Investment Linked

                                               



An investment-linked insurance plan is a life insurance that combines investment and protection. Your premiums provide not only a life insurance cover, but part of the premiums will also be invested in specific investment funds of your choice. You get to choose how to allocate your insurance premiums towards protection and investment.
 

You want the flexibility to choose your own level of protection and investment.

You wish to vary the amount of your premium payments or coverage based on your own personal financial situation.

You have the flexibility to choose the type of funds based on your risk aptitude.

You want a savings plan to maintain your standard of living after retirement.


When it comes to picking the right plan, always:

Consider the amount you wish or can invest in the plan, either in single or regular-premium plans.

Remember to also consider the types of funds and the level of protection you need.

Evaluate your options carefully to find the right plan with the right fund to suit your needs.


Single-premium plan

 A single premium-plan features a single lump-sum premium payment, so you don’t have to worry about making regular premium payments, and worrying about lapsing.
 
Features a life insurance policy with a death or total permanent disability cover of around 125% of your lump-sum investment.
 
Benefit payments will be to the sum assured or the value of the investment units at the time of claim, whichever is higher.
 
Allows you to immediately invest more to generate returns.


Regular-premium plan

The regular-premium plan is a more suitable plan for you if you don’t want to invest a large sum at the start of the plan.
 
Gives you the flexibility to increase your premiums and coverage when your finances improve in the future which are paid either monthly, quarterly, semi-annually or annually.
 
The basic insurance coverage, in the event of death or total permanent disability, is usually a multiple of the annual premium.
 
The benefit payment will be the total of sum assured plus the value of the investment units.

 

Investment-linked plans, like other types of investments, are exposed to investment risk. The unit price of an investment fund (managed by the insurance company) is linked to the total value of the plan, which fluctuates with the movements in the unit price. You may realise a gain or loss when you sell your units, and may even get less than what you invested. Past-performance of an investment-linked fund's track record is only a guide to future performance.

Choices of investment

As you can see on top there is a investment pyramid that show you risk and period of each investment type that can help you in choosing the types of investment that you would like to invest in. The one that has the biggest area in the pyramid is capital preservation that has the lowest risk and period of less that one year. On the other hand, the smallest area of the pyramid shows the capital growth that has the highest risk and the longest period of time.

The tables above shows  us the basic investment that can give you ample of information and this works without you paying a lot. Though the interest paid is very low but the risk is quite low compare to the other investment such as stocks exchange and so on.

Glossary to Insurance words

Indemnity Putting
 the policy holder to the same financial position immediately before a loss by payment, repair or replacement.

Insurable interest 
A basic rule of insurance requiring the person buying insurance to have an insurable interest in the subject matter to be insured or life of the insured in that the loss or damage to the subject matter or any misfortune which occurs to the insured would result in a financial loss to the policy holder. In takaful, this requirement is called permissible takaful interest.

Material fact
 Any matter that is relevant to the decision of the insurance company/ takaful operator on whether to accept the risk concerned and the rates and terms to be applied.

Utmost good faith
A requirement on the person buying an insurance or takaful product to state all relevant details in the application form to the insurance company/ takaful operator to allow the insurance company/ takaful operator to consider his application fairly.

Facts bout insurance

What is a material fact?

A material fact is any fact relating to you or the object to be covered that the insurance company/ takaful operator should know so that it can make a decision on whether it should grant you the cover, the amount of premiums you need to pay and the terms to be applied. The insurance company/ takaful operator will normally get these facts from the application form. As such, if you are not sure of any questions in the application form, you should get an explanation and not guess or leave the item blank. In life insurance/ family takaful, facts commonly deemed as material include occupation, financial status, family medical history, state of health and lifestyle.

Paying premium/ contribution 

When you pay your premium/ contribution, make sure that your cheque is issued to your insurance company/ takaful operator if you pay through an agent. Otherwise, try to pay your premium directly to the insurance company/ takaful operator. There are many ways you can pay your premium/ contributions such as autodebit from your bank account, via Internet banking, credit card and using telephone banking. You should ask for a receipt for the premiums/ contributions paid and contact your insurance company/ takaful operator if you have not received the policy within one month after the purchase.

Principles of insurance

Insurance/ takaful principles

 Your insurance and takaful products are subject to four main principles which are observed universally, that is, insurable interest/ permissible takaful interest, utmost good faith, indemnity and contribution. To get an insurance protection, you need to have an insurable interest in the item or life to be insured. Insurable interest is normally present by way of relationship or ownership. For example, a person will have insurable interest in his own or child’s life, house or motor vehicle. On the same basis, in takaful, you need to have permissible takaful interest before you can join a takaful scheme. An insurance/ takaful plan without insurable interest/ permissible takaful interest is like a gambling contract where the purpose of having insurance/ takaful is to profit from it. Utmost good faith means you need to state all the material facts when you are buying a policy or joining a takaful scheme. The purpose is to allow your insurance company/ takaful operator to decide whether it should provide the insurance or the takaful cover to you, and the amount of premium or takaful contribution that it should collect from you. 7 If you do not observe this requirement, your insurance policy/ takaful certificate can become invalid and your insurance company/ takaful operator can refuse to pay a claim made by you. Indemnity and contribution only apply to insurance/ takaful taken on your belongings. When you incur a loss, the rule of indemnity will only allow you to get an amount that will return you to the position you were in before the loss. Under the contribution rule, all insurance companies/ takaful operators providing cover to a property will share in the damages of the said property. In this way, a person cannot “profit” by having more than one policy or takaful plan on the same item.

Shop around

 It pays to shop around for a plan that meets your needs. You can compare premiums, terms and details of exactly what is covered in the plan and what is excluded. Different policies may have different terms and conditions, rates and exclusion clauses. Get an explanation if you do not understand any term so that you are fully aware of what you are getting into.

Insurance guideline

Introduction
 This is a guide to help you understand the fundamentals of insurance and takaful. It tells you about the types of insurance and takaful products available and the basic principles of insurance and takaful.

 What is insurance?
 You buy insurance to transfer the risk of loss to the insurance company and thereby reduce your financial hardship when you suffer the loss. For example, if your insured motor vehicle is involved in an accident, your insurance company will pay for the cost of repair. You buy insurance by paying a premium to your insurance company.

 What is takaful?
 Takaful is an insurance scheme based on Islamic principles of joint guarantee, where a group of participants agrees to mutually guarantee among themselves against a defined loss. If you join a takaful scheme, you agree to donate a certain portion of the contribution into a takaful fund to assist any member of the fund who has suffered any defined loss. Depending on the terms of the takaful certificate, a participant may also be able to share in the surplus of a takaful fund if he has not made a claim during the period of takaful. Anyone can join a takaful scheme regardless of his religious beliefs.

Why buy insurance or join a takaful scheme?
 The purpose of having insurance/ takaful is to reduce your financial burden when you suffer from losses or mishap so that there is minimal disruption to you and your family’s daily activities. However, an insurance/ takaful plan only covers you for losses specified in the plan. Therefore, if you are getting any insurance/ takaful, make sure it covers the losses you need to protect.

What type of insurance/ takaful products do I need?
 Your insurance/ takaful needs depend on your personal situation, age and lifestyle. However, certain types of insurance/ takaful are required by law, e.g. if you own a motor vehicle, the law requires you to have a cover to pay for liability caused by you to others

What are the types of insurance/ takaful products available?
 You can get different types of insurance/ takaful to cover things you own, your life, your health and for your retirement. You can find many types of products that can meet your needs. The common types of insurance/ takaful products are:

LIFE INSURANCE FAMILY TAKAFUL which is usually used as a means to provide financial aid for your dependants if you die. You may also save or invest through life insurance/ family takaful. Some life insurance/ family takaful products also pay out when you are unable to work due to illness or disability. Examples of life insurance/ takaful products are whole life/endowment, ordinary family and investment-linked

MOTOR INSURANCE TAKAFUL which pays for specific losses due to damage to your motor vehicle involved in an accident. It also pays for losses that your motor vehicle caused to others in an accident.

HOUSEOWNER HOUSEHOLDER INSURANCE/TAKAFUL which pays for specific losses when your home or your personal assets are damaged due to events like fire, flood, burst pipes, etc. You may also get protection against claims made by third parties arising from these events.

MEDICAL AND HEALTH INSURANCE TAKAFUL which pays for various types of hospitalisation and medical expenses that you may incur if you become ill or injured. These include payments for hospital room and board, professional fees, medical supplies and medical services

PERSONAL ACCIDENT INSURANCE TAKAFUL which pays a sum of money if you become disabled due to an accident or if you die

Importance of insurance

As we all know, on June 4th 2015 there was a major earthquake hit the least expected place on earth that is Sabah. No one could possibly expected this to happen there and there are quite number of deaths. Some people who have saved up so money in their account could survive for a little while till help comes, but what about the rest what can they do? This is why there is insurance policy to help in natural disasters and many more.

Some of us might think that this insurace policies are expensive, well thats a false information. Not all insurance policy are expensive some of it are really cheap with monthly installment or yearly installment. There are various types of insurance provided by financial company and insurance company and this might help when emergency comes. Just like the natural disaster that just happen a few days ago could save some people with insurance.

Savings tips from Expert

Five facts everyone should know

Before we get to the nitty-gritty, if you only remember five things about this, make it these:

1. 
   Every UK-REGULATED account gets £85,000 protection
   All UK-regulated current or savings accounts and cash ISAs in banks, building societies and credit unions are covered by the Government-backed Financial Services Compensation Scheme (FSCS). So if the bank fails, you'd get back up to £85,000 per person, per financial institution. The majority should get it within seven days.
2. Not all UK savings are UK-regulated
   Most banks, including foreign-owned ones such as Spain's Santander, are UK-regulated. Yet a few EU-owned banks opt for a 'passport scheme' where you rely on protection primarily from their HOME government.
   This includes Triodos etc. See the foreign banks list for full details.
3. The amount's double in joint accounts
   Cash in joint accounts counts as half each, so together you've £170,000 protection.
   If you've an individual account with the same bank, half the joint savings count for your total exposure, and any amount over £85,000 isn't protected.For more info, see the joint accounts protection below.
4. An institution is NOT the same as a bank
   The protection's per institution, not account. So four accounts with one bank still only get £85,000. The definition of 'institution' depends on a bank's licence and giant banking conglomerates make it complex.
   For example, sister banks Halifax and Bank of Scotland's accounts are only covered up to £85k combined. RBS and NatWest are also sisters, but their £85k limits are SEPARATE. See the What Counts As A Bank? tool below.
5. Spread savings to keep 'em safe
   For perfect safety, save no more than £83,000 per institution (the extra £2,000 gives room for interest). Spreading can be worth it even if you've under £85,000; if your bank went bust, the money could be inaccessible for a spell. Using two accounts mitigates the risk.
   For a full list of top accounts, see our Best Buy Savings guide. Or for how to save safely, including dealing with very big amounts, see 100% Safety below.

9 Reason to protect your finance

Do Your Taxes Early and File for Free or at a Very Low Cost to Get Your Refund.
Did you know that the Earned Income Tax Credit (EITC) refund may be the single largest check that many families receive all year?  If you make $57,000 or less you qualify to file your taxes for free or low cost.  You can prepare your own taxes for free online, you can have them prepared for you at a free tax prep site (a Volunteer Income Tax Assistance (VITA) site), or you can have your taxes prepared at participating H&R Block sites for $29 if you use the City’s coupon. For more information about these tax filing options, including sites and requirements, call 311 and ask for tax preparation assistance or visit nyc.gov/taxprep

Save for the Unexpected … Even Just a Little.
Unexpected emergencies like health problems or job loss can jeopardize a tight budget. Resolve to start saving on a regular basis in 2012, even just a small amount. Try an automatic savings plan that helps you effortlessly save every payday using direct deposit or automated transfers.  The City’s SaveUSA program, which is available at select Volunteer Income Tax Assistance (VITA) sites, can help you get started saving by depositing your tax refund in a bank account in a participating bank.  If you sign up, you could be selected to receive 50 cents for every dollar of your refund up to $500 if you save it for a full year.  Visit nyc.gov/SaveUSA or call 311 for more information.

Find Easy Ways to Cut Down on Your Expenses.
The start of the new year is a great time to cut out those unnoticed expenses that really add up. Did you know the cup of coffee that you buy on your way to work can cost you $800 a year? Buying a $10 lunch, five days a week, means that in a year you’re spending $2,600. In 2012, you can brew your own coffee; make lunch and take it with you; open a safe banking account (nyc.gov/safestart) and withdraw money only from ATMs at your bank ... and watch your savings grow!

Make a Plan to Pay Down Your Debt.
One of the best ways to take control of your finances and start to pay down your debt in 2012 is to get professional financial counseling. The City’s more than 20 Financial Empowerment Centers offer FREE, one-on-one, professional financial counseling in multiple languages. Counselors can help you negotiate with creditors and debt collectors, consolidate payments, or create a payment plan and a 2012 budget.  Visit nyc.gov/ProtectYourMoney or call 311 and ask for a Financial Empowerment Center near you.

Check Your Credit Report and Protect Your Identity.
Make it a New Year’s resolution to safeguard your personal information. Start the new year by checking your credit report and clearing up any inaccuracies. Throughout the year, be sure to shred all documents with personal information like account numbers and Social Security information to avoid becoming a victim of identity theft. If you’ve been a victim of identity theft, place an alert on your credit report, file a police report, and file a complaint with the Federal Trade Commission.

Open a Safe Bank Account.
If you don’t have a bank account, start the new year by opening one that’s safe and right for your needs. Safe and affordable banking does exist. All New Yorkers can open an NYC SafeStart Account—the City’s FREE bank account with an ATM card, no overdraft fees, and no monthly fees if you have a minimum balance of only $25 or in some cases even less. Call 311 and ask about the NYC SafeStart Account.

Don’t Let Debt Collectors Push You Around.
Protect yourself in 2012: Debt collectors must be licensed by the Department of Consumer Affairs (DCA), provide you with proof of debts, and cannot harass you even if you do owe money. If you are contacted by a debt collector, check immediately if the business is licensed and demand proof of the debt in writing. To check a business’s license status or to file a complaint, visit nyc.gov/consumers or call 311.

Claim Every Public Benefit for Which You Qualify.
Make 2012 the year you find out what programs and services are available that can earn or save you money. Visit nyc.gov/accessnyc to identify whether you qualify for benefits, including Food Stamps and child care assistance, health insurance, housing or employment, and much more. Ask your employer about pre-tax transit and medical cost programs, and college and retirement savings programs. At Tax Time, use the City’s network of FREE tax preparation services and get all the refund-boosting tax credits you deserve.

Shop Smart.
If something sounds too good to be true, it probably isn’t true. If you’re considering debt consolidation, debt settlement, or mortgage loan modification or using an employment agency, do not pay fees before you receive services. Get contracts that are clearly written, make sure you understand them before signing, and keep all receipts from your transactions. Looking to fix up your home? Get quotes, shop around, and get references before making your choice, and check with DCA to find out if the home improvement contractor you’re considering is licensed. Looking to buy a second hand car? DCA licenses and inspects second hand auto dealers. Check to see if a dealer is licensed by visiting nyc.gov/consumers and check a dealers’ complaint histories by calling 311.

 

Investment

DEFINITIONS
Investment is the action of placing funds for a period to obtain the required rate of return, with fully aware of the risks involved. The thing to remember though is that the rate of return can be expected, it is not guaranteed.

There are several different types of investments in Malaysia

Fixed Deposit Account / Investment Accounts
- Investing in bank / financial institution.
- Investment without risk.
- The advantages are low.
- Saving for a specific period.
Pros:
1. Return and equipment.
2. Secure Storage.
3. Savings may be issued upon request.

Real Estate-like land purchase, shop / office, home, farm and so on.
- Receive returns in the form of capital gains and current income.

Stock
-Investment Made by Company. Limited to get a return in the form of dividends or bonus.
- Interest Company Limited issued shares is to raise capital for developing the company.
- 2 types:
~ Share listed.- company shares traded on the stock market.
~ Shares are not listed. - Shares that are not traded on the stock market
formally.

A trust- unit investment that pools money from many people.
- Operated by professional managers.
- Suitable for small investors.
- The risk of loss is low.
- Investment Trust Unit consists of Trust, the Trust property and Gilts.

BASIC GUIDELINES FOR INVESTMENT.
1.Pelabur need to get complete information about the investment field who wish to undertake.
2. Ensure maximum benefits can be obtained either through interest rates, dividends and capital gain.
3.Mengambilkira risk in investment. If investors are less skilled, can invest in low risk investments and vice versa.
4.Modal available. If an investor invests in small-cap suitable low-risk investments such as the Unit Trust or the bank.
5. Liquidity is an easily convertible assets icing cash. Example: liquid assets - bank deposits. highly liquid assets - property.

Savings

DEFINITIONS

Savings are saving a fraction of the income of spent.
Savings can be made in various ways to ensure safe and secure. Usually we can save in formal institutions such as banks, trust units and special funds introduced by the government such as ASB, the Fund and the Fund Haji .In addition, we can also keep in the house.

We can choose to save the money that has high returns or profits. However, high returns necessarily have a higher risk compared to low returns that have a low risk. Risk refers to losses resulting from savings .So, the government has introduced the ASB, ASW and security that can be said is almost no risk can be used as a safe investment. For most people, these reserves are used on hard times who never expected by a person or additional expenses. No exaggeration to say that the soul catharsis and resolution of the debt overhang.


BENEFITS OF SAVINGS




~ As an emergency fund
~ As a fund to buy assets such as houses and cars
~ In preparation for marriage for those who have married
~ As a preparation for Old Age
~ Evade themselves from the burden of debt problems
~ Helping you make the investment
~ Adding financial and improve quality of life

Financial protection info

Each user requires peace of mind knowing that their savings in the bank is safe. Provide deposit insurance protection guarantees. In addition, users can now be relieved to know that the takaful and insurance benefits they are also protected by the Deposit Insurance Corporation of Malaysia (PIDM). PIDM is a government agency established in 2005 to protect depositors who have deposits in banks as well as owners of takaful certificates and insurance policies in the event of a member institution failure.

Protection for deposit insurance

PIDM protects your deposits up to RM250,000 per depositor per member bank. Eligible deposits are insured by PIDM savings accounts, current accounts, fixed deposits, foreign currency deposits, as well as accounts of sole proprietorships, partnerships, professional practices and companies. Moreover, conventional and Islamic deposit accounts also separately protected up to RM250,000 per depositor per member bank. RM250,000 limit includes both the principal amount of the deposit and the interest / return.

Separately protected account

Joint Accounts: Accounts with deposit insurance coverage separately, provided that a member bank records indicate the name of the joint account holders. However, the maximum coverage of joint accounts is not RM250,000 and RM250,000 collectively for each account holder.

Trust Accounts: For trust accounts, beneficiaries can receive coverage separately if the trustees to submit each beneficiary and the amount of interest that is subject to each beneficiary in the records of the member banks. Each beneficiary separately protected up to RM250,000 from deposit accounts are insured for their other types.

Account of a sole proprietorship, partnership or Professional Practice and Company: proper accounts also separately protected up to RM250,000.

Types of products that are NOT eligible for deposit insurance coverage, such as deposits not payable in Malaysia, negotiable instruments of deposit, other bearer deposits, unit trusts, stocks and shares and product or gold-related investment accounts.

PIDM member banks are all commercial banks licensed under the Banking and Financial Institutions Act 1989 and all Islamic banks licensed under the Islamic Banking Act 1983, including foreign banks operating in Malaysia. Membership is mandatory in accordance with the provisions of the Malaysia Deposit Insurance Corporation Act (MDIC Act). Please note this membership sign at all entrances to your member bank branch.

If you have savings deposits in different branches of a bank members, the amount eligible to be covered will be aggregated for purposes of deposit insurance coverage.

Residence or nationality does not affect deposit insurance coverage. Deposits placed in member banks PIDM will be protected up to RM250,000 per depositor per member bank.

In the event of a bank failure, you do not need to submit a claim. PIDM will make an announcement to inform about the repayment of deposits covered. Refund of deposit will be made based on records obtained from the depositary bank experts.

Source: Malaysia Deposit Insurance Corporation (PIDM)

Is this not a great news ?

No GST for life insurance

FMT Reporters

 | March 9, 2015

While the premiums are exempted from GST, the fee and charges imposed on these policies will be subject to GST.

KUALA LUMPUR: Life insurance is not subject to the 6% Goods and Services Tax (GST), Life Insurance Association of Malaysia (LIAM) said.

This also includes endowment insurance, child insurance, term insurance (including mortgage insurance) and education insurance.

“While premiums for investment-linked policies will not be subjected to GST, the fees and charges imposed on these policies such as policy fee will be subject to GST,” the association said in statement.

“Similarly the premium for non-life riders such as critical illness, medical, health, and personal accident will be subject to GST. As a guide, non-life riders are defined as riders which do not cover natural death.”

Policyholders who have bought non-life riders before April 1, will be required to pay GST on the applicable portion of insurance premium/fee/charges for insurance coverage from April 1 onwards.

Insurance companies under LIAM have already notified their policyholders that GST is applicable on non-life insurance and fees on the company’s website and through annual notices.

LIAM also advised all policyholders to contact their respective insurance companies to find out the amount of GST that they will have to pay for their medical and health, critical illness and personal accident policies that are due from April 1 onwards.

For policies paid through direct debit facilities, insurance companies will work with banks to increase the authorisation limit accordingly to include GST.

Alliance safe protection.

 Alliance Safe Assure

Alliance Safe Assure underwritten by Multi Purpose Insurance Berhad provides protection on properties kept in our safe deposit box against burglary and robbery.  Additional protection may be added to protect against flood and riot, strike and malicious damage. Sign up now to safeguard your possessions and have a peace of mind. BENEFITS OF ALLIANCE SAFE ASSURE There are 2 different types of coverage available: Option A: Burglary and/or Robbery only Option B: Burglary and/or Robbery cover with extension for Flood and Riot, Strike and Malicious Damage (RSMD) 5 plans to choose from to ensure flexibility in the value of coverage. Premium is as low as RM 18 per annum

NEXT STEPS Online Get the Alliance Safe Assure plan today! Fill in this Product Enquiry form and our Authorised Bank Officer will contact you. By Phone or Face to Face We'd like to hear from you! Give us a call at 03-5516 9988 or visit us at the nearest Alliance Bank branch..

From PIDM

MANDATE

Perbadanan Insurans Deposit Malaysia (PIDM) is a Government agency established in 2005 under Akta Perbadanan Insurans Deposit Malaysia (Akta PIDM).

Our role under Akta PIDM is to administer the Deposit Insurance System (DIS) and the Takaful and Insurance Benefits Protection System (TIPS) to protect depositors and owners of takaful certificates and insurance policies in the event of a member institution failure.

PIDM is also mandated to provide incentives for sound risk management in the financial system, as well as promote and contribute to the stability of the financial system.

What protection does PIDM provide?

 

Deposit Insurance System (DIS)	Takaful and Insurance Benefits Protection System (TIPS)
Protects depositors against the loss of their insured deposits placed with member banks, in the unlikely event of a member bank failure.	Protects owners of takaful certificates and insurance policies from the loss of their eligible takaful or insurance benefits, in the unlikely event of an insurer member failure.

 

OUR MANDATE

PIDM’s mandate is set out in Akta Perbadanan Insurans Deposit Malaysia. Its objects are to:

 

• administer a deposit insurance system and a takaful and insurance benefits protection System;
• provide insurance against the loss of part or all deposits for which a deposit-taking member is liable and provide protection against the loss of part or all of takaful or insurance benefits for which an insurer member is liable;1
• provide incentives for sound risk management in the financial system; and
• promote or contribute to the stability of the financial system.2

In achieving its objects under paragraphs (1) and (2), the Corporation shall act in such manner as to minimise costs to the financial system.

 

OUR VISION

To be a best practice financial consumer protection authority

OUR MISSION

We strive to promote and contribute to public confidence in the stability of the nation’s financial system by:

• protecting Islamic and conventional deposits;
• protecting takaful and insurance benefits; and
• fulfilling our financial consumer protection mandate in an effective and efficient manner, having regard to the interests of our key stakeholders and our employees.

 

OUR CORPORATE VALUES

• Financial Stewardship
• Excellence and Professionalism
• Respect and Fairness
• Integrity and Trustworthiness
• Communications and Teamwork

 

OUR CORPORATE OBJECTIVES

• Educated and informed stakeholders
• Effective partnerships
• Well-governed and well-managed organisation
• Robust risk assessment, monitoring and resolution capability
• Sound business and financial practices
• Competent and knowledgeable workforce
• Conducive corporate environment

Here are some important tips about financial protection.

Why Do I Need Life Insurance?

The main purpose of life insurance is for  protection against the adverse financial consequences of untimely death of the breadwinner.

In actual sense, you won’t be the one needing life insurance – it’s your family and loved ones that need it more than you do. Life insurance is meant to replace your income for your dependents – your children, spouse, parents, siblings or anyone who will be financially affected by your untimely demise. In a way, it’s no longer an option but a necessity in this modern society.

What If I Do Not Have Any Income To Replace?

If you are a stay-at-home mom/ dad or currently not earning an income, there is technically nothing to replace. However, do not forget about the implicit value of a stay-at-home mom/ dad. If you’re not around to take care of your kids and your home, additional expenses have to be incurred to make other arrangements. Therefore, you cannot claim that there is no income to be replaced. In fact, the surviving breadwinner’s income may be affected as he/ she may have to take some time off to put everything in order.

If you’re currently not earning an income, it does not mean that you won’t be earning an income in the future. There is always your income earning potential which can be protected. Remember that you should get yourself covered when you think you don’t need it – when you do need it, it’ll often be too late!

Are Life Insurance Benefits Only Payable Upon Death?

Apart from death coverage, Life Insurance generally extends to cover Total and Permanent Disability. In the event that you’re certified by a registered medical practitioner of such condition, you’d be advanced the sum assured amount, subject to certain limits.

How About Death Coverage Due to an Accident?

Yes, your Life Insurance policy also covers accidental death. In fact, it covers death from any causes. It also extends to cover the case of Total and Permanent Disability due to an accident. This benefit is payable in addition to any other Personal Accident policies that you may have.

How About Death Coverage Due to Suicide?

There is a Suicide Clause within your policy that states: “The death of the Life Assured by Suicide, while sane or insane, within one year from the date of issue of the policy or from the date of any reinstatement, whichever is later, will render the policy void.” This means after that said one year period, death by Suicide is also covered.

What Are The Other Uses Of Life Insurance?

Apart from the reasons mentioned earlier, Life Insurance also serves the following purposes:

1. To Pay for Final Expenses

Nothing in this world is free – even when we leave, there’s an “exit fee”! These fees include probate and other estate administration costs, debts and medical expenses not covered by your Health Insurance policy. Life insurance may come in very handy to defray some of these costs and ensure that the family has sufficient liquidity to carry on with their lives uninterrupted.

2. To Create an Inheritance

While most of us are struggling just to survive, the question of leaving behind something for our loved ones seldom crosses our minds. Life Insurance is one of the most cost-efficient ways of creating an inheritance for your loved ones with whatever little that you may have. You only need to determine how much you can comfortably set aside as your premiums and decide who you wish to name as a nominee in your life insurance policy. Life insurance may be the only financial instrument whereby you pay discounted Ringgits to create a sizeable inheritance. What it means here is that with a small amount of premium, you can obtain quite a large sum of coverage, depending on your age and type of products. An added advantage is that such proceeds are exempted from tax.

Apart from that, life insurance may also be used to make a charitable contribution towards your favourite charity. By utilising a life insurance policy, you can actually make a much larger contribution than if you donated the cash equivalent of the policy’s premiums.

3. To Create a Source of Savings

Life insurance may act as a form of “forced savings”, especially for those who find it challenging to save. Most life insurance plans comes with some form of cash values which you may cash out at some point or borrow against it. This serves as another reservoir of funds for emergency purposes or perhaps, for your children’s education or your own retirement. However, the main purposes of having Life Insurance are Wealth Protection and Accumulation tool. It is not a substitute for your other savings/ investment programme but merely complements them.

In conclusion, there is really no other financial instrument in the market that can serve the same purpose as Life Insurance. When we look at the Purpose behind the purpose, we discover that it is indeed a marvelous instrument to protect the livelihood of our loved ones.

From Manulife

http://www.manulife.com.my/life/Documents/ManuLink%20Shield_Full_280115.pdf

1. This is an insurance product that is tied to the performance of the underlying assets, and is not a pure investment product such as unit trusts. 2. You should satisfy yourself that this plan and the rider will best serve your needs and that the premium payable under the policy contract is an amount you can afford. 3. Please note that a life insurance policy is a long-term commitment and as such it is not advisable to hold the policy for a short period of time in view of the high initial cost. 4. Please also be aware that you may deplete the Investment-Linked funds’ units when purchasing too many unit deducting riders. 5. You are given a “Free-Look Period” of fi fteen (15) calendar days to review the suitability of your newly purchased insurance plan from the receipt date of the policy contract. If you return the policy contract to Manulife Insurance Berhad (MIB) during this period, the unallocated premiums (if any), value of units that have been allocated (if any) at unit price at the next valuation date as well as any fees and charges excluding the Fund Management Charge that have been deducted, less any medical expenses which may have been incurred will be refunded to you and this Policy shall be cancelled. 6. Purchase of new units and sale of units will be at the Net Asset Value (NAV). Net Asset Value is the single price at which the policyowner buys and sells the units. 7. Valuation of the underlying assets of the Investment-Linked funds is on every business day basis. Transactions are carried out on a forward pricing basis, which means that all transactions carried out today will be based on the unit prices determined at the next valuation date and not the price currently available. 8. The value of the funds shall equal to the fair market value of all the funds assets at the close of the business day immediately preceding the Valuation Date, less funds liabilities, and less fund management charge. 9. Investment returns are not guaranteed as unit prices may go down as well as up. These investment risks are borne solely by the policy owners. Past performance of the funds is no indication of future performances. 10. In the event of exceptional circumstances, such as high volume of sales of investment in a short period of time, MIB reserves the right to defer or suspend the issuance or redemption of units. 11. In the fi rst 2 policy years the Company will allow a period of 3 months from the due date for the payment of each premium. If all premiums due remains unpaid at the end of the 3 months, the policy shall automatically be surrendered for its Account Value, if any. The Account Value in IPA shall be subject to Full Surrender Charge. From the third (3rd) Policy Year onwards, if any premium remains unpaid at the end of the Grace Period of 1 month, and if the policy has Account Value, the Company shall administer the policy on the basis of the premium holiday benefi t, otherwise the policy shall automatically be terminated. 12. This brochure is for general information only and is not to be construed as a contract of insurance and no consideration has been given to the particular circumstances or needs of any person. The precise terms, conditions, exclusions and defi nitions of this plan are specifi ed in the policy contract issued by MIB. Terms and conditions apply. 13. The premium and/or policy charges, whichever applicable, may be subject to Goods and Services Tax (GST) and any other taxes that may be introduced by the Government of Malaysia from time to time, at the prevailing rate. MIB reserves the right to collect from you an amount equivalent to the taxes payable for the premium and/or policy charges, whichever applicable. If your policy period spans over the effective date of the GST, the amount collected on GST will be on pro-rated basis. Your obligation to pay GST and other applicable taxes shall form part of the Terms and Conditions in your insurance policy. 14. In the event of any discrepancy between the English, Bahasa Malaysia and Chinese versions, the English version shall prevail. 15. This plan is underwritten by Manulife Insurance Berhad (814942-M), a company licensed under the Financial Services Act 2013 and regulated by Bank Negara Malaysia. It is located at 16th fl oor, Menara Manulife, 6, Jalan Gelenggang, Damansara Heights, 50490 Kuala Lumpur.

5 simple ways to choose a investment protection

Five simple steps to choosing an investment-linked plan

Step 1: Determine your savings reserve
This is the money you set aside for day-to-day expenses and for emergency purposes.

Step 2: Identify your investable assets
Your investable assets = Your total assets less your savings reserve.

Step 3: Identify your risk profile
What is your risk appetite? Are you the type to play it safe, or to take your chances? Complete our Risk Profiler to find out.

Step 4: Determine your investment objectives and horizon
When would you need your capital back should you invest it today? This will affect the types of funds you invest in.

Step 5: Build your portfolio
We have developed an investment portfolio that caters to 3 different investment horizons of 5, 8 and 12 years. These portfolios have been put together to help optimise your returns according to your risk appetite and investment horizon.

Investment Protection by Maybank2u

It takes money to achieve many of life's goals—whether we want to own a house, to retire comfortably or to provide a good education for our children. The only practical way to make sure we can achieve our goals is to have a financial plan, with specific strategies to meet specific objectives.

Let's start by sorting out the objectives into short, medium and long term. Some examples and typical strategies for achieving the objectives are given below:

Duration	Short term	Medium term	Long term	Protection objectives
Objectives	Holiday, car	House, children's education	Retirement	Asset protection (e.g. car, home), income protection
Financial strategies	Keep your assets liquid so that you have the cash needed for down-payment or full purchase	Invest more aggressively, to earn better returns in the medium term	Invest aggressively while you are young, then move into safer assets as you approach retirement	Buy insurance policies to complete your financial strategy
Examples of investments/ insurance	Savings account, fixed deposits	Shares in companies in both developed and emerging markets	(Earlier) Shares in companies in both developed and emerging markets (Later) Shares in established companies in matured markets	Personal accident, medical, motor, houseowner, Mortgage Reducing Term Assurance (MRTA)

As you can see, besides growing your wealth, you need to protect it to safeguard your family's future. Investment-linked insurance helps you do just this, without having to purchase insurance or invest your money separately.

Three key benefits of investment-linked insurance

1. Financial protection against Death and Total and Permanent Disability (TPD). Optional riders for Critical Illness and Accidental Death and Dismemberment (ADD) are available with some policies
2. Investment opportunities
   • A choice of investment funds with different investment objectives (i.e. to generate income or to generate capital growth)
   • Diversification (to reduce risk)
   • Professional fund managers
   • Dollar-cost averaging (DCA)*
3. Flexibility
   • To alter the sum assured to match your changing protection needs
   • To alter your premiums to match your changing investment needs
   • To make partial withdrawals, switch funds, top-up and fully redeem your investment

*DCA usually provides better returns and less hassle. You do this by investing a fixed amount of money regularly, regardless of market conditions, instead of investing all your money in one go. Regular investment means that you buy more shares/units when the prices are low and less when prices are high. This evens out the risk of buying high and selling low, and usually results in a lower average cost per share/unit over time. For instance, if the market is falling sharply, then DCA evens out the initial high cost of the investment, thereby allowing you to start "turning around" before the market does. In addition, DCA means that you do not need to guess what will happen next in the market, as it has no bearing on your decision to invest.

Advantage of protecting your financials.

Widespread consumer credit defaults help makes it clear improved consumer protection is needed. Had there been better protection prior to the financial crisis this would have ameliorated the severity of the crisis and might even have forestalled it.

However, there are dangers in a Consumer Financial Protection Agency (CFPA), dangers of over regulation and of stifling innovation.  Proposals for blanket prohibitions and for compulsory provision of plain vanilla products are probably a step too far. The emphasis should be on improved transparency and on solving the market failure of inadequate information.

Many consumers lack knowledge and understanding in the financial area, so that disclosure alone is unlikely to be enough to solve the market failures in some areas. Even if it avoids ex ante prohibitions, the consumer protection agency should look for situations where companies are exploiting the lack of consumer knowledge. They should stop sharp practices and perhaps exact penalties on companies that have used them.

As a first choice, U.S. should have single conduct of business regulator covering both the protection of small shareholders and protecting consumers of financial products. The SEC is the natural choice to be the conduct of business regulator and the home for a consumer financial protection agency. As a second choice, a separate agency could serve, provided it has the appropriate structure and a staff that is balanced and knowledgeable about markets. This short paper makes these points by identifying key structural provisions of the Treasury’s proposed CFPA, enumerating some concerns that have been raised about it, arguing for a more balanced perspective on consumer protection, and offering some recommendations.

Introduction

One important cause of the financial crisis was the housing bubble: individuals and families borrowed heavily to buy houses they could not afford and subsequently defaulted on their mortgages. There was also speculation in the housing market as people bought residential properties hoping to sell them at a profit. And families that already owned homes borrowed against the equity that they had built up and then were unable to meet their debt obligations. This latter problem became much worse as a result of the subsequent decline in home prices and the loss of household income in the recession.

Difficulties in meeting credit card payments have also contributed to the financial crisis. A source of these problems arose when some credit card companies engaged in sharp practices. For example, some companies changed the due date for payment without warning, so that customers missed a payment deadline and incurred fees or penalties, including perhaps a sharp upward adjustment of the interest rate on outstanding balances.

In response to these experiences, it is appropriate to seek out policies to make sure that the same thing does not happen over again. Any future financial crisis will likely be different from the one we are going through, but it is still important to learn the lesson of history and not repeat it. Reasonably, therefore, the Obama administration has made consumer protection a major facet of its financial regulatory reform plan, proposing a new agency, the Consumer Financial Protection Agency (CFPA) as one of its reform proposals.

In the Senate, the Chair of the Banking Committee, Christopher Dodd has expressed support for measures to provide greater consumer protection. Barney Frank, chair of the House Financial Services Committee, sponsored a version of the CFPA, named the “Consumer Financial Protection Act of 2009”, or HR 3126. While major facets of the bill are quite similar to the administration’s proposal, a major difference between the House bill and the Obama plan is that the House bill “preserves the current federal banking regulators’ role to enforce the Community Reinvestment Act (CRA).”  It should be noted, however, that at the time of the writing of this paper Chairman Frank is circulating a new version of the bill that may in part exempt nonfinancial businesses that are acting in their traditional capacity, as well as other modifications. Similarly, in testimony before the House Financial Services Committee on September 23, Secretary Geithner expressed a willingness to work with congressional and industry opponents to soften some of the part of the proposal these stakeholders deemed most objectionable.

Still, the stated rationale for this proposal certainly raises the question of whether or not the best way to protect consumers and to protect taxpayers from the consequences of widespread consumer credit defaults is to create a new consumer protection agency. This short paper will identify key structural provisions of the Treasury’s proposed CFPA, enumerate some concerns that have been raised about it, argue for a more balanced perspective on consumer protection, and offer some recommendations.

Answer for why you need financial protection :)

1. For My Own Protection – When I was about to resign from my job, I was thinking, what if I suddenly had a serious illness or involved in accident and not able to work and earn any income? what will happen to me? Yes, I still have my family, but would it be fair to burden them? Would I want to burden them? I am not married, so I cannot be asking help from my husband. Will I have enough savings for the treatment and those health related matter? Will I trouble my parents and siblings for that? Sometimes, these thought made me having sleepless nights. With an insurance policy, at least I am covered for my illnesses with adequate financial support for any expensive treatment.
2. For My Savings – I am a business minded person which means that I am very calculative when it comes to my money but there are times that I spend money just to make myself and people who surrounds me happy. Yes, I do have my own savings in the bank and in mutual funds but with insurance, It’s another medium for me to force myself into saving a few hundred bucks monthly by contributing to my insurance premium and one thing for sure, by receiving my yearly account statement, I know where my money goes too.
3. For My Investment – Partial of my premium will be invested into selected funds with a handsome return that you can’t resist. Absolutely a great way to have extra money and it is safer too as insurance minimize the risk factor on your investment.
4. For My Retirement – With the hope that everything goes well without me making any major claims or withdrawals, I can retire early and receive my investments and live in Paris with my cats.
5. For My Future – When I learned that your premium increases together with your age, I realize that I really need to have an insurance coverage as early as possible. I do not want to wait until I have my own family or other big financial commitments in life as by then, the premium to start an enrollment for my insurance will be very high and insurance company have the rights to rejects or excludes applications with health problems. Among all of the above, the main reason why I decide to take up an insurance coverage is still based on the first reason which is PROTECTION. In case of any accidents or serious illnesses, there will be a strong financial support for myself and my family.