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Frequently Asked Questions (FAQs) |
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| Takaful and Insurance Benefits Protection |
Q1: What is the Takaful and Insurance Benefits Protection System?
A: The Takaful and Insurance Benefits Protection System (TIPS) is a system established by the Government to protect you against the loss of your eligible takaful or insurance benefits in the event that an insurer member fails and is unable to honour the takaful or insurance benefits. PIDM will make payments against eligible claims of benefits of takaful certificate or insurance policy owners should an insurer member fail.
Q2: Which takaful operators and insurance companies are member institutions of PIDM?
A: All takaful operators licensed under the Takaful Act 1984 to conduct family solidarity and/or general takaful business in Malaysia, as well as insurance companies licensed under the Insurance Act 1996 to conduct life and/or general insurance business in Malaysia are member institutions of PIDM. Membership in PIDM is compulsory as provided under Akta Perbadanan Insurans Deposit Malaysia 2011. Takaful operators and insurance companies which are member institutions of PIDM are referred to as ‘insurer members’. Look out for this membership sign at all the entrances to offices of your takaful operator or insurance company Insurer members are required to prominently display this membership sign or decal at all the entrances to their offices.
For branch offices of insurer members in Peninsular Malaysia
For branch offices of insurer members in Sabah
For branch offices of insurer members in Sarawak
Q3: Which institutions are not insurer members of PIDM?
A: The following institutions are not insurer members of PIDM:
- Reinsurance companies and retakaful operators
- International takaful operators licensed under the Takaful Act 1984
- Captive insurers and specialist insurers
- Danajamin Nasional Berhad
- Offshore insurance companies
- Other players in the insurance industry, such as insurance brokers, insurance adjusters and insurance agents or financial advisers.
Q4: Must I apply or register for TIPS protection?
A: No, you do not need to apply or register. You are automatically protected for eligible takaful and insurance benefits.
Q5: Are all takaful certificate and insurance policy owners eligible for protection under TIPS?
A: Takaful certificate and insurance policy owners eligible for protection under TIPS include individuals, sole proprietors, partnerships, trade unions, registered societies, cooperatives, registered charities and corporations.
Q6: What takaful and insurance benefits are protected under TIPS? What are the limits and scope of coverage provided under TIPS?
A: The takaful and insurance benefits protected under TIPS and related limits are set out in Tables 1 and 2 below.
Table 1: Protected Benefits for Family Solidarity Takaful and Life Insurance
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TABLE 1
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FAMILY SOLIDARITY TAKAFUL/LIFE INSURANCE
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| Benefits Protected |
Maximum Limit (Individual or Group Policies/Plans) |
| Death and related benefits |
RM500,000 |
| Permanent disability |
RM500,000 |
| Critical illness |
RM500,000 |
| Maturity value (excluding unit portion of investment-linked policies) |
RM500,000 |
| Surrender value |
RM500,000 |
| Accumulated cash dividends |
RM500,000 |
| Disability income |
RM10,000 per month |
| Annuity income |
RM10,000 per month |
| Medical expenses |
100% of expenses incurred |
| Refundable prepaid premiums |
100% of amount prepaid |
Table 2: Protected Benefits for General Takaful and General Insurance
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TABLE 2
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GENERAL TAKAFUL/INSURANCE
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| Benefits Protected |
Maximum Limit (Policies/Plans) |
Loss of or damage to property in relation to:
- an immovable property located in Malaysia
- a motor vehicle registered in Malaysia or a foreign registered vehicle insured to drive in Malaysia
- a ship, aircraft or other movable property insured by a citizen or qualified person1
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| Death and related benefits |
RM500,000 |
| Permanent disability |
RM500,000 |
| Critical illness |
RM500,000 |
| Disability income |
RM10,000 per month |
| Medical expenses |
100% of expenses incurred |
In relation to indemnification against claims by a third party:
- loss of or damage to eligible third party immovable or movable property
- death and related benefits
- permanent disability
- illness or bodily injury
- disability income
- medical expenses
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- RM500,000 per property
- RM500,000
- RM500,000
- RM500,000
- RM10,000 per month
- 100% of expenses incurred
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| Refundable prepaid premiums |
100% of amount prepaid |
To be eligible for protection under TIPS, the takaful certificate or insurance policy must be issued in Malaysia by an insurer member and be denominated in Ringgit Malaysia. Any claims of certificate or policy owners will be subject to the conditions and limits specified in their takaful or policy contracts.
1Qualified person includes resident, corporation, statutory body, local authority, embassy, the Government or any State Government, society, trade union, cooperative society, partnership or any other body, organisation, association or group of persons, whether incorporated or unincorporated, in Malaysia.
Q7: What types of takaful and insurance benefits are NOT protected under TIPS?
A: Takaful or insurance benefits not protected under TIPS include takaful certificates and insurance policies denominated in foreign currency and damage to intangible property. The investment portion of investment-linked certificates or policies is not protected, but the takaful and insurance portion of that certificate or policy is covered under TIPS.
Q8: If I have an individual certificate or policy, would my group certificate or policy benefits be protected separately under TIPS?
A: Yes. The benefits protected under your individual certificate or policy and a group certificate or policy will be calculated separately in arriving at the maximum limit. This is because the protection system provides separate limits for different policy owners and beneficiaries, allowing you to enjoy more protection.
Q9: If I have purchased takaful certificates or insurance policies with the same benefits from several insurer members, will all my takaful or insurance benefits be added up for purposes of determining my coverage under TIPS?
A: No. Your takaful and insurance benefits with different insurer members are protected separately. The protected benefits under TIPS will be aggregated only if they relate to the “same insurer member, same risk event, same life insured or insured property, and same takaful certificate or policy owner”.
Q10: How can I know what is protected if I purchased several family takaful certificates or life insurance policies for myself and my family?
A: Each life insured is separately protected. This means even if you have purchased several takaful certificates or insurance policies for different family members from the same insurer member, you will be protected based on your individual family members who are insured. You may refer to this example:
Mr. and Mrs. Tan purchased several life insurance policies for their family from the same insurer member.
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Policy Owner: Mr. Tan
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Policy Owner: Mrs. Tan
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Life insured
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Amount insured (RM)
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Life insured
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Amount insured (RM)
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| Policy 1: Son (Adam) |
200,000
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Policy 4: Son (Adam) |
100,000
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| Policy 2: Daughter (Alice) |
150,000
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Policy 5: Son (Adam) |
50,000
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| Policy 3: Mr. Tan |
600,000
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Policy 6: Mrs. Tan |
400,000
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Death of Adam
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Amount claimable under Mr Tan’s policies
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RM200,000 (Policy 1)
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Amount claimable under Mrs Tan’s policies (RM100,000 + RM50,000)
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RM150,000 (Policy 4 and 5)
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Total amount claimable under TIPS
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RM350,000
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Death of Mr Tan
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Amount claimable under Mr Tan’s policies
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RM500,000* (Policy 3)
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*maximum limit under TIPS
Q11: Can I buy additional insurance to get more coverage for my takaful or insurance benefits?
A: No. Protection for your takaful certificate and insurance benefits under TIPS is not a commercial takaful or insurance policy you can purchase. It is provided by the Government through PIDM. You do not have to register or apply for protection under TIPS since it is provided automatically for eligible takaful or insurance benefits.
Q12: What happens to my takaful certificates or insurance policies if two insurer members merge?
A: Your takaful or insurance benefits will continue to be protected separately until the fulfilment of all obligations by the insurer members, including the payment upon occurrence of a claims event, maturity or surrender of the takaful certificate or insurance policy.
Q13: In the unlikely event of an insurer member failure, how do I claim for my takaful or insurance benefits protected under TIPS?
A: In the event that PIDM is required to resolve a troubled insurer member, we will announce how, where and when payments for your takaful or insurance benefits protected under TIPS would be made. Claims must be lodged with PIDM upon occurrence of the claims event, maturity or surrender of the takaful certificate or insurance policy within a specified time frame. You will be notified of this time frame by PIDM in writing and by newspaper advertisement.
Q14: Who do I contact for further information?
A: Call PIDM's toll free information line: 1-800-88-1266, available Mondays to Fridays from 8.30 am to 5.30 pm or email to: info@pidm.gov.my
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