CHAPTER 5

GENERAL, LIFE , MEDICAL

AND HEALTH INSURANCE
PRODUCTS

COURSE LEARNING OUTCOME

Topics covered under this chapter

The financial loss in consequence

of an unfortunate incident such as
fire, death, loss of money,
sickness etc can be overcome is
through the purchase of
INSURANCE.

Compare the features of general

insurance & life insurance

 Motor Insurance in Malaysia is regulated

by the Road Transport Act 1987 as
amended from time to time.
Part IV of the Acts provides that every
motorist must insure, with an authorized
insurer, any liability which he may incur in
respect of the death of or bodily injury to a
third party caused by arising out of the use
of the motor vehicle on a road.

subdivision of
commercial
vehicles under
the Motor
Tarif

 This form of cover provides the minimum form of

indemnity required by the Road Transport Act
1987, also known as Act cover.
The cover required in respect of;
Legal liability for death or bodily injury to any
third party person (excluding passengers)
caused by arising out of the use of the insured
motor vehicle on a road.
Expenses reasonably incurred for hospital
treatment for injured persons.

 This form of cover provides act only cover plus for

liability to third party property loss or damage
This is normally the lowest policyholder option and
the cover will not be provided for loss or damage to
insured vehicle and is restricted to;
damage to property of third party
legal liability for death and bodily injury to third
party
hospital and emergency treatment fees for
injuries to third party

 In addition to the cover granted by

the third party only policy, this policy
also provides cover for loss of or
damage to the insured vehicle as a
result of fire or theft.

 It covers both parties property and

liability.
the coverage under this cover is
divided into two main sections, namely;
Section A - loss or damage to insured
vehicle
Section B - liability to third parties

EXTENSIONS AVAILABLE

*whilst the
vehicle is being
used for official
purpose

WHO ARE THE LUCKY

PERSON TO ANSWER MY
QUESTIONS??? HEHEHEHE

FIRE INSURANCE

Basic cover
A fire policy provides cover against loss of or damage
to buildings (of factories, shops, offices, private
dwellings, etc.), and contents (for example, furniture,
fixtures and fittings, plants and machinery, office
equipment, stocks in- trade, personal effects and
household goods) caused by the following perils:
Fire
Lightning and
Explosion of gas used for illuminating and
domestic purposes only

Exclusions

Exclusions

Exclusions

The houseowners insurance policy can be extended to include the

following perils at additional premiums:

WORKMENS COMPENSATION INSURANCE

Impose a liability on the employer to pay compensation on a
prescribed scale to an employee who is injured or killed in an
accident or due to illness or disease arising out of and in the course
of employment
The insurer will also indemnify the insured against all costs and
expenses incurred with the insurers consent in defending any claim
for such compensation
Employers should be encouraged to affect Workmens
Compensation Insurance for their employees unless they are
covered under SOCSO.

FOREIGN WORKERS COMPENSATION SCHEME (FWCS)

All legal foreign workers (excluding expatriates) must be covered
under a separate FWCS
It requires every employer employing foreign workers to insure with
the panel of insurance companies appointed under this order and to
effect payment of compensation for injuries sustained from accidents
during and outside working hours.
The FWCS was created to protect the interest and welfare of all
foreign workers in Malaysia.
The policy provides for the payment of compensation benefits to a
foreign worker who possesses valid employment document for
personal injury sustained due to accident or disease contracted
which arose out of or in the course of employment or if the death
results from accident.

EMPLOYERS LIABILITY INSURANCE

The policy provides protection to the Insured against his legal
liability at common law of damages and cost bodily injury or
diseases to employees arising out of and in the course of their
employment.
The policy is restricted to damages payable in respect of injury and
does not pay for damage to an employees property.
EXCLUSIONS
insureds liability to employees of contractors
contractual liability
injury sustained outside geographical area covered by policy
liability under the Workmens Compensation Ordinance 1952
war risks
nuclear risks

PUBLIC LIABILITY INSURANCE

The insurance is designed to cover the legal liability of the Insured
in respect of accidental bodily injuries and/ or property damage to
third parties arising in connection with the Insureds business.
This policy also provides for all costs and expenses of litigation
incurred with the insurers consent.
EXCLUSIONS
Liability that can be insured under the Workmens Compensation
Policy, Employers Liability Policy and SOCSO scheme
Loss or damage to property belonging to the insured or under the
insureds charge or control
loss or damage to property associated with steam boiler or any
boiler vessel or apparatus

PROFESSIONAL INDEMNITY INSURANCE

Professional people may in their course of business cause financial
or personal injury to their clients or others by their own neglect or
error or perhaps even more importantly, by the neglect or error of
their employees or partners.
Examples of the type of professions afforded under the policy are
solicitors, accountants, architects and surveyors, insurance brokers,
doctors, dentists and other medical practitioners.
The policy covers the Insured for breach of professional duty by
reason of any negligent acts, negligent error or negligent omission
committed by the Insured, their predecessors and any person
employed by the Insured in their professional capacity.

PROFESSIONAL INDEMNITY INSURANCE

EXCLUSIONS
o for libel or slander
o arising out of dishonesty, fraud, criminal
o malicious act or omission by the Insured, or his
predecessors or employees
o arising from contamination by radioactivity
o which the insured is entitled to indemnify under any other
policy

PRODUCT LIABILITY INSURANCE

Provides cover to a manufacturer or seller against his legal liability
for death or injury or damage to property caused by defects in the
goods supplied or sold by him.
Examples of products that may give rise to product liability include
electrical appliances, machinery, pharmaceutical products,
cosmetics and toys.
The cover includes legal costs incurred by the firm with the
insurers prior consent
EXCLUSIONS
Injury to employees
Contractual liability unless such liability would have attached in the
absence of any contract
liability arising in respect of wrong formula or specification of
products
Loss or damage to products supplied or sold arising out of repairs
or alteration works on the products.

BURGLARY INSURANCE
A burglary insurance policy provides cover against loss of or damage
to the contents on a business premises for example, stocks and
materials-in-rade, furniture, office equipment, plants and machinery,
household goods and personal effects of employees.
following theft involving entry to or exit from the insured premises by
forcible and violent means.
the policy also covers damage to the insured building and contents
consequent upon such theft or attempt thereat.

BURGLARY INSURANCE
Types of cover available:

BURGLARY INSURANCE
Exclusion (loss or damage caused by/to):
Fire
stained or plate glass or any decoration or lettering thereon
to deeds, bonds, bills of exchange, promissory notes,
money or securities of money, coins etc
riot, strike, war and kindred risks or confiscation or
destruction by order of any government or public authority
volcanic eruption, subterranean fire, earthquake etc
nuclear risks.

ALL RISKS INSURANCE

The scope of cover for an all risks policy is very wide and it covers
against all risks, namely fire, theft and all accidental causes.
The all risks policy is normally issued to cover for valuables such as
jewelleries, watches, cameras, paintings and works of art.
The amount to be insured should be based on the market value or
an agreed value

ALL RISKS INSURANCE

Exclusions (loss or damage consequent upon):
oriot, strike, civil commotion, earthquake or volcanic eruption;
owar and kindred risks;
owear and tear, depreciation, gradual deterioration, moth, vermin;
oscratching and breakage of lenses, glass or other brittle substances,
mechanical or electrical breakdown;
oconfiscation or detention by customs or other official authorities;
onuclear risks.

MONEY INSURANCE
A money insurance policy provides cover for loss of money against
all risks while:
in transit between the insureds premises and the bank;
on the insureds premises during business hours;
in a locked safe or strongroom on the insureds premises out
of business hours;
in the private residence of any principal or director of the
insured;
other specified situations.
The policy also provides cover for:
the cost of repair or replacement of the safe or strongroom if
the items are not specifically insured
compensation to employees who may be injured during a
robbery whilst accompanying or carrying/transit of monies.

MONEY INSURANCE
Exclusions (The policy is not liable for any loss arising from ):
the dishonesty of an employee;
confiscation, nationalization, requisition or wilful destruction by any
government authorities;
shortages due to error and omission;
outside the territorial limits;
safe or strongroom following the use of key;
nuclear risks;
riot, strike, war and associated risks.

GOODS IN TRANSIT
A goods in transit policy provides cover on an all risks
basis, indemnifying the insured for loss of or damage to
goods by fire, accident, theft or pilferage while being
loaded on, carried by, or unloaded from the motor vehicles
and their trailers, and while temporarily garaged during
transit anywhere in Malaysia.
Transit which carried out on an international basis, or
where any sea or air transit is involved, the goods should
appropriately be covered under marine insurance.

GOODS IN TRANSIT
Exclusions:
radioactive contamination;
war, riot and civil commotion;
earthquake and subterranean fire;
moth, vermin, insects, damp, mildew or rust;
delay, loss of market, consequential loss of any kind;
deterioration and changes by natural cause;
Theft or pilferage which involves the insureds employees;
goods accompanying commercial travellers;
property not covered (explosives, acids, cash, bank and
currency notes, securities, jewellery etc

The term insurance policy provides protection on the life

of the individual for a specified number of years.
Sum insured is only payable if death occurs within a
specified number of years, nothing is payable if he
survives till the end of the term.
If the life assured survives the term, the policy will be
expiring
Features;
Low initial premium due the fact that the protection is
temporary
Protection for a specified period of time.
May be renewed for successive periods or may be
converted to permanent contracts.
Premium increases with each new term.
A minimum cash value is available for term policies
beyond duration of 20 years.

 Provides for the payment of sum assured (and

bonus if any) upon the death of the life insured
during the term of the policy or upon the survival
of the policyholder at the end of the term.
For example, a 20 year Endowment policy
provides payment of sum assured at the end of
the 20th year or if the insured dies within the 20
years period of endowment.
This type of policy not only provides cover against
death but also includes provision for savings.
At the end of an agreed period of time, a lump
sum is received. This amount comprises of the
premiums paid plus bonuses.

 Provides for the payment of sum assured (and

bonus if any) upon the death of the life assured
upon reaching certain age such as 85, 90 or 100
years.
Premiums payments are normally paid
throughout life. However, there are policies
which have a limited premium payment period.

Features;
Protection for life
Fixed premium
Growing cash value
Higher initial premium than term assurance
Should be purchased with the intention of
keeping for life or a long period of time.

 An annuity may be defined as a periodic

payment made during a fixed period of time or
for the duration of the survival of a designated
life (the annuitant) or lives.
If the annuity payments are made during the
lifetime of the annuitant, the contract is known as
a life annuity.

Medical And Health Insurance Products