I want to buy Term life insurance. Is buying insurance online better than buying from an agent? Any recommendation?  

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(@hazel)
New Member Customer
Joined: 1 year ago
Posts: 1
03/06/2018 3:19 pm  

I want to buy Term life insurance. Is buying insurance online better than buying from an agent? Any recommendation?


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(@admin)
Member Admin
Joined: 2 years ago
Posts: 20
04/06/2018 10:45 am  

Hello Hazel, 

Thank you for your question. It really depends, what advantages you are looking for and also how much you know about insurance. For Malaysia, if you are not familiar with insurance, we would generally recommend buying through an insurance agent or financial advisor. Here is why:

Online Term Life Insurance is still new to Malaysia

The online market in Malaysia is not developed yet, so there are not many insurance companies that sell Term Life insurance online. The most famous one are uforlife.com.my (Tokio Marine) and PruDirect from Prudential. Since Malaysia does not have a comparison webpage yet, you will need to manually compare those prices.  

Risk of making a mistake

When you buy you will be asked a few questions regarding your health, because the insurance companies want you to buy their insurance. However this is dangerous, because in the contract there is a clause known as "Duty of Disclosure". This means that you need to "disclose" or in other words inform the insurance company of any health problems that might be relevant to the term life insurance. If you are not familiar with insurance, you might miss out to mention something and the insurance company will deny your the payout of the policy. This is a huge problem, because you might be dead at that time and your remaining family does not know what you have disclosed. Here an example of the wording that Prudential has on the webpage

"If you are entering into a consumer insurance contract, you have a duty to take reasonable care not to make any misrepresentation to us when completing this application. Such duty of disclosure shall continue until the time a contract of insurance is entered into pursuant to this application. You would also have to take reasonable care to disclose to us any matter which may not be covered in this application that you know to be relevant to our decision on whether to accept the risk, and the rates and terms to be applied. "

If you have bought through an agent or advisor that person can make sure that everything is disclosed. Also, when your family knows the agent, the agent can also help with the claim. 

Online Term Life Insurance possibly not cheaper

When you buy online, we would expect that the insurance is cheaper, because you do not use the service of an agent. This might not be true. The insurance often times cost the same, because they need to pay for the IT system and advertisement. Here are some articles on your question from the web, but know they are about online term insurance in other countries.  

Hope it helps and explains, why it really depends on your level of knowledge on insurance if you should buy online or through an insurance agent/financial advisor. Let us know if you have more questions. 


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(@honest-attorney)
New Member Customer
Joined: 1 year ago
Posts: 1
05/06/2018 5:33 pm  

Hello Hazel or should I call you Luke (one and the same),

The piece was well orchestrated and your reply nicely written to drive customers to stay with Salesmen. 

For your information, Online sales is the revolutionary paradigm to impact the Insurance industry with BNM rolling out LIFE Framework Concept paper 2013. The Insurance landscape will undergo changes to integrate with Digital Era. Since 2016, with the Liberalisation of General Insurance, and in 2017 the liberalisation of Term Life Insurance and the Pure Protection Plans, in 2018 liberalisation of Critical Illness Plans, culminating in 2019 of full liberalisation.

Under BNM's Fintech Sandbox, the Direct Distribution Channel would see most Insurer engaging either their own or third part Online Platform to sell insurance. The details and approval from BNM would see to it that the Online sales are made simple, legal, professional, customers' friendly and with ZERO COMMISSION. Customers are also provided the liberty to compare choose the best plans to tailor suit themselves from one single portal.

There are no advertisement fees and no IT charges involved in the operation of such sites.

Nonetheless, perhaps Luke has better insider infomation as to the reason to retain 85,000 insurance agents, of which more than half are part-timers and non-compliant agents. 

 

 

 

 


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(@admin)
Member Admin
Joined: 2 years ago
Posts: 20
08/06/2018 6:44 pm  

Thank you for the constructive feedback. I agree with you that Online Sales will change the way insurance is sold in Malaysia. Today, already many Malaysians have started to buy car insurance online. We have made an overview of the insurance companies that sell car insurance online.

We have not made a guide of the Malaysian insurance companies that sell Term Life insurance online. May be this is something we can write next. 

Have you seen of any comparison webpage? I see that iMoney, Ringgitplus, Fatberry and Gobear are all working on a price comparison platform. I have not seen it really working yet. 


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(@muhammadyazed)
Trusted Member Agent
Joined: 2 years ago
Posts: 93
18/06/2018 12:56 pm  

When want to join Term Life Insurance, we must know what it cover.

Normal plan should cover :

1. Death

2. TPD

3. Critical Illnesses.

Then, how many coverage needed?

Simple formula, most of financial adviser suggest : 

Salary x 12 months x 10 years = for Death & TPD

Salary x 12 months x 5 years = for Critical Illnesses 

Why 10 years of salary for death & TPD? The reason is, so that the coverage can replace the income of the policyholder for 10 years. So there is a 10 year period in the event of death or paralysis of the holder's policy, for him / her and / or the family to receive income lost due to death or paralysis.

Why 5 years of salary for Critical Illnesses? The reason is normally percentage of surviving after 5 years is low. Nevertheless, is up to participant to calculate their own coverage.

Then, u should know how long the policy is cover. 100 years? 80 years?

The premium are affected by coverage value and term cover. Also include your profession too. High risk profession means high premium, but it is up to underwriter to decide.

Those are my piece of advice. You know those tips, you know which company give best coverage, you know you purchasing power, then you can decide it.

Muhammad
VMC Membership Takaful Advisor
http://vmcvip.wasap.my/


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(@myeliteagency)
Trusted Member Agent
Joined: 2 years ago
Posts: 58
23/08/2018 4:50 pm  

Hi, Sorry for coming late. Guess you have already get covered by now. Is advisable to buy from agents so that agents can give you the best advice. Unless you are very sure about what is term Insurance. Cheers!

Adeline


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