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Frequently Asked Questions (FAQs) |
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Q: 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 and insurance benefits in the unlikely event of an insurer member failure. In the event an insurer member fails and is unable to honour takaful or insurance benefits protected under TIPS, PIDM will make a payment to the takaful certificate or insurance policy owners.
Q: Which takaful operators and insurance companies are member institutions of PIDM?
A: All takaful operators licensed under the Takaful Act 1984 to conduct family 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.
For insurer members in Peninsular Malaysia
For insurer members in Sabah
For insurer members in Sarawak
Q: Which institutions are not insurer members of PIDM?
A: The following institutions are not insurer members of PIDM:
• Reinsurance and retakaful companies
• Captive insurers and specialist insurers
• Offshore insurance companies
• International takaful operators licensed under the Takaful Act 1984
• Other players in the insurance industry, such as insurance brokers, insurance adjusters and insurance agents
Q: Must I apply or register for TIPS protection?
A: No, you do not need to apply or register. You are automatically protected.
Q: Are all takaful certificate and insurance policy owners eligible for protection under TIPS?
A: Takaful certificate or insurance policy owners eligible for protection under TIPS include individuals, sole proprietors, partnerships, trade unions, registered societies, cooperatives, registered charities and corporations.
Q: 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
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Maximum Limit (Individual or Group Policies/Plans)
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Death and related benefits
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RM500,000
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Permanent disability
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RM500,000
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Critical illness
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RM500,000
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Maturity value (excluding unit portion of investment-linked policies)
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RM500,000
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Surrender value
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RM500,000
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Accumulated cash dividends
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RM100,000
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Disability income
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RM10,000 per month
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Annuity income
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RM10,000 per month
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Medical expenses
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100% of expenses incurred
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Refundable prepaid premiums
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100% of amount prepaid
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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
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Maximum Limit (Policies/Plans)
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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 resident of Malaysia, permanent establishment or embassies in Malaysia
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Death and related benefits
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RM500,000
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Permanent disability
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RM500,000
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Critical illness
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RM500,000
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Disability income
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RM10,000 per month
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Medical expenses
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100% of expenses incurred
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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
- RM500,000
- RM500,000
- RM10,000 per month
- 100% of expenses incurred
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Refundable prepaid premiums
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100% of amount prepaid
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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.
Q: 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 insurance and takaful portion of that plan or policy is covered under TIPS.
Q: 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.
Q: 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”.
Q: 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)
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200,000
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Policy 4: Son (Adam)
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100,000
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Policy 2: Daughter (Alice)
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150,000
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Policy 5: Son (Adam)
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50,000
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Policy 3: Mr Tan
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600,000
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Policy 6: Mrs Tan
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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) *maximum limit under TIPS
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Q: Can I buy additional insurance to get more coverage for my takaful or insurance benefits?
A: No. Protection for your takaful 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.
Q: What happens to my takaful certificates or insurance policies if two insurer members merge?
A: The 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.
Q: In the unlikely event of an insurer member failure, how do I claim for my takaful or insurance benefits protected under TIPS?
A: You do not have to file a claim. In the event that PIDM is required to resolve a troubled insurer member, we will announce how, where and when we will make payment to takaful certificate or insurance policy owners for their takaful or insurance benefits protected under TIPS. PIDM will pay takaful certificate or insurance policy owners based on the records of the takaful operator or insurance company.
PIDM may also arrange for transfer of takaful certificates or insurance policies from the failed insurer member to another insurer member to secure continuity of coverage for takaful certificate or insurance policy owners particularly in the case of family takaful or life insurance.
Q: 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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