A: The Takaful and Insurance Benefits Protection System (TIPS) is a system established by the Government to protect owners of takaful certificates and insurance policies from the loss of their eligible takaful or insurance benefits in the event that an insurer member fails and is unable to honour the takaful or insurance benefits. TIPS is administered by PIDM.

A: All takaful operators licensed under the Islamic Financial Services Act (IFSA) 2013 to conduct family and/or general takaful business in Malaysia, as well as insurance companies (including locally incorporated subsidiaries of foreign insurance companies operating in Malaysia) licensed under the Financial Services Act (FSA) 2013 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.

Takaful operators and insurance companies which are member institutions of PIDM are referred to as ‘insurer members’. Look out for this membership sign at the entrance to the offices of your takaful operator or insurance company.

PIDM Decal
PIDM-Decal.jpg

A: The following institutions are not insurer members of PIDM:
  • Reinsurance companies and retakaful operators
  • International takaful operators licensed under the Islamic Financial Services Act (IFSA) 2013
  • Financial guarantee insurers such as Danajamin Nasional Berhad
  • Offshore insurance companies
  • Other players in the insurance industry, such as insurance brokers and adjusters

A: No, you do not need to apply or register. You are automatically protected for eligible takaful and insurance benefits.

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.

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 Takaful and Life Insurance
 
TABLE 1
FAMILY TAKAFUL / LIFE INSURANCE
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 RM100,000
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
 
TABLE 2
GENERAL TAKAFUL / GENERAL INSURANCE
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
  • RM500,000 per property
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
  
  • RM500,000 per property

  • RM500,000
  • RM500,000
  • RM500,000
  • RM10,000 per month
  • 100% of expenses incurred
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 by 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.

A: Examples of takaful or insurance benefits not protected under TIPS include takaful certificates and insurance policies denominated in foreign currency, as well as pecuniary loss incurred due to acts of dishonesty by employees and damage payable for professional negligence. The investment portion of investment-linked certificates or policies is not protected, but the takaful and insurance portion of that certificate or policy is protected 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.

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”.

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 each individual family member who is insured. You may refer to this example: 

Mr. and Mrs. Tan purchased several life insurance policies for their family from the same insurer member.
 

Policy Owner: Mr. Tan

Policy Owner: Mrs. Tan

Life insured

Amount insured (RM)

Life insured

Amount insured (RM)
Policy 1: Son (Adam)
200,000
 Policy 4: Son (Adam)
100,000
Policy 2: Daughter (Alice)
150,000
 Policy 5: Son (Adam)
50,000
Policy 3: Mr. Tan
600,000
 Policy 6: Mrs. Tan
400,000

Death of Adam

Amount claimable under Mr Tan’s policies

RM200,000 (Policy 1)

Amount claimable under Mrs Tan’s policies (RM100,000 + RM50,000)

RM150,000 (Policy 4 and 5)

Total amount claimable under TIPS

RM350,000

Death of Mr Tan

Amount claimable under Mr Tan’s policies

RM500,000* (Policy 3)

*maximum limit under TIPS

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 as it is provided automatically for eligible takaful or insurance benefits.

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.

A: If an insurer member fails and is unable to honour the takaful or insurance benefits under TIPS, PIDM will make a payment of the protected benefits to the certificate or policy owners upon occurence of the claims event, maturity or surrender of the takaful certificate or insurance policy.

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 policies owners.

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.

 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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PIDM protects your deposits in the bank as well as your takaful and insurance benefits in the unlikely event of a failure of a member bank or a takaful operator / insurance company.

CONTACT DETAILS
  • Level 12, Axiata Tower,
    No. 9, Jalan Stesen Sentral 5,
    Kuala Lumpur Sentral
    50470 Kuala Lumpur
     
  • For mailing purposes:
    P.O.Box. 13071
    50798 Kuala Lumpur
     
  • Tel: +603 2173 7436 / 2265 6565
  • Fax: +603- 2173 7527 / 2260 7432
  • Toll Free: 1-800-88-1266
  • Email: info@pidm.gov.my
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