Once upon a time ….
I heard about this topic when my colleague was comparing the simple concept of buying the Nasi Lemak set to the concept of buying a life insurance plan or subscribing to a Family Takaful plan. An interesting analogy.
Disclaimer: I post this article to help normal people (not insurance/takaful agents) to understand how insurance/takaful works and how to start to subscribe to an insurance/takaful plan.
The concept is simple. Imagine we are at this makcik’s (aunty’s) roadside stall selling nasi lemak and some extra dishes, and some other foods like ‘mee goreng’ and ‘kuih-muih’.
When an insurance/takaful agent mentions the terminology Basic Plan, it is like buying the Basic Nasi Lemak set, where we will have the mandatory items which is the coconut-milk-steamed rice, the ‘ikan bilis’, spicy ‘sambal’ sauce, ‘kacang’ and ‘timun’ slices. Just like the insurance/takaful plan, we will also have the mandatory items attached to the Basic Plan, which cover incidents like death due to natural or accidental, disability due to natural causes and the cover period.
The ‘Perlindungan Tenang’ plan was launched by the Malaysian government late 2017, with its tagline – Simple and Affordable Protection For All, a plan that has a choice of RM20K sum cover in average by insurance/takaful providers, with monthly commitments of RM100 average per month. This plan is an example of the Basic Nasi Lemak set.
If let’s say we want to add some extra items like chicken or prawns into our Nasi Lemak set, we will have to add the Nasi Lemak cost. Same goes for insurance/takaful plans, when we want to add additional features to our plans, we also have to add the insurance/takaful costs. Some of the additional features we may want to add to the insurance/takaful plans may include Critical Illnesses benefits, Personal Accident benefits, Hospital Allowance benefits, Contributor/Payor Benefits, Additional Benefits exclusive to Male/Female, Medical Card benefits and many more. Don’t forget that the insurance/takaful costs will increase if you have so many dishes added to the Nasi Lemak.
Most insurance/takaful agents will quote us the Basic Plan + Insurance/Takaful riders, which then normally named as Comprehensive Plans.
Oh ya !
We can also buy the chicken, prawns or other dishes without the Nasi Lemak. In insurance/takaful, this act is called subscribing to the stand-alone plan i.e. subscribing to a stand-alone Personal Accident plan, or subscribing to a stand-alone Critical Illnesses Benefit plan.
Things to note:
a) Not all insurance/takaful companies in Malaysia provide ‘Perlindungan Tenang’ plans
b) Not all insurance/takaful companies have stand-alone insurance/takaful riders
c) Insurance/Takaful costs will increase when you have so many riders attached to the Basic Plan
d) Insurance/Takaful costs will vary from one person to another due to age, work nature as well as family and own medical history
e) If you want to use Insurance/Takaful plans for investment, always consider Unit Trust funds as one of the investment vehicle to get better returns.
Please check with your agents on what insurance/takaful plan(s) you have, or you can also talk to me if you want to know more about what insurance/takaful plan(s) that can suit you, or just want to simply do a review on your existing insurance/takaful plan(s). Click here to arrange a slot with me.