 21 sessions, we will share 21 ways of managing expenses or saving costs. Personal sacrifices are the foundation of financial success.

For starters, each time when we want to spend or splurge, let's ask ourselves 3 times why we need the item and what alternative do we have. Perhaps we can achieve more with less....$$$! Benjamin Franklin had suggested in order to change a habit, you simply have to do it 21 times over. And that's what we will do for the next 21 sessions.

Happy New Year and may we achieve our financial intentions!

21 Ways to manage your expenses! Habit 1 of 21 - Managing your utilities

Most of us would have to contend with paying monthly utility bills such as electricity, water, fixed or mobile phone lines, cable TV, broadband etc. It pays to pay attention to these bills even though they may only account for a small portion of your expenses. Because they are recurring expenses, small amounts of savings may account for moderate gains as the malay proverb goes "Sedikit-sedikit, lama-lama jadi bukit!". Small steps we can take include:

1. Switching off lights, fans, air-cons and tv sets when not in use. Appliances consume electricity even on "standby mode".
2. Maintaining the air-con temperature between 24 - 26 degrees Celsius unless it is a very hot day! At this temperature it is more energy efficient.
3. Removing unused plugs from wall sockets will reduce minor power leakages.
4. Plan your household chores to reduce the frequency of switching on/off. Heat producing electrical appliances like ovens, irons, kettles, cookers, steamers, fryers etc tend to consume a lot of electricity especially when switched on often.
5. Reduce water wastage by using showers instead of bathtubs, check  for dripping faucets and leaking pipes, save rain water for watering plants, etc
6. Review your phone line packages. Opt for less expensive packages where possible since most people use free apps like WeChat or WhatsApp instead of smses.
7. Where possible use FREE WIFI!

Simple as it may look, the above steps may save between 10% to 20% of the monthly utility bills. The success is dependent upon persistent application.

21 Ways to manage your expenses! Habit 2 of 21 - Car Pooling

The idea of car pooling has been around for a long time. The concept of pooling from home to work and back is often impractical, or at best, an inconvenience. But there are variations which may be more practical and cost efficient.

Parents can car pool to fetch children to and from schools. Some parents may send the children to school while others may fetch them home. This also promotes good neighbourliness. Office executives can car pool when going out for lunch thus saving petrol as well as parking charges. They can even car pool when meeting up with clients by planning their meetings and appointments within the same vicinity, eg, meeting for lunch at different food outlets within the same shopping mall.

Car pooling need not be confined to work days. During weekends while doing marketing or grocery shopping, neighbours can also pool their cars. Better still, car pool with sibling families if they stay nearby. Apart from saving on fuel expenses, we will also be doing our part to protect the global ecological balance. 

Such proactive steps can only succeed if we put them into action. And these require us to develop awareness at all times until it becomes a habit. Regularity breeds familiarity.

21 Ways to manage your expenses! Habit 3 of 21 - Managing Savings

A very rich tycoon was once asked why he bothered to bend over and pick up a penny he found on the roadside when he has billions in the bank. His reply was plain and simple yet enlightening, “Even a penny has a value and a healthy respect for that value is required to deserve riches.”  No matter how small the savings, it is significant in the overall financial picture.

It is important to develop the habit of savings especially in the face of the current price hikes of various essentials. Starting with our pay, how many of us set aside a portion of our salary for the proverbial rainy day. Even if it is as small as a ringgit, it is still a start. It is not so much about the amount but rather the discipline.  Here are some practices we should inculcate:-

1) Don’t buy on impulse; prepare an intended shopping list beforehand even if it is just mental.

2) Take note when going for sales that not all products may be on sale at the same time. Many establishments eg hypermarkets, usually employ a loss leader concept which offer a very low price for an essential item while the rest may be higher than elsewhere. This is when ‘by-the-way’ shopping will nullify any savings.

3) Compare the amount of savings against the cost of gaining access to the sales. It is not wise to save RM10 while the petrol, toll charges and parking exceed the savings.

4) Making do with what you have now and making the purchase at a later date where possible eg mobile gadgets. Delayed gratification may save you as much as 50% of the launch price.

5) Reducing the frequency of eating at more expensive outlets.

6) Pay your credit cards on time. Pay in full where possible! Many are not aware the monthly compounded interest can exceed 18% pa.

Have you ever wondered how is it that a parent can support a few children’s education even with a small income? It mainly boils down to sacrifice and savings. Do not underestimate the power of disciplined savings!

21 Ways to manage your expenses! Habit 4 of 21 - Car Maintenance

Despite the high prices of cars, car ownership has been increasing. This is due in part to the poor public transport system. While it may be easy to purchase a car, maintenance may be a different issue. It can take up to as much as 2-3% of your income, more for older cars. 

Cars should be regularly serviced especially old cars to reduce breakdowns which may result in costly repairs.  A good and reliable mechanic is important to ensure the servicing is done meticulously. Spend some time to look for an experienced mechanic who you can depend on. This can save you time and money in the long run.

Do not be penny wise, pound foolish! Use quality materials and parts which can give you prolonged performance compared to inferior ones which may require constant replacements.

Cars are not assets but a convenience to take us from one place to another. As such it is important to select the right car based on your needs. This will give rise to savings which can be wisely invested for your future.

21 Ways to manage your expenses! Habit 5 of 21 - Managing the cost of Basic Sustenance

It is not uncommon for Malaysians to over consume in times of festivities like Chinese New Year. Not only will much of the food go to waste, but over eating can be detrimental to health.

Much of the income of the average Malaysian is spent on food. There is much that we can save if we would only consciously manage our food intake. Start by reducing the frequency of patronising expensive food outlets. Expensive does not equate delicious! A reduction of 20% of frequency will result in an equal amount of savings.

Be mindful of the number of dishes ordered. Many a times we actually do not need 7 to 9 dishes for a sumptuous meal. On occasions 3 to 5 may serve just as well. Order larger portions instead if the group is bigger. Drinks often comprise a large portion of the bill. To improve savings it is often wise to consume good food with tea or just plain water.

There is a Chinese advice that suggest, "Zao Shang Chi De Hao, Xia Wu Chi De Bao, Wan Shang Chi De Shao!"  The English equivalent would be “Breakfast like a King, Lunch like a Commoner and Dine like a Pauper!”. This sound advice actually leads to good health. Eat mindfully and save.

21 Ways to manage your expenses! Habit 6 of 21 - Managing your insurance premiums

We have often come across policyholders who seek our advice regarding policies they felt they had bought wrongly. Some of these include policyholders who had bought savings policies with purported high returns but very low coverage costing thousands or tens of thousands of premiums. In these current times the premiums become a burden. There is nothing much we can advise except to reduce the plan.

It pays to scrutinise the proposals before committing to them. The main purpose of purchasing a policy should be protection followed by savings with reasonable return. Would-be policyholders should be aware the returns quoted are not based on capital invested but the sum assured. As such, a 10% return for a RM10,000 premium policy may only yield RM500 (sum assured is only RM5,000).

Purchase insurance policies according to needs and budget. Do not over stretch the budget as our financial situations may change. Policy with cash values can help tide over difficult times thus it is better to keep up with existing policies rather than replacing them with “new” policies.

Likewise review all existing general insurance policies like motor, fire, burglary, personal accident, medical and other insurances. Be aware some of these insurances will see an increase of premiums in the new year. It pays to be financial cautious and diligent!

21 Ways to manage your expenses! Habit 7 of 21 - Managing insurance premiums savings

In our last writing, we advised policyholders to review their existing insurance policies. Much savings can be gained from this simple exercise. In fact, annual or bi-annual reviews are necessary.
When insuring residential or commercial buildings, the sum insured should be based on cost of reconstruction rather than market value of the buildings.  A semi-detached house valued at RM2.5million may be reconstructed in the event of a fire for RM1million including removal of debris and consultant fees. Thus the sum insured for fire insurance should be RM1million instead of the market value. Pay attention to extra perils like lightning damage, flooding, soil subsidence etc.

There may be many purchasers of apartments and condominiums who are required to take up fire policies by the financial institutions which provide the mortgage loans. But the Joint Management Bodies may also require them to contribute premiums to the Master Policy, thereby in effect paying double premiums. In such instances, it would be advisable to write to the financial institutions to either reduce or waive the policies. Please note that these policies normally cover only damage by fire. Burglary and liability policies should be taken separately.

Annual reviews are also advisable for burglary, M & E and motor insurances as allowances should be made for depreciations and additions. We cannot over emphasise these exercises could save you many hard-earned ringgit!

Call us up for a free policy review or advice at no obligation!

21 Ways to manage your expenses! Habit 8 of 21 - Managing expensive hobbies

How many of us have expensive hobbies or hobbies which involve much expenses? Cars, super bikes, Japanese Kois, exotic pets, bonsais (expensive ones), mountain climbing, scuba diving etc? These are life enhancing experiences giving ‘deeper’ meaning to life and lifestyle. Often times it’s the stuff that provide the rejuvenating juices we all need from time to time either as a stress reliever or impetus to push harder to achieve our goals.

I used to dabble in Japanese Kois. These ornamental fish can run into thousands of ringgit each, if not more. As all worthwhile goals require sacrifices, I decided to reduce my expenses like purchase of new fish, cutting down expensive fish feed, reducing impulsive purchases of equipments and supplies etc. Eventually I managed to reduce by a couple of hundreds expenses per month. Nowadays I’ve taken up less expensive hobbies.

Review your expenses which may not be necessary while retaining the same pleasure you derive from your hobbies. Group travels in less expensive lodgings for your climbing expeditions or photo outings can save some expenses with new experiences.

Life should be lived well. And we can often do it with less expense. As one famous architect would put it, “Less is More!!”

21 Ways to manage your expenses! Habit 9 of 21 - Managing health expenses

With the current rising cost of medical care, even an appendectomy can set you back RM10,000 per incidence. The growing number of private hospitals is an indication of the lucrative healthcare business. This means we will have to dole out more cash for treatment of various illnesses as well as pregnancies. Planning ahead may save you a lot of heartaches!

As the saying goes ‘Prevention is better than cure’, it pays to look after your health. Delaying the onset of illness means there will be more productive years to accumulate wealth for retirement and medical care. Choosing a healthy lifestyle by eating right, exercising and de-stressing translates to savings in the long run.

Private healthcare is expensive and still rising making public healthcare a viable choice. While it may take a longer waiting period and the general facilities may be less comfortable, the public medical facilities may be more complete and the charges more reasonable. Additionally, one should consider a medical insurance policy to pay for the medical expenses. This may serve as a measure to preserve precious retirement funds.

21 Ways to manage your expenses! Habit 18 of 21 - Managing your investment funds

Throwing good money down the drain seems to be a ‘favourite pastime’ of many a ‘would-be Warren Buffet’. Many uninformed investors are trying to make quick money in the stock market without sufficient knowledge of stocks or are just depending on rumours or hearsay. While the stock market has been in a bull mode since 2009 after the sub-prime debacle, it has not been rosy all the way. There is a lot of market noise most of which are untrue. Thus, if one depends on these rumours, the stock market can be a risky venture.

Many stories are told of huge gains reaped effortlessly through investing in the stock market. But stocks and shares investment is a zero sum game - when someone gains, someone else will lose! As such, investing in the stock market without sufficient information is almost tantamount to gambling. Unless you have unlimited resources to invest, managing your limited funds by investing wisely would save you lots of pain by mitigating unnecessary losses. At times it is better to be safe than sorry!

21 Ways to manage your expenses! Habit 19 of 21 - Managing your retirement accounts

Most Malaysians especially the employed, plan their retirement funds via EPF. As past records have shown, this is insufficient for most retirees. It would be wise under current economic scenarios to set up an additional retirement account. These can be in the form of savings accounts, fixed deposits, investment accounts or life insurance policies.

Retirement accounts should preferably be NOT easily accessible. Many of those who save for their retirement via saving accounts or FDs, find it irresistible at times to access their retirement accounts to occasionally splurge. These splurging episodes may include buying a new car, going for a trip, purchasing costume accessories etc which may seem insignificant or small at the spur of the moment, but would have long term consequences. This is especially so if it involves a senior saver. There may not be sufficient time to take advantage of the compounding effect of money. Additionally, one should prepare for downturns which may reduce contributions to savings. ‘Make hay while the sun shines’ is the motto to live by. 

While spending may be a pleasant activity, retirement planning requires discipline, focus and sacrifice for the long term good.

Can Cash Guarantee Pay-out Policy provide sufficient protection for dependents?

Most insurance companies now have Cash Guarantee Pay-out Policies guaranteeing different rates of return and different terms of payment. While the rates may indicate high values like 8% to 9% returns, which are not true returns, the protection is very insignificant. The actual returns of these types of policies are often slightly better than FD rates only. The sum assured on the other hand is barely higher than the total premiums paid. In order to provide sufficient protection for dependents, Whole Life, Term or Investment-linked products offer much higher coverage. In addition, there may be bonuses and the term of coverage is longer.

What is GST?

GST or Goods & Services Tax is a consumption tax under the Royal Malaysian Customs Department. Unlike Income Tax which is a tax on profit, GST is charged on all goods & services consumed by all individuals except for exempt or zero rated goods & services. All businesses with revenues of RM500,000 per annum and above must register by 31 December 2014. A penalty will be imposed after this date. To-date less than 10% have registered. 

Companies with revenues above RM5million will have to submit monthly statement to the Customs office while those from RM500.000 to RM5million will have to submit quarterly statements. Commencing from 1st April 2015, the GST levy is 6%. 

Are all services taxable under the GST regime?

Except for standard rated supplies, all supplies which are zero-rated, exempt and out of scope are not subjected to GST.

Zero-rated supply include export of goods and services and specific supplies gazetted by government. Exempt supply include land used for residential or agricultural purposes, residential buildings, domestic transportation of passengers, and education, financial, childcare and healthcare services. Out of scope supply include cash donations, compensation or liquidated damages, disbursements, dividends, loan repayments, capital injections, contributions to pensions, provident funds or social security, non-business transactions, insurance indemnity settlement and supply under Islamic financial arrangements.

What is business debt cancellation?

Most businesses would have borrowings in the form of loans or debts due to creditors. While the business is still ongoing, these debts will be settled in due time. But in the event of untimely death or critical illness, the repayment may be difficult. A debt cancellation plan will pay off these debts in a single installment with no future liabilities. These plans need not cost much and are mainly tax deductible. There are many other advantages to implement such a plan.

Will insurance premiums be subjected to GST?

Currently, life insurance premiums will not be subjected to GST, whereas, general insurance premiums will. Thus, motor insurance, fire insurance, burglary insurance, construction insurance and commercial insurance premiums are subjected to the 6% GST. Since medical insurance and personal accident insurance are categorised as general insurance, the premiums are also subjected to GST. As it is common to include medical and personal accident riders in life insurance policies, the portion of premium attributable to medical and personal accident coverage will be taxable.

Come 1st April 2015, the portion of insurance coverages remaining after the date shall be subjected to GST based on a pro-rate formula,

                     Premium x 6% x no. of days left

This scenario will likely give rise to a “trickle down effect” of other goods and services. The final details have yet to be confirmed by the authorities as they are considering the feedback from the public.

Are life insurance premiums for private corporation tax deductible?

There are 2 types of life insurance policies – with and without cash values. Generally, life policies without cash values are tax deductible while those that accumulate cash values do not enjoy tax deduction. The premiums paid for cash value policies will be treated as a benefit to the employees. On the other hand, proceeds of life policies without cash values which enjoy tax deduction will be taxable on the corporations.

Is insurer liable for third party claims when insured breaches T&Cs?

Consider this scenario: you were riding your motorcycle and your handbag was snatched from behind by the pillion rider of another motorcycle. You lost your balance, fell and injured yourself badly. You sought compensation from the insurer of the other motorcycle for third party bodily injury (TPBI). As the motorcycle was used for illegal purposes when you sustained your injury, can the insurer repudiate your claim on the basis that the insured had breached the terms and conditions of the policy? Find out the answer by reading this recent court case below:


Tuesday, 5th May 2015

Consider this scenario: you were riding your motorcycle and your handbag was snatched from behind by the pillion rider of another motorcycle. You lost your balance, fell and injured yourself badly. You sought compensation from the insurer of the other motorcycle for third party bodily injury (TPBI). As the motorcycle was used for illegal purposes when you sustained your injury, can the insurer repudiate your claim on the basis that the insured had breached the terms and conditions of the policy? Find out the answer by reading this recent court case.

Legally Speaking - The extent of an insurer’s liability in a third party claim

The Sun daily 5 May 2015

IN Malaysia, it is mandatory under the Road Transport Act 1987 (RTA) for you to insure your vehicle against damage and/or third party risks. A third party insurance policy insures you against risks such as death and injury to a third party as well as damage to the third party's property. This article will discuss the extent of an insurer's liability in a third party policy claim following the recent Court of Appeal case of Pacific & Orient Insurance Co. Bhd and Kamacheh a/p Karuppen on March 6, 2015. Specifically, this article considers whether an insurer is liable to pay the third party if, at the time of the accident, the insured vehicle was used for illegal purposes.

Brief facts of the case

On March 2009, Kamacheh was riding her motorcycle when a pillion rider on another motorcycle snatched her handbag from behind. She tried to resist and, as a result, fell off her motorcycle and sustained injuries. The other motorcycle was ridden by the son of the insured which was covered by Pacific Orient. Kamacheh filed a civil claim against the pillion rider and the son of the insured for the injuries sustained by her in the Sessions Court. Pacific Orient had repudiated the insurance policy after realising that the insured had breached the terms and conditions of the policy. On March 2011, Kamacheh obtained a judgement in default against both the pillion rider and the son of the insured. Damages were assessed by the Sessions Court in the sum of RM219,112. As no payment was made either by the pillion rider or the son of the insured, Kamacheh sent the sealed copy of the judgement to Pacific Orient. However, Pacific Orient did not make any payment to Kamacheh, and she later commenced a recovery action against Pacific Orient for the full judgement sum of RM219,112.

Liability of the insurer for the injuries caused to a third party

Both the Sessions Court and the High Court held that Pacific Orient was liable to pay the sum of RM219,112 to Kamacheh because there is a statutory obligation under section 96 of the RTA requiring an insurer to pay (Kamacheh) the judgement sum. Section 91(1)(b) of the RTA stipulates that a policy of insurance must be a policy which insures such person or class of persons as may be specified in the policy in respect of any liability which may be incurred by him or them in respect of the death of, or bodily injury to, any person caused by or arising out of the use of the motor vehicle.

The judges agreed that the word "arising out of the use of the motor vehicle" connotes not only the actual driving of the vehicle but also the use of the vehicle on the road. Furthermore, as the liability of Pacific Orient is statutory in nature, there was nothing in the RTA that could exempt Pacific Orient from its liability to pay Kamacheh even though, at the time of the incident, the motorcycle was used for an illegal purpose. The Court of Appeal held that Section 91(1)(b) also included liability for damages arising from acts of a criminal nature. In any event, the court held that Kamacheh's injuries were indeed caused by or arose out of the insured's use of his motorcycle and that there is nothing in the RTA that restricts the right of a third party to make a claim arising out of the use of the vehicle in the commission of a criminal act.


Whilst this case appears to allow an insured to avoid the personal liability of paying an aggrieved third party by "transferring" his liability to the insurer, the courts will not allow an insured to profit from his wrongful actions. In the event a third party obtains judgment against an insured, the insured, if he is at fault, would not be entitled to claim against his insurer. The objective of the law is to protect the third party who has suffered loss and not the insured, if he is at fault, whose asset may be insufficient to satisfy the losses suffered by the third party. Therefore, the insured's (in)ability to pay damages to the third party is mitigated or "insured" by the insurer. It is unsurprising that the courts decided in favour of the third party given the reasons above. The position taken by the courts mirror the law in other countries such as Singapore, the United Kingdom and India. Whether or not this decision will now cause Malaysian insurers to raise insurance premiums remains to be seen, and if premiums are increased, whether this would run afoul of the Price Control and Anti-Profiteering Act 2011.

Contributed by Nur Ayuni binti Ab Rahim of Christopher & Lee Ong (

Savings or Protection?

It is not uncommon for us to receive queries regarding the appropriateness of insurance saving products. Many expressed their reservations about such products which they had bought usually within the last 2 to 3 years. They were “enticed” into taking up such products which were promised high returns by agents, leaving protection by the wayside. In addition, these products mostly involve high outlay in the tens of thousands with low sum insured. While there is nothing wrong to take up such savings programmes, life insurance is more appropriate for protection. This is especially so if one is taking a policy for the first time or do not have sufficient protection. Programmes which focus on high returns should more appropriately form part of the investment rather than insurance portfolios. In any case, high returns hardly exist in life insurance products.

Can I customise a Group Insurance Policy for my company?

All Group Insurance policies can be customised. But the flexibility will depend on availability of funds and the size of the workforce. Where more funds are available there is obviously more choices. Normally, if the number of employees is small, for example, below 20, insurers will offer only standard packages. Where the number is large, for example, 500 employees, specially designed packages may be offered. Many options are available for such cases.

If I have a Group Term Policy, why would I need a Group PA?

Group insurance schemes are designed to provide protection to employees. Group Term usually covers death and total permanent disability due to illness or accident. On the other hand, Group PA covers death and disability due to accident only. In addition, the cover for disability may be permanent or temporary and may be partial or total. Thus for example, if an employee suffers an accident at the work place, losing 3 fingers, the Group PA may pay benefit for permanent partial disablement. Whereas, the Group Term would not pay any benefit since it is not a total permanent disablement.

In fact, Group PA and Group Medical schemes are more common than Group Term schemes.

How can a Group Benefit Scheme help retain employees?

Hiring and retaining good employees is a challenging exercise for HR managers. More so due to the limited supply of good workforce, Group Benefit schemes will double as a recruitment and retention tool. Where the benefits are comprehensive which normally include personal accident and hospitalisation as well as critical illness cover, the employment package will become more attractive. Obviously, the overriding concern is the cost of implementation. That is why it is important to carefully study its impact on the profitability before implementing any Group Benefit scheme. Criteria for consideration include the amount of coverage, types of benefits and eligibility of employees.


Due to the current spell of unpredictable weather conditions, please review your current motor insurance as well as fire insurance policies to ensure you are covered for flood damage. Check with your agents and request for extension of flood cover. It pays to be vigilant. Drive safely !!

True Scary Tales...This is a series of true events...

This is a series of true events...There are tales of things that go bump in the night! There are even scarier ones that go bump in the day ! Leaving you in a financial mess.

Our first story starts....when my father was diagnosed with leukaemia, he was given only 6 months. During his hospital confinements, there were occasions when he related weird dreams of apparitions in white. There were also large boulders with faces of these apparitions. He will wake up suddenly only to find his dreams continued when he went back to sleep. We could not understand the interpretation for his dreams.

He was advised to prepare his Will which he did through a lawyer friend of his. Upon his death a few months later, I visited the lawyer. To my horror...he had only included 2 items in the Will - his apartment and his car! The lawyer left out another property which I shared with my father and my father's bank accounts. This meant that we had to go through the hassle of applying for a letter of distribution which incurred wastage of time and money. All the lawyer could say was "Sorry". 

It took us slightly more than 2 years and some running around to various agencies before we were able to sort it all out! I approached Amanah Raya Bhd for assistance as it was under the small estate claims. My siblings were also dragged into this hassle. 

I do not wish this nightmare to happen to anyone. It pays to be extra careful when planning for the distribution of estates. It is not an activity to be taken lightly!

I was advised to write a general Will instead of listing all my assets for distribution. What would you advise?

While it is easy to write a general Will, this may not be applicable for all testators. Anyone can write a Will as long as you have 2 witnesses, apart from beneficiaries and executor. To write a general Will where all assets are given to 1 or a group of beneficiaries may work if there are no other rightful beneficiaries and the distribution is straightforward. 

There are times when testators may want specific beneficiaries to own particular assets. An example would be to leave a business to a family member who is capable of running the business while leaving properties to the others who cannot. Income producing assets may be given to beneficiaries who are incapable of earning an income. Personal belongings like jewellery, watches, heirlooms, and collectibles may be given to specific persons including non family members. Thus, whether one should write a general Will or not is dependent on each individual circumstances. Remember, there is no such thing as one size fits all !!

SCARY TALE 2 ..... a series of true events...

Some years ago, a friend of mine was driving along Jalan Ampang when he stopped at a traffic light. Within moments a motorcyclist rammed into the left back of his car damaging the indicator light. The impact was so great, the motorcyclist was flung to the front of the car. The motorcycle was almost totally wrecked. My friend alighted from the car to check on the motorcyclist who was writhing in pain near the front bumper. Apparently, he had fractured his right fibula. Out of compassion, my friend used his new tie to tie a splint around his right leg. After contacting the employer of the motorcyclist, he drove to the general hospital. During the journehy, the motorcyclist kept apologising for the accident while still in pain. Apparently, he was trying to best the traffic lights while making a right turn when he collide into my friend's car. 

At the emergency ward he met up with the employer. After explaining the situation, my friend left the hospital. The employer assured my friend that since it was the motorcyclist's fault, no action would be taken. Fortunately, my friend had the presence of mind to make a full police report. Although it was only a damaged indicator light, he insisted the police take pictures as well as record of the accident.

Four months down the road, my friend received a letter from the motorcyclist's lawyer summoning his appearance in court. My friend's insurer subsequently contacted him to pay a visit to the insurer's legal advisor. He described the whole accident and provided all related information. After assessing the information, my friend appeared in court with the legal advisor. Due to the thoroughness of the documentation and the nature of the accident, the case was dropped without any financial loss.

My friend went through a period of mental torture leading up to the court appearance. His presence of mind to document the whole process accurately saved him from a would be nightmare! It is always prudent to ensure that all accidents are duly reported and documented to protect yourself from unnecessary legal suits especially where it involves bodily injuries.

SCARY TALES 3 ... a series of true events...

Here's yet another scary tale that will keep some of you wake for the night. 

In 1998, a client of mine, Mr Liew, was admitted to fairly established hospital in KL for what seemed like acute appendicitis. Upon investigation, he was diagnosed with left kidney necrosis and had to be operated upon immediately. After the surgery and while recuperating, the claims was processed and paid. 

But, Mr Liew was not recovering even after 2 weeks. He developed high fever and was delirious. After a family members and friends discussion, we decided to send him back to his hometown to seek further medical advice. He was admitted to Ipoh Specialist Centre where he underwent more investigation. It was discovered that the left kidney was not removed and had begun to putrefy. This was the cause of his high fever which did not seem to subside. Subsequently, he underwent another operation. This time a left radical nephrectomy which is the total removal of the left kidney. He was able to walk about within 5 days and was promptly discharged. Had he delayed it might have caused him his life. He was 29 years old then.

SCARY TALES 4 ... a series of true events...

A businessman once related an incident that happened in his hardware shop in Setapak KL in the early '90s. It was in the late afternoon when there were no customers in the shop, 2 would-be customers walked in to inquire about some machineries exhibited in his shop. These were portable machines costing a few tens of thousands ringgit each. Suddenly, they flipped out knives and herded the businessman and 2 of his staff into the glass cubicle office. Meanwhile, one of them pulled down the shutter and proceeded to ransack the office for cash after tying up the businessman and his staff with wire. They were not hurt as they were compliant. 

Eventually, they left the premises after looting cash and a couple of portable machineries. The businessman and staff were released only after his partners and co-workers returned. 

After making a police report, the next day he proceeded to file for insurance claims as they had bought a buglary policy for the business premises. Soon the adjustors came and took pictures and filed a report. Not long thereafter they received a reply from the insurance company, and to his horror, this burglary was not covered. The reason given was the policy they bought covered only forcible, violent and visible entry. This incident happened when the premise shutters were open. In addition, there was no signs of forcible, violent and visible damage to gain entry. This in fact is defined as a hold-up. Thus, the insurer declined the claim. 

Not all policies are designed the same. Some insurance companies only cover basic burglary accompanied by forcible, violent and visible entry to premise. Whereas, certain other insurers may provide a comprehensive cover which include full theft. This will partly explain the cost differential between different insurance company's policies It pays to understand the insurance contract conditions before any calamities.

SCARY TALES 5 ... a series of true events...

During the last heavy rains in Klang Valley which resulted in flooding in various parts of the city, a relative's 1 year old MYVI was caught in a flood. The water rose so quickly that there was no time for her to move the car to higher grounds. The car was submerged almost to the roof in the flood waters. After the flood subsided, she had to arrange for a tow truck to tow the car to the workshop. It was then that she discovered the motor insurance policy did not include the extension for flood. As such, she could not make a claim but had to pay out of pocket. The repair bill came up to RM6,000.

For a person who had just started working, this made a big dent in her savings as the repairs  was a few months of her salary. While we may want to save on insurance premiums, it pays to understand the policy contract so as to avoid leaving out important risks. Unlike life insurance contracts, general insurance contracts are based on the concept of indemnity. Thus there are various risks or perils that may need to be covered through extensions. Leaving out some of these perils may save some premium ringgit but may end up losing more at the end. This is a classic case of "penny wise, pound foolish!"

SCARY TALES 6 ... a series of true events...
Gary was a fortyish successful businessman. Having spent years building the business with his brothers, he had accumulated more than a dozen landed properties around Klang Valley. Some of these properties were in very reputable addresses. Even with his wealth, he led a frugal lifestyle.
One day a few years ago, as he was driving, he suddenly lost his sense of direction and could not reach his intended destination. As it was during the weekend, he waited until the first working day of the following week to visit his doctor. After undergoing some tests, the doctors informed him that there was a tumour in his brain. He had to undergo treatment as soon as possible. Due to the location of the tumour, he had to undergo chemotherapy. He responded very well to the treatment but had to restrict his diet. 
It was then that a financial advisor was referred to him to help review his Will. He had young children between 2 to 9 years old. His earlier Will had named his spouse and children as joint beneficiaries of his estate. The advisor had suggested that it may be better to Will some of the properties directly to the spouse so that she may manage the properties without unnecessary encumberances. On the other hand, he may also set up a Trust as his children were still very young. But he wanted to retain the original format as he was confident of recovery. A guardian for the children was appointed. 
A few months after, his condition deteriorated as the tumour had returned with a vengence. Soon he lost his sight followed by complete loss of memory before he passed away. Cancer is a very scary illness especially when it is cancer of the brain. In Gary's case, it was a slow dying process as he began to lose his faculties one by one. The family had to begin picking up their lives after he was gone. When Gary was recovering after the chemo, he  had confided that should he return to health, he would learn to enjoy his hard earned wealth with his family. He regretted choosing a spartan lifestyle. Life sometimes does not afford us a second chance.
Meanwhile, the process of sorting out the estate was complicated by the nature of the distribution of the properties in the Will. Although Gary insisted on a general Will, a detailed Will specifying the distribution of each property separately or a Trust may have worked better in ensuring the children's future. This is an example where a general Will may not be a good idea.  As the surviving spouse is the sole guardian of the estate, the children's share of the estate is not guaranteed if something happens to the surviving spouse.
SCARY TALES 7 ... a series of true events...

Sometimes it can be dangerous driving alone in the dark of night in remote areas far from human habitation. And it can be a scary experience too. Since this is the season of Halloween, we thought we would like to share a scary but true experience....

An architect friend related this story many years ago. He was on one of his project trips in the East Coast when he found himself driving home alone in the dead of night. After more than half an hour of driving in the dark with jungles on both sides, he detected an aroma in his car. Fearing for the worst he looked into his rearview mirror and saw a female figure in red at the back seat!! He froze in his seat but managed to continue driving. He started shouting profanities as he had heard an old wives'tale that shouting profanities will scare away the spirits. Apparently it worked for soon after shouting the vision disappeared. was short-lived! Soon he heard some noise on the roof of the car followed by flowing red cloth sliding down the windscreen. The same apparition appeared, this time sitting on the bonnet of his car!! He stepped on his accelerator but the apparition remained unmoved on the bonnet. So he started shouting profanities again and for awhile the apparition disappeared only to re-appear again a few times over. He was sweating cold sweat all over. He must have been driving for more than an hour when to his relief he saw lights coming from houses in front. He sped towards the houses and stopped right in front of one of them. An elderly man came out and on seeing my friend's frightened expression, exclaimed "You must have seen her too!". According to this elderly man, this spirit is quite commonly seen by those who drive alone at night along that stretch of the road. 

My friend was lucky he did not meet with an accident despite speeding. And he vowed never to drive alone again in the dead of night in remote areas.


SCARY TALES 8 ... a series of true events...

In 2011, a friend was driving home around 7pm in Ara Damansara when his car was bumped lightly from behind. He carried on driving for a distance but noticed from the rearview mirror that the car behind had pulled up to the side of the road. Fearing something may have happened to the driver, he too stopped his car about 80 meters away. He proceeded to walk back towards the other car. Halfway the doors opened and out came 2 burly men. They ran towards him. My friend quickly turned back to try to get back to his car. Before he could reach his car, he was pushed onto the curb. The 2 men got into his car, a Honda CRV, and drove off.

My friend called his wife who was nearby to pick him home. At home, they tended to his wounds which included bruising of the left shoulder and hand, the left side of his head as well as the thigh. About an hour later, he went to the police station to make report. He was surprised to hear an earlier police report had been made relating to his car. Apparently, his car had knocked down a pedestrian in Puchong. His timely police report absolved him of the later accident involving the pedestrian. The car was never found. But he managed to claim for the loss of the car in full.
It is important to make a report as soon as reasonably possible. While this may give the police an early lead, it will also prevent any hassles especially when it involved pedestrians.
SCARY TALES 9 ... a series of true events...
There are many people who travel annually but may not be aware of potential accidents that may disrupt their well planned holidays. The following story happened about 8 years ago.
This family of 4 was on one their annual holidays in Australia when something unexpected happened to their 5 year old daughter. They frequently visited their friends while on holidays to catch up on the latest family happenings. While the parents were chatting away, their children played with the family pet dog. For no obvious reason, the dog suddenly lurched at the daughter and bit her on her face. Luckily for her, the dog stopped immediately as it was probably a response due to an agitation.
They immediately brought her to a family clinic where she was given a few stitches and an injection. The doctor advised that since she is still very young, the bruises would heal fully without any scarring. Meanwhile the medical bill came to quite a few thousand ringgit. Upon returning to Malaysia, a claim was submitted together with the medical bills and a doctor's report. The travel PA paid for all the medical bills.
While many do not anticipate any untoward incidents when on holidays, unforeseen happenings do sometimes occur like food poisoning, falling sick, skiing accidents, ruptured blood vessels or even heart attacks. It is also common to experience disruption in travel like delayed flights, adverse weather conditions, missed flights, loss of documents, and of course the perennial problem of loss of baggage. All theses scary inconveniences can be mitigated by making sure you have a travel PA with you. 
SCARY TALES 10 ... a series of true events...
One evening I received a call from a friend of mine informing me that our friend Alex's daughter was admitted to a hospital 2 days ago. Apparently, she collapsed while in her college. Upon admission, she went into a coma. The consulting neurosurgeon who was from another hospital did not attend to her all this while. Due to past experience, I advised Alex to send his daughter to another hospital where there was an in-house neurosurgeon. I was fearing for the worst.
We managed to admit the daughter the other hospital around 8pm the same day. She was immediately sent for an MRI scan. We waited for the results while we attended to the daughter. Not too long after, the neurosurgeon met with Alex and his wife. He broke the news that the daughter had a ruptured brain aneurysm and the blood had clotted. She was basically brain dead and would depend on life support. The neurosurgeon advised the now distraught parents that it would be better to let her go as she would remain in a vegetative state even if she continues to breathe. They were advised to make a decision with the rest of the family members. We left the ICU to meet up with their 2 elder sons. It was a very traumatic moment as she was their only daughter and sister, and she was only 17. After a short deliberation, they decided that the best decision for the daughter was to let her go. Sometimes we have to make painful decisions for those whom we dearly love. The pain was almost palpable when Alex informed the doctor of their decision. We stayed beside her to watch her last breath. 
The next day we proceeded with the final rites. She was cremated 2 days later.
Aneurysm is a silent illness linked to the weakness of the walls of the blood vessels. This could be hereditary or due to an acquired disease. I have personally encountered many cases of ruptured brain aneurysms involving both young and old. Many of them did not make it but one is still surviving healthily. It is important to note when a person collapses in a coma, the comatose person should be immediately sent for investigation such as MRI scans, CT scans etc. 2 of my friends had survived because the doctors responded immediately by investigation followed by surgical intervention to release the blood.
Sickness and death afflict both young and old. At times it comes without any warning. It would be wise for us to take precautions by paying attention to our health and planning for the financial implications of the cost of healthcare. As the saying goes "Prevention is better than cure". 
SCARY TALES 11 ... a series of true events...
Most of us would jump into a good investment opportunity. Opportunites do abound but some of them are too good to be true! 
A friend of mine shared an investment opportunity based on gold trading many years ago even before all the current craze. The projected returns was in the 20 percentile and it was supposed to be backed by physical gold. In order to convince me, my friend and his wife sunk most of their savings into this scheme. They were very confident as one of the directors of this company was a former boss of his wife. After much coersion, I relented and invested a few thousand ringgit. 
Initially, we received good interest every other month. Soon it dried off and we were given all sorts of excuses when we tried to recoup our capital. Slowly it became obvious we were not going to collect back anything. While I lost some money, my friend lost over half a million ringgit. This incident happened when I was yet to obtain my financial planning education and license.
There are many such schemes in the market that have come and gone, and many have lost large amounts of money. Many had squandered away their life-savings. Some had even resorted to taking their lives as they see no way to recover their hard earned savings. It pays to scrutinise any investment opportunities as many are based on very optimistic outlooks. ALL investments comes with attending risks. Many a times investors do not pay attention to such risks as geographical risk, political risk, technological risk, moral risk apart from all the other common attending risks. If an investment sounds too good to be true, it probably is!
The adage of not putting all your eggs in one basket holds true for all investment no matter how good the return is. Investors must realise and believe there will always be new opportunities. Rather than taking unnecessary risk, exercise patience and restraint instead of giving in to greed. Make sure your investment ringgit will "live to fight another day". 
"HAPPY INVESTING"...and may you not live one of those scary investment tales!
SCARY TALES 12 ... a series of true events...
We all look forward to a good holiday especially one that turns out smoothly. But not all holidays are trouble free. Occasionally one may experience flight delays, lost baggage, lost/stolen documents, injuries and a host of others. 
During one such trip to China during the winter months, we experienced a turbulent transit flight. We landed safely and waited for the return flight which was supposed to be a few hours away. About 2 hours in to waiting and after collecting our boarding pass, we were informed the flight will be delayed due to strong winds. Another hour later we were finally informed the flight was cancelled due to snow. The next flight out would be the following morning. Most of the passengers were unhappy but were unable to do anything as this was a weather condition which was beyond control. The airline informed us we would be provided with dinner and accommodation at a hotel nearby. But for those who had connecting flights in KL or meetings to attend the next day, it was a great inconvenience financially and timewise. The airlines would not compensate for such losses.
The next morning, we boarded the flight and landed in KL incident-free. As we have always practised never to leave home without travel insurance, we proceeded to organise the relevant documents and information before submitting the claims to the insurance company. Not too long after the submission, we received compensation sufficient for yet another trip. For those who take Travel PA lightly, they would have to bear the losses personally. Why take unnecessary risks when a comprehensive Travel PA is usually between 30 to 70 ringgit?! And best of all, you have peace of mind!
SCARY TALES 13 ... a series of true events...
Aileen was a forty something bachelor running her own consultancy business. Apart from her aged mother she did not have any other dependants. She was in the process of renovating her new office when she fell ill. After consulting a doctor and upon a detailed investigation, she was diagnosed with a brain tumour. She had to put her business plans on hold and focus on her treatment which included an operation followed by chemotherapy. Luckily she had close to half a million ringgit worth of critical illness policies. It was close to 2 years before she was healthy enough to re-start her business, by which time she had already almost used up all the insurance monies for treatment as well as to support her daily living expenses. 
Just as she was about to open for business at her newly renovated office, the tumour came back with a vengence! As her funds were by now depleted, she checked herself into a government hospital. Medication was expensive and she had to pay for them eventhough being treated in a government hospital. Soon she had to withdraw her EPF as well. Although we thought this would seriously affect her retirement when she recovers, but the cost of treatment had to come first. About half a year later she lost the battle. Her mother was left all alone. 
Life is unpredictable! Many of us would have responsibilities and financial obligations to ourselves and our dependants. Eventhough it may be a frightening exercise, we have no choice but to plan for the eventualities as best we can. As medical expenses are constantly escalating at a faster rate than household inflation, it can be a daunting exercise. According to AKPK, a large percentage of brankruptcy is due to medical reasons. And this is unlikely to improve in the near future. 
SCARY TALES 14 ... a series of true events...
Once I was requested by a friend to meet with his wife to advise her regarding a motor insurance claim. I drove to Seremban after work to meet the couple at their house. She related an incident which occurred earlier that day. She was driving at about 11am when she approached a cross-section. As she was engrossed in her thoughts, she was not aware the traffic light had changed to red. At the middle of the junction, she knocked into a motorcyclist coming from another direction. The motorcyclist was injured and had to be sent to the hospital. 
Normally, this would have involved a police report before filing a claim. But in this incident, my friend's wife had insisted on reporting it was her negligence that had caused the accident. She wanted to help the motorcyclist get compensation for the treatment as well as the injuries. My friend was appalled at the idea, thus, the reason for calling me!
While it is commendable that she wanted to take responsibility for her negligence, she cannot dictate the conditions of the Motor Insurance Contract. Even though motor insurance contracts include liability to third parties for bodily injuries or damage to properties, the conditions and quantum of compensation is subjected to the legal process. It is common for both the negligent as well as aggrieved parties to arrive at a fair compensation. The insurance company concerned also have a legal recourse to the amount of compensation. Insurance contracts are designed to be mindful of potential for moral hazards which can give rise to abuse. For example, in the event of an accident involving the household members of the driver or authorised driver, no compensation will be payable.
Most people do not read their contracts, especially motor and fire insurance contracts which are common place. When accidents occur, some may get a nasty awakening, arguing their ignorance of the contract or they may feel cheated. It is prudent to at least review or go through the contracts with the agents to avoid unpleasantness in the event of a claim. By understanding the contracts, we can ensure that the contracts will meet our needs.
Investments - The 3"D"'s
For a change, we are going to share some views and ideas relating to investments.
Since the nineties, investments throughout the world has become more and more volatile. The plethora of new investment products has caused the environment to be more complex and less predictable.  Investment scams are aplenty and coupled with the excessive noise in the market, investors may become apprehensive and unsure what and when to invest. It is in times like this that we should fall back on basics to guide us through this rough and uncertain waters.
We will start off with the 3D's of investments in 3 articles over the coming weeks. 
Diversification - Many investors would be familiar with this first "D". This is basically the principle of never putting all your eggs in one basket. Even more importantly, different sectors perform differently in different markets. For example, in the current oil price depressed market,  sectors relating to oil and gas will not perform well whereas manufacturing sectors may do better due to cost savings. 
One of the concept to diversify is by considering core and satellite investments. This will allow an investor to focus on primary investments which is usually less risky while not sacrificing the opportunity for higher return through a riskier satellite investment. The combined returns of this investment concept usually outperform a single block of investments. For better understanding, consult your financial adviser or investment coach to design or customise a portfolio that will meet your investment appetite.
Investments - The 3"D"'s - The 2nd "D"
Continuing from the last article on diversification, other types of investments can include properties, gold, collectibles and forex trading. These investments would usually involve large outlays and higher risks. It is best to consult professionals before investing. 
Discipline is the 2nd "D" to achieve a sound investment programme. While investments may be for the short or medium term, investing for retirement, children's education or wealth accumulation are generally long term, thus needing discipline to ensure success. Investing is not about going after the highest return. It is more about sticking to a worthwhile goal and attaining reasonable returns. 
Investments may not achieve the desired results when investors keep going after high returns without considering the risks and cost of switching. The wise adage "rolling stones gather no moss", is good advice as such investments may end up losing in the long run. As long as the risks and returns are reasonable to attain the desired outcome, discipline is the key component that will keep the investors on track.
No financial plan can achieve success without discipline. Long term investments require persistence and patience to produce good results. A regular contribution to investment is a disciplined way of investing which takes advantage of the concept of "Dollar Cost Averaging". By setting aside an amount of money regularly, investment becomes more manageable and the risk is reduced.
Investments - The 3"D"'s - The 3rd "D"
The final "D" is Deadline. No goal setting will be complete without a deadline.  As all investment plans should have an end goal, deadlines are necessary. Deadlines give a sense of purpose to the investment.
You can set different deadlines for different types of goals. Children's education funds would have pre-determined deadlines as it is age sensitive.  Retirement planning on the other hand has a more flexible deadline. Most people do not retire at 55 but in fact may delay to 65 or more depending on their career or profession. 
The choice of investments and the timing of switching is dependent on the objectives and the deadlines. Where the investment period is longer, riskier investments with potential high returns may be considered. In contrast, a shorter term investment may suffer adverse returns without opportunity to recover if riskier investments are employed.
Deadlines also ensure when the target is reached, you should exit the investment. Maintaining the investments beyond the deadline may result in losses should the investment turn south.  
Some pointers for this CNY...
During this coming festivities, many will be returning to their homes for the celebrations or taking advantage of the long holidays. We would like to share some points to ponder..
1.  While celebrating it would be prudent to watch your spending. Due to the current economic climate and an expected slowdown in 2016, maintaining a thrifty lifestyle would help alleviate some negative impact. 
2.   Watch your food intake. Avoid excessive bingeing, especially high sugar or fatty foods. High cholesterol food like prawns, lobsters, crabs, mutton etc should be taken in moderation. Remember, cost of medical treatment has also escalated significantly.
3.   Avoid excessive hard liquors or soft drinks. Both contribute to many lifestyle illnesses which can compromise your retirement years. You can still enjoy the festivities with a wholesome pot of chinese tea, fresh coconut juice, fresh fruit juices or chilled soya bean drinks.
4.   Make sure you are rested well before commencing the journey home. The current weather is making many people lethargic which is a potential hazard for accidents. Better to be safe than sorry. 
5.   This a good opportunity to spend time with family. The Chinese New Year was meant as a celebration to bring the families together as signified by the reunion dinner. Your family is your greatest asset!
The Chinese New Year is a coming of spring celebration representing growth and youthfulness. As such, it is also a good time to plan forward to maximize the opportunities 2016 may bring. Perhaps, it is also fitting to set some resolutions relating to our health and wealth. May everyone have healthy and prosperous Year of the Monkey!
You Don't Have To Buy Life Insurance....
Critical illness and hospitalisation insurance polcies are some of the common insurance policies purchased by many. The reasons for this is most of us will be stricken by illnesses, some critical ones, before death. As the incidence of illnesses increases, and people are beginning to fall seriously ill at a younger age, the expenses incurred for treatment is rising rapidly. This is also one of the causes of bankruptcy.
To overcome the need for insurance policies, one must stay healthy for as long as possible especially during the productive years. Therefore, it is important to watch our diets, get regular exercises, enough sleep and rest, reduce our stress and go for regular medical check-ups. By pre-empting the onset of illness we can avoid incurring massive medical bills. Nipping it in the bud can save us a lot of sufferring. 
Despite all the above precautions, many of us will not be able to escape illnesses completely. On top of that, some may even meet with accidents that require expensive medical treatment with long term care. The growing number of hospitals and medical centres are proof. Avoidance of illness is not always successful no matter how hard we try.
What then is the best way to provide a fund for treatment? How soon and how much can most of us set aside for this fund? How do we keep up with inflation rate of medical care?