The Brief History and Developments of the Definitions for 36 Critical Illnesses or Dread Diseases in Malaysia Insurance Industry

Before we buy an Insurance plan, how many of us will normally ask an Insurance Agent to show them the detail definitions of the 36 Critical Illness of the respective Insurance company? Do you go through the definitions one by one? Do you know that every Insurance Company will have their own sets of 36 types of Critical Illnesses?

Well, let me share a brief introduction of the history and development of the definitions for 36 Critical Illnesses in Malaysia. Prior to Year 2000, every company has their own definition, and Insurance Companies are free to define themselves each and every illnesses as they feel appropriate. Smaller companies will tend to follow suit and include the illnesses in their plans and modify a little here and there. Big leading companies will try to include as many illnesses as possible to capture the market shares, starting from one company coming out with 3 Illnesses, then another introduced 8 Illnesses, and then the next one topping up till 12 Illnesses, all trying to steal the market by introducing more and more each and every year. Finally, it has reach to a level where we have seen today, a total of 36 Illnesses.

Then problem arise, so happen that there is a person who have 3 policies from 3 different Insurance companies diagnosis with a critical illness, but only able to claim from 2 policies. Reason given is that, although his critical illness matched with the definitions of 2 companies, resulting in 2 claims, the third one was not. The third company denied honoring the claim despite the policy holder file to the tribunal. And it happen that, the third company is not liable to pay, because the definition in the policy document do not matched the conditions experienced by the policy holder.

This issue of course did not end there. BNM (Bank Negara Malaysia) being the parent of all banking and insurance industry, steps in and required that all insurance companies should form an association for self-regulation and there should be a standardization across the board. So, LIAM (Life Insurance Association Malaysia) was tasked to regulate and standardize all the definitions for Critical Illnesses. 

Today, Insurance Companies are free to choose from a total of 42 Critical Illnesses and formulate their own 36 Illnesses, but definitions will be the same across all companies. Out of the 42 definitions, AIDS are separated into 3 definitions, but luckily PRUDENTIAL chose to combine into 1.
(1) Full Blown AIDS
(2) AIDS due to Blood Transfusion
(3) AIDS Cover of Medical Staff

Another example, Coronary Artery Disease are also separated into 3 illnesses, but PRUDENTIAL also combine into 1.
(1) Coronary Artery Disease Requiring Surgery
(2) Other Serious Coronary Artery Disease
(3) Angioplasty and Other Invasive Treatments for Coronary Artery Disease

I do not include other companies’ definitions here as I am not representations of other companies other than PRUDENTIAL. Here is the definition taken from latest PRUDENTIAL Life insurance policy, as at the time of writing. (ANNEXURE DFN)

In case you find that your current coverage are not complete, please consider getting additional coverage instead of cancelling old policies because older policies’ definitions are generally more lenient, and definitely cheaper than if you are purchasing new today because of your age.

DISCLAIMERS:

Please do not take this note as final, as upon claims, your policy documents will be served as final supporting documents for filing of claim. In case there is any part that I unintentionally missed, or mislead, I should not be liable as this is just for reference and do not construes as any law-abiding document. Please ignore this in case you find that I am misleading. I do this out of my interests to educate my friends and clients, and represent my sole views and opinions and have nothing to do with PRUDENTIAL ASSURANCE (M) BHD.

(1) AIDS

(a) AIDS Due To Blood Transfusion

Shall mean the Insured Life being infected by HIV virus or AIDS provided that:

(i) the infection is due to blood transfusion received in Malaysia or Singapore after the commencement of the Policy;
(ii) the Insured Life is not a haemophiliac; and
(iii) the Insured Life is not a member of any high risk groups such as but not limited to homosexuals, intravenous drug users or sex workers.

Notification & proof of incident will be required via a statement from a statutory Health Authority that the infection is medically acquired.

(b) Full Blown AIDS

Shall mean the clinical manifestation of AIDS (Acquired Immune-deficiency Syndrome) must be supported by the results of a positive HIV (Human Immuno-deficiency Virus) antibody test and a confirmatory Western Blot test. In addition, the Insured Life must have a CD4 cell count of less than two hundred (200) and one or more of the following criteria are met:
(i) Weight loss of more than 10% of body weight over a period of six (6) months or less (wasting syndrome); or
(ii) Kaposi Sarcoma; or
(iii) Pneumocystic Carinii Pneumonia; or
(iv) Progressive multifocal leukoencephalopathy; or
(v) Active Tuberculosis; or
(vi) Less than one-thousand (1000) lymphocytes; or
(vii) Malignant Lymphoma.

(2) Aplastic Anaemia

Shall mean chronic persistent bone marrow failure which results in total aplasia of the bone marrow & requires treatment with at least one of the following:

(a) Regular blood product transfusion; or
(b) Marrow stimulating agents; or
(c) Immunosuppressive agents; or
(d) Bone marrow transplantation.

(3) Apallic Syndrome

Shall mean universal necrosis of the brain cortex, with the brainstem remaining intact. Diagnosis must be confirmed by a neurologist & condition must be documented for at least one month.

(4) Alzheimer’s Disease

Shall mean deterioration or loss of intellectual capacity or abnormal behavior as evidenced by the clinical state and accepted standardized questionnaires or tests arising from Alzheimer’s Disease or irreversible organic degenerative brain disorders excluding neurosis, psychiatric illness, and any drug or alcohol related organic disorder, resulting in significant reduction in mental and social functioning requiring the continuous supervision of the life insured. The diagnosis must be clinically confirmed by an appropriate consultant.

(5) Benign Brain Tumor

Shall mean a life-threatening, non-cancerous tumour in the brain giving rise to characteristic signs of increased intra-cranial pressure such as papilloedema, mental symptoms, seizures and sensory impairment. The presence of the underlying tumour must be confirmed by imaging studies such as CT Scan or MRI. The following are excluded:
(a) Cysts;

(b) Granulomas;

(c) Malformations in or of the arteries or veins of the brain;

(d) Haematomas;

(e) Tumours in the pituitary gland, or spine; and

(f) Tumours of the acoustic nerve.

(6) Blindness

Shall mean the total, permanent and irrecoverable loss of the sight of both eyes. Certification by an ophthalmologist is necessary.

(7) Brain Surgery

Shall mean the actual undergoing of surgery to the brain under general anesthesia during which a craniotomy is performed. Bur Hole & brain surgery as a result of an accident is excluded.

(8) Cancer

Shall mean uncontrollable growth & spread of malignant cells and the invasion & destruction of normal tissue for which major interventionist treatment or surgery (excluding endoscopic procedures alone) is considered necessary. The cancer must be confirmed by histological evidence of malignancy.
The following conditions are excluded:-
(a) Carcinoma in situ including of the cervix;
(b) Ductal Carcinoma in situ of the breast;
(c) Papillary Carcinoma of the bladder & Stage 1 Prostate Cancer;
(d) All skin cancers except malignant melanoma;
(e) Stage I Hodgkin’s disease; and
(f) Tumors manifesting as complications of AIDS.

(9) Cardiomyopathy

Shall mean the unequivocal diagnosis by a consultant cardiologist of cardiomyopathy causing impaired ventricular function, suspected by ECG abnormalities and confirmed by cardiac echo of variable aetiology and resulting in permanent physical impairments to the degree of at least class III of the New York Association Classification of cardiac impairment.

Class III – Marked limitation – Such patients are comfortable at rest but performing less than ordinary activity will lead to symptoms of Congestive Cardiac Failure.

Class IV – Inability to carry out any activity without discomfort. Symptoms of Congestive Cardiac Failure are present even at rest. With any increase in physical activity, discomfort will be experienced.

Cardiomyopathy directly related to alcohol misuse is excluded.

(10) Chronic Liver Disease

Shall mean end stage liver failure evidenced by all of the following:

(a) Permanent jaundice;

(b) Ascites;

(c) Encephalopathy; and

(d) Portal hypertension

Wernicke’s encephalopathy & liver failure secondary to alcohol or drug misuse is excluded.

(11) Chronic Lung Disease

Shall mean end stage respiratory failure including chronic interstitial lung disease.
The following criteria must be met:

(a) Requiring permanent oxygen therapy as a result of a consistent FEV1 test value of less than one liter. (Forced Expiratory Volume during the first second of a forced exhalation);
(b) Arterial Blood Gas analysis with partial oxygen pressures of 55mmHg or less;
(c) Dyspnoea at rest.

(12) Coma

Shall mean a state of unconsciousness with no reaction or response to external stimuli or internal needs, persisting continuously for at least 96 hours, requiring the use of life support systems and resulting in a neurological deficit, lasting more than 30 days. Confirmation by a neurologist must be present.

Coma resulting directly from self-inflicted injury, alcohol or drug misuse is excluded.

(13) Coronary Artery Disease

(a) Coronary Artery Disease Requiring Surgery

Shall mean the actual undergoing of Coronary artery by-pass surgery by way of thoracotomy to correct or treat coronary artery disease but not including angioplasty, other intra-arterial, keyhole or laser procedures.

(b) Other Serious Coronary Artery Disease

Shall mean the narrowing of the lumen of at least three major arteries i.e. Circumflex, Right Coronary Artery (RCA), Left Anterior Descending Artery (LAD), by a minimum of 60 percent or more as proven by coronary arteriography. This benefit is payable regardless of whether or not any form of coronary artery surgery has been performed.

(c) Angioplasty and Other Invasive Treatments for Coronary Artery Disease

Shall mean the actual undergoing for the first time of Coronary Artery Ballon Angioplasty, artherectomy, laser treatment or the insertion of a stent to correct a narrowing or blockage of one or more coronary arteries. Intra-arterial investigative procedures are not included.

Medical evidence shall include all of the following:
(i) Evidence of significant and relevant ECG changes (ST segment depression of 2 millimeters or more) and
(ii) Angiographic evidence to confirm the location of stenosis.

(14) Deafness

Shall mean total, permanent and irreversible loss of hearing in both ears as a result of disease or accident. Medical evidence in the form of an audiometry and sound-threshold test must be provided.

(15) Encephalitis

Shall mean severe inflammation of brain substance, resulting in permanent neurological deficit lasting for a minimum period of 30 days and certified by a consultant neurologist. The permanent deficit must result in an inability to perform at least three (3) of the following Activities of Daily Living either with or without the use of mechanical equipment, special devices or other aids and adaptations in use for disabled persons. For the purpose of this benefit, the word “permanent”, shall mean beyond the hope of recovery with current medical knowledge and technology.

The Activities of Daily Living are:

(a)        Transfer

Getting in & out of a chair without requiring any physical assistance.

(b)        Mobility

The ability to move from room to room without requiring any physical assistance.

(c)        Continence

The ability to voluntarily control bowel and bladder functions such as to maintain personal hygiene.

(d)       Dressing

Putting on and taking off all necessary items of clothing without requiring assistance of another person.

(e)        Bathing / Washing

The ability to wash in the bath and shower (including getting in or out of the bath or shower) or wash by any other means.

(f)        Eating

All tasks of getting food into the body once it have been prepared.

Encephalitis as a result of HIV infection is excluded.

(16) Fulminant Viral Hepatitis

Shall mean a sub massive to massive necrosis of the liver caused by any virus leading precipitously to liver failure.

The diagnostic criteria to be met are:
(a) A rapidly decreasing liver size as confirmed by abdominal ultrasound;
(b) Necrosis involving entire lobules, leaving only a collapsed reticular framework;
(c) Rapidly deteriorating liver functions tests; and
(d) Deepening jaundice.

Hepatitis B infection or carrier status alone does not meet the diagnostic criteria.

(17) Heart Attack

Shall mean death of a portion of the heart muscle (myocardium) as a result of inadequate blood supply and being evidenced by:-

(a) A history of typical prolonged chest pain;
(b) New electrocardiographic changes resulting from this occurrence; and
(c) Elevation of the cardiac enzyme (CPK-MB) above the generally accepted laboratory levels of normal.

Diagnosis based on the elevation of Troponin T test alone shall not be considered diagnostic of a heart attack.Angina is specifically excluded.

(18) Heart Valve Replacement

Shall mean the actual undergoing of open-chest surgery to replace or repair cardiac valves as a consequence of heart valve defects or abnormalities that have occurred after the date of issue or date of reinstatement of this contract.

Repair, via valvotomy, intra-arterial procedure, key-hole surgery or similar techniques are specifically excluded.

(19) Kidney Failure

Shall mean end stage kidney failure presenting as chronic irreversible failure of both kidneys to function, as a result of which regular renal dialysis is initiated or renal transplantation carried out.

(20) Loss of Independent Existence

Shall mean confirmation by a Consultant Physician of the loss of independent existence lasting for a minimum period of 6 months and resulting in a permanent inability to perform at least three (3) of the following Activities of Daily Living either with or without the use of mechanical equipment, special devices or other aids and adaptations in use for disabled persons. For the purpose of this benefit, the word “permanent”, shall mean beyond the hope of recovery with current medical knowledge and technology.

The Activities of Daily Living are:

(a)        Transfer

Getting in & out of a chair without requiring any physical assistance.

(b)        Mobility

The ability to move from room to room without requiring any physical assistance.

(c)        Continence

The ability to voluntarily control bowel and bladder functions such as to maintain personal hygiene.

(d)       Dressing

Putting on and taking off all necessary items of clothing without requiring assistance of another person.

(e)        Bathing / Washing

The ability to wash in the bath and shower (including getting in or out of the bath or shower) or wash by any other means.

(f)        Eating

All tasks of getting food into the body once it have been prepared.

(21) Loss of Speech

Shall mean total and irrecoverable loss of the ability to speak for a continuous period of 12 months. Medical evidence to confirm injury or illness to the vocal cords to support this disability must be supplied by an appropriate (Ear, Nose, Throat) specialist.
All psychiatric related causes are excluded.

(22) Major Burns

Shall mean third degree burns covering at least twenty percent (20%) of the Insured Life’s body surface area as measured by “The Rule of 9” of the Lund & Browder Body Surface Chart.

(23) Major Head Trauma

Shall mean physical head injury causing significant permanent functional impairment lasting for a minimum period of three (3) months from the date of the trauma or injury. The resultant permanent functional impairment is to be verified by a consultant neurologist and duly concurred by the Company’s Medical Officer and must result in an inability to perform at least three (3) of the following Activities of Daily Living either with or without the use of mechanical equipment, special devices or other aids and adaptations in use for disabled persons. For the purpose of this benefit, the word “permanent”, shall mean beyond the hope of recovery with current medical knowledge and technology.

The Activities of Daily Living are:

(a)        Transfer

Getting in & out of a chair without requiring any physical assistance.

(b)        Mobility

The ability to move from room to room without requiring any physical assistance.

(c)        Continence

The ability to voluntarily control bowel and bladder functions such as to maintain personal hygiene.

(d)       Dressing

Putting on and taking off all necessary items of clothing without requiring assistance of another person.

(e)        Bathing / Washing

The ability to wash in the bath and shower (including getting in or out of the bath or shower) or wash by any other means.

(f)        Eating

All tasks of getting food into the body once it have been prepared.

(24) Major Organ Transplant

Shall mean the actual undergoing of a transplant as a recipient of one of the following human organs:

(a) Kidney(s)
(b) Lung(s)
(c) Liver
(d) Heart
(e) Bone marrow

(25) Medullary Cystic Disease

Shall mean a progressive hereditary disease of the kidneys characterized by the presence of cysts in the medulla, tubular atrophy and intestitial fibrosis with the clinical manifestations of anaemia, polyuria and renel loss of sodium, progressing to chronic renal failure. Diagnosis should be supported by renel biopsy.

(26) Meningitis

Shall mean bacterial meningitis causing inflammation of the membranes of the brain or spinal cord resulting in permanent neurological deficit lasting for a minimum period of 30 days & resulting in a permanent inability to perform at least three (3) of the following Activities of Daily Living either with or without the use of mechanical equipment, special devices or other aids and adaptations in use for disabled persons. For the purpose of this benefit, the word “permanent”, shall mean beyond the hope of recovery with current medical knowledge and technology.

The Activities of Daily Living are:

(a)        Transfer

Getting in & out of a chair without requiring any physical assistance.

(b)        Mobility

The ability to move from room to room without requiring any physical assistance.

(c)        Continence

The ability to voluntarily control bowel and bladder functions such as to maintain personal hygiene.

(d)       Dressing

Putting on and taking off all necessary items of clothing without requiring assistance of another person.

(e)        Bathing / Washing

The ability to wash in the bath and shower (including getting in or out of the bath or shower) or wash by any other means.

(f)        Eating

All tasks of getting food into the body once it have been prepared.

(27) Motor Neurone Disease

Shall mean motor neurone disease of unknown aetiology is characterized by progressive degeneration of corticospinal tracts and anterior horn cells or bulbar efferent neurons. These include spinal muscular atrophy, progressive bulbar palsy, amyotrophic lateral sclerosis and primary lateral sclerosis.

Diagnosis must be confirmed by a consultant neurologist.

(28) Multiple Sclerosis

Shall mean unequivocal diagnosis by a consulting neurologist confirming the following combination, which has persisted for at least a continuous period of six (6) months:

(a) Symptoms referable to tracts (white matter) involving the optic nerves, brain stem and spinal cord, producing well-defined neurological deficits;
(b) A multiplicity or discrete lesions; and
(c) A well-documented history of exacerbation and remissions of said symptoms / neurological deficits.

(29) Muscular Dystrophy

Shall mean the diagnosis of muscular dystrophy shall require a confirmation by a consultant neurologist of the combination of 3 out of 4 of the following conditions:

(a) Family history of other affected individuals; or
(b) Clinical presentation including absence of sensory disturbance, normal cerebro-spinal fluid and mild tendon reflex reduction; or
(c) Characteristic electromyogram; or
(d) Clinical suspicion confirmed by muscle biopsy.

Children are excluded from the definition.

(30) Paralysis

Shall mean the complete and permanent loss of use of both arms or both legs, or one arm and one leg, through paralysis caused by illness or injury persisting for at least six (6) months from the date of trauma or illness.

(31) Parkinson’s Disease

Shall mean unequivocal diagnosis of Parkinson’s Disease by a consulting neurologist where the condition:

(a) Cannot be controlled with medication
(b) Shows signs of progressive impairment

Activities of daily living assessment confirm the inability of the life insured to perform without assistance three (3) or more of the following:

(a)        Transfer

Getting in & out of a chair without requiring any physical assistance.

(b)        Mobility

The ability to move from room to room without requiring any physical assistance.

(c)        Continence

The ability to voluntarily control bowel and bladder functions such as to maintain personal hygiene.

(d)       Dressing

Putting on and taking off all necessary items of clothing without requiring assistance of another person.

(e)        Bathing / Washing

The ability to wash in the bath and shower (including getting in or out of the bath or shower) or wash by any other means.

(f)        Eating

All tasks of getting food into the body once it have been prepared.

Only idiopathic Parkinson’s Disease is covered. Drug-induced or toxic causes of Parkinsonism are excluded.

(32) Poliomyelitis

Shall mean unequivocal diagnosis by a consultant neurologist of infection with the Poliovirus leading to paralytic disease as evidenced by impaired motor function or respiratory weakness. Cases not involving paralysis will not be eligible for this benefit. Other causes of paralysis (such as Guillain-Barre syndrome) are specifically excluded.

(33) Primary Pulmonary Arterial Hypertension

Shall mean primary pulmonary hypertension with substantial right ventricular enlargement established by investigations including cardiac catheterization, resulting in permanent irreversible physical impairment to the degree of at least Class 3 of the New York Heart Association Classification of cardiac impairment, & resulting in the Life Assured being unable to perform his/her usual occupation.

(34) Stroke

Shall mean a cerebrovascular accident or incident producing neurological sequelae of a permanent nature, having lasted not less than six months. Infarction of brain tissue, haemorrhage and embolisation from an extra-cranial source are included. The diagnosis must be based on changes seen in a CT scan or MRI and certified by a neurologist.

Specifically excluded are cerebral symptoms due to transient ischaemic attacks, any reversible ischaemic neurological deficit, vertebrobasilar ischaemia, cerebral symptoms due to migraine, cerebral injury resulting from trauma or hypoxia & vascular disease affecting the eye or optic nerve or vestibular functions.

(35) Surgery To Aorta

Shall mean the actual undergoing of surgery via a thoracotomy or laprotomy to repair or correct an aortic aneurysm, an obstruction of the aorta or a coarctation of the aorta. For the purpose of this definition, aorta shall mean the thoracic and abdominal aorta but not its branches.

(36) Systemic Lupus Erythematosus Lupus Nephritis

Shall mean a multisystem, multifactorial, autoimmune disorder which affects mostly females in their childbearing years & is characterized by the development of auto-antibodies, directed against various self-antigens.

In respect f this contract, SLE will be restricted to those forms of systemic lupus erythematosus which involve the kidneys (Type III to Type IV Lupus Nephritis, established by renel biopsy). Other forms, discoid lupus, and those forms with only haematological and joint involvement will be specifically excluded.

WHO Lupus Classification:

Class I (minimal change)                     - Negative, normal urine

Class II (Mesangial)                            - Moderate proteinuria, active sediment

Class III (Focal Segmental)                - Proteinuria, active sediment

Class IV (Diffuse)                              - Acute nephritis with active sediment and/or nephritis Syndrome

Class V (Membranous)                       - Nephrotic Syndrome or severe proteinuria.

Malaysia Insurance Industry Updates

Should I just let the photos do it's own talking...?

Which company is more financially stable?

Which company is largest by size and revenue in 2010?

Which company growth the most in 2010, and continue growing?

Which is the first company to hit RM 1 BILLION sales in Year 2010 in Malaysia?

Terima kasih seBillion... Thanks a Billion.... 

Top 6 Insurance Companies in Malaysia as at Year 2010

Total Payout by Prudential in Year 2010 is RM753million...

Do you know the meaning of the term TPD in Insurance?

TPD is the short form for TOTALLY & PERMANENTLY DISABLED.


Still very technical and don't understand?


Well, that's why I'm here bringing out this BORING topic... (",)
Hope nobody falls asleep reading this post..


My aim is to make it clear, once and for all, in layman terms, so that ah pek, ah ma, uncle, auntie, brother, sister, and little boy, little girl also can understand..


A lot of time, we hear people saying:- INSURANCE CHEAT PEOPLE...


How true is that? We don't know and never bother to find out the facts and the true story behind. We just pity the "victims", and assumed that, YES, Insurance must be cheating someone, that's why someone is complaining and raising the issue with the media... And so, we stay away from it, as far as possible.. After all, it's better to be safe than sorry...


BUT, many a times, it is not that Insurance Companies cheat PEOPLE.. Insurance Companies operate under strict rules and regulations under supervision by BNM, and self regulated under LIAM and PIAM... And they all have to bide by the rules so that they do not lose their licences to operate. Everything is all in black and white, even IF the Insurance Companies were trying to cheat, they will be having a hard time finding ways... (I would say that it is almost impossible for them to cheat, at all.) 


Furthermore, how much is your premium? Will the companies be so STUPID in cheating our "less than RM100,000" premiums and risking their BRAND and GOODWILLS worth much more than that? No way, man....


Whereas, I have actually seen it with my bare eyes that people cheat Insurance Companies with the help of Insurance Agents, and Doctors... Well, I'm not going to share how they did it, because if their ways are perfect, they wouldn't have been caught already... 


Now, let me get back to the main topic today - TPD...


How is the word TPD defined in Insurance Policies? 
How can a person qualify under TPD?


I'm sure many are starting to scratch their head now... 
Let me ask you few simple questions..


1. Is losing one or two of your palm considered TPD?
2. Is losing an arm or a leg considered TPD?
3. Is losing eye sight of an eye qualify for 50% of TPD?


If you answer YES to above 3 questions, then you are like most of the people on the street...


Would you mind if I ask you to bring out your Insurance Policies from your drawer now?
Go, check it out, and read aloud what it wrote.
Look at the fine prints as well...


Having problems finding where is it located in your policies documents? 
You may email me at marvynchoong@hotmail.com. 
If you are from within Malaysia, you may try to make an appointment to meet me in Penang, I'll help you out personally.


Now, let me show you the actual BLACK and WHITE definition from Prudential policy document.

So, what do you understand from the above definition circled in RED?


Now, what does it mean lose by severance one limb each at or above his wrist and ankle, or two limbs at or above his wrist or ankle?


It means that the limb must be lose by severance. 


But, what is lose by severance? 
Mandarin translation is 失去遣散.


But, you understand the meaning?


In layman terms, that literally means the limb must be detached from your body.
If the limb is still attached to the body, but loss its functions, then it don't fall under clauses (iii) and (iv).


Now, go back to point (iii) and (iv) again, do you noticed that the lose of limb by severance must be above wrist or ankle?


That means that, if someone loss his palm, or feet, he is not qualify under clauses (iii) and (iv).


So, looking at clauses (ii), (iii) and (iv), it tells us that to qualify for TPD, the someone must either loses sight in both eyes, or loses sight on an eye plus loses by severance a limb above wrist or ankle, or loses by severance two limbs above wrist or ankle.

Understand now?

Let me illustrate with drawings although my drawing is not nice... (",)


Now, the writing means that TPD = loss of 2/6 Body parts by Severance.
Let say both eyes are labelled as [1], [2], and both limbs above wrist are labelled as [3], [4], and lastly, both limbs above ankle are labelled as [5], [6].

To qualify for TPD,
Clauses (ii) means part [1] and [2].
Clauses (iii) means part [3] and [4],
                         or part [5] and [6],
                         or part [3] and [5],
                         or part [4] and [6],
                         or part [3] and [6],
                         or part [4] and [5].
Clauses (iv) means part [1] and [3],
                         or part [1] and [4],
                         or part [1] and [5],
                         or part [1] and [6],

                         or part [2] and [3],

                         or part [2] and [4],

                         or part [2] and [5], 

                         or part [2] and [6],

Crystal Clear now?

GOOD.. I assumed you are ULTRA clear now with the drawing plus my descriptions...

Now, some of you might have noticed that I purposely leave out Clauses (i)... and start wondering why!!

Let me explain the meaning of Clauses (i) first.

Clauses (i) means that if a person do not qualify for Clauses (ii), or (iii) or (iv), there are still hope for you, because Clauses (i) is more lenient, and not so strict. As long as a person can prove that he is unable to engage in any occupation and is permanently and completely unable to perform any work for remuneration or profit, then it means the person is also considered TPD.

Happy with Clauses (i) ?

I love this Clauses (i) so much that I also look out for it in every policies that I can get my hands on...
Why? Why do I need to check on every policies?
Isn't it standardized in every policies sold out in Malaysia?

I also thought so... But to my horror and disappointment... I realised that some Insurance Companies do not include Clauses (i) in the TPD definition.

Please... do yourself a favour, can you please spend some time to look through your policies documents once more?

Is there Clauses (i)???

If there's none, there's two things you need to do.

Firstly, check with the Insurance Companies whether there's any amendments on this TPD clauses that included Clauses (i), but somehow they forgot to update you. If their reply to you is that the Clauses (i) is included, please get a black and white endorsement on the said clauses with your policy number clearly stated on it. Do not be fool into believing their sweet talk or whatever verbal explanations, because at the time of claims, everything will have to be based on the BLACK & WHITE stated in your policy documents.

Secondly, if the Clauses (i) is not included, then you might need to consider getting extra coverages from companies which offer such Clauses...

Feel free to comment and share me what you think.

Insurance Cheat People?

Refer to the link about a real-life case: http://blog.thestar.com.my/permalink.asp?id=34871&cat=1

So, what conclusion you can get from this issue?

Hey, I'm Insurance Agent, yes, but I'm not here defending anyone or defending the industry as a whole. What's our rights, we need to find out, and if we are right, do not feel fear to fight for our rights... Well, there's why lawyers are for... Lawyer's job is to fight for us..

But, let me back to discuss what an Insurance Agent's job are..

Insurance Agent, like me, are here to explain and create awareness for the Public who feels that Insurance Companies have taken advantages on them..

One of the commentor, yeesang, even posted this...

Firstly, I have never trusted a second-hand car dealer or its salesmen.

Secondly, I have never trusted any insurance company and its salesmen too."

This is so....SAD...

Yes, I use the word sad because if yeesang didn't trust insurance at all, I can most certainly be sure that he/she don't have any insurance policies, and if my assumption is right, then who is ultimately going to pay his/her medical bills?

Now, let me highlight what the complaint is all about by reposting the whole text here:-

Yes, some insurance policies are so strict that they tantamount to cheating the customers.

There are some policies where the penalty for early cancellation is so severe you get practically zero.

My wife bought three policies without understanding fully the conditions. She was lured into promises of high surrender value but in actual fact she not only does not earn any form of interest but the so-called bonus rewards end up as a smoke screen. How come?

This is because when she wants to opt out after 10 years she has to forfeit a lump sum of her premium payments.

That is how your insurance agents earn their fat commissions!  - By bobocheah, 11-Apr-2011

He mentioned that someone lured his wife into believing that the surrender value is high!!

Wait a moment, you purchase a savings endowment plan because you want to get high surrender value???

How wrong is that?

We purchase endowment plan because we want to ensure that our retirement needs are taken care of, because we want to build up a cash pile to be ready when we are old, and to supplement as our 2nd EPF funds... and also because we know that if we are diagnosis with critical illness half-way during the accumulation periods, insurance companies will help us save and ensure that our retirement needs are well taken care of...

That should be our one and only aim when we sign on the dotted line for an Endowment Savings plan..

I always tell my prospects that, make sure the premium is something you are comfortable paying, as you will not be able to get back your capital if you are unable to continue the premium payment until the premium payment term.

So, to all those out there, can you go back and check on your policy document and find out what is the total premium payment term???

Don't just rely on your Insurance Agents telling you that you just need to pay for n years.

The n might be 5 years, 6 years, 8 years, 10 years... depending on your plan features...

To my horror, in fact, I found out that many irresponsible agents told their clients that n is 6 years, but actual term is whole life...

But why 6 years? Why the agent told its client only need to pay for 6 years?

Haha... Coincidentally, agent's commissions are for 6 years only..

After 6 years, agents don't get anymore commissions and that's why they don't bother whether you still pay for your policies, or whether your policy still inforce, because to them, even if your policies lapse, it would affects their persistency rates, and they had already earned full commissions from the policies..

So, as a conclusion, beware and always go through the policy documents when you received it from your agents. Remember, you have 15 days cooling off period to read through it and decide once more..

If you are unsure of anything, you can refer to your agent again, and if he/she can't go through the policies with you, most probably he/she is not good at his/her job, and probably, it's time to consider purchasing from others and cancel the policy.

Well, hope you learn something from this post, and feel free to share with me your own experiences and I'll share with you my views and probably some suggestions...

(",) Cheers!

Larger bank profits as BLR increase outpaces OPR rise

The higher increase in the base lending rate (BLR, to which lending rates are pegged) compared with that of the benchmark overnight policy rate (OPR) has raised more than eyebrows among consumers.

“This is totally unacceptable,'' a reader wrote in an email to StarBiz. “Banks will be making higher margins at our expense.

“If you look back since Bank Negara cut the OPR to 2% and then increased it back to 3%, the BLR has increased at a faster pace. Back in 2008 when the OPR was 3.25%, the BLR was 6.5% but now the OPR is at 3% and the BLR is at 6.6%.

“Bank margins have expanded by 35 basis points (one basis point is one hundredth of 1%). With RM900bil in total loans, this expands banks' profits by RM3.2bil at the expense of consumers.

“Also, when the SRR (statutory reserve requirement interest free deposits banks must keep with Bank Negara) was reduced from 4% to 1% of deposits, the savings were not passed on. But now that the SRR has been raised back to 3%, banks expanded BLR by five bps.

Effective May 11, the BLR went up 30bps (to 6.6%) which is higher than the OPR increase of 25 bps.

This speedier repricing of loans relative to fixed deposits may be mildly positive on bank margins in the near term but have already got some consumers up in arms.

“By our estimates, the additional 5bps increase in the BLR sufficiently compensates for the recent 100 bps increase in SRR to 3%,'' said Maybank IB, adding that this was probably an ad-hoc adjustment rather than to specifically compensate for the SRR hike.

RHB Bank principal officer Renzo Viegas said each banking institution could introduce its own BLR based on its cost structure and business strategies.

Under Bank Negara's new interest rate framework issued in 2004, this was allowed to provide more efficient pricing of financial products.

But for most banks, the OPR is a key variable in deriving the BLR.

“Assuming that cost structure and business strategies remain intact, it is therefore not surprising that with every OPR hike or contraction, the BLR will adjust in tandem with the change in OPR,'' said Renzo.

There are mixed views on regulatory intervention to prevent the rise of BLR following an increase in OPR.

“It is best that market forces determine the trajectory of interest rates,'' said Malaysian Rating Corp Bhd (MARC) vice-president and head of financial institution ratings Anandakumar Jegarasasingam.

Banks are likely to experience a narrowing of net interest margins with the recent OPR hike which is concurrent with the upward movement in the SRR coupled with intense competition, said RAM Ratings head of financial institution ratings Promod Dass.

“However, banks with a large proportion of their funding base composed of low cost deposits (current and savings accounts or CASA) and a predominantly floating rate loan book will be able to better mitigate this trend,'' Promod said.

Renzo sees that for banks with a high fixed rate loan book, this may have a negative effect on margins.

For banks with high floating rate books and strong CASA to fixed deposit ratio, the OPR hike will likely improve the overall net interest margin, said Renzo.

According to Maybank IB Research, the prime beneficiaries would be Maybank and CIMB which have a lower proportion of fixed rate loans and higher CASA base.

Hwang DBS Research, in its update on Asean banks, had identified Maybank, Hong Leong and Alliance as having a higher proportion of variable rate loans and CASA.

However, higher rates may affect the repayment ability of some borrowers. “Any potential default as a result of this is likely to be manageable at this stage,'' Anandakumar said.

Analysts estimate about 55% of the total loan portfolio of banks comprises consumer loans, which include 24% to 25% in mortgages.

Besides the BLR, another indicator is the average lending rate which can vary especially in the cut-throat mortgage market.

“Five years ago, mortgage lending was BLR plus 1% or 0.6%. Since then, it is BLR minus 2.4%,'' said an analyst. “We have to look at the effective lending rate.''

“Pricing strategies deployed by banks would generally result in narrower margins,'' said Anandakumar.

However, that could result in expanded market share.

To compensate for the lower margins, banks have other strategies such as packaging lending products with lock-in periods and insurance products.

They have also made their deposit structures more attractive to ensure a supply of low-cost funding, he added.

“When all banks gravitate towards homogenous pricing across the industry to capture market share, the margins will definitely compress,'' said Renzo.

Those with strong credit risk controls and low expense base will continue to remain profitable; however, balance sheet growth does not necessarily lead to sustainable profitability growth, he cautioned. - by Yap Leng Kuen (The Star)