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.