What is travel insurance?

This insurance caters to the needs of the traveller. The policy is usually very versatile. It can provide in one package for death, disablement, medical expenses, personal liability, baggage lost, damaged or delayed, loss of personal money, travel cancellation due to accident or sickness, unused travel arrangements due to accidents or sickness and/or delay due to strikes or hijacks.

As the travel insurance package could contain various combinations of these types of protection, it is wise to study the policy to find out what is covered and for how much.

What if I have a Personal Accident policy, do I still need to cover myself for accidents under the travel insurance?

Generally, PA insurance policy will cover for accidents, whether the policyholder is on business or pleasure anywhere in the world. It, however, does not cover illnesses and 'dangerous' sporting activities like parachuting or hang-gliding.

Information on making the right choices when buying insurance

It is important to know what insurance is and what its role is. As a well-informed
insurance consumer, you will not only spend your ringgit wisely but can also save
money in the long run.

What is insurance? The idea is that if a large number of people each pay some money into a pool, then sizeable sums can be drawn from the pool to ease the hardship of those who might suffer losses.

In practice, insurers manage the premium money paid by policyholders. In good years, when claims are few, insurers are able to build up reserves of money to cater for bad years when claims are heavy.

Types of insurance

For the individual, there are many types of insurance available to best meet his needs. It is important for each individual to review his insurance requirements on a regular basis.

Personal Accident

When the policyholder suffers accidental bodily injury or death, the benefits normally provided under a PA policy are:

• Death Benefit pays a lump sum to the policyholder's beneficiary if he dies due to accidental causes

• Permanent Disablement Benefit pays a lump sum to the policyholder should he suffer permanent physical disability rising from accidental bodily injury. Some policies provide a scale of percentages of the lump sum payable, depending on the extent of the disability whilst others only for a specified injury or loss eg loss of an eye or a limb.

• Temporary Disablement Benefit normally makes a weekly payment to the policyholder if he is prevented by injury from working. Most policies limit payments to a specified number of weeks.

• Medical Expenses Benefit pays for the consultation and hospitalisation costs incurred for the treatment of an injury.

Personal liability

A personal liability insurance policy can provide indemnity to the policyholder if he is held legally liable for unintentionally causing damage to property or injury and so, become responsible for compensating the victim.

Most personal liability policies also cover the personal liabilities of the policyholders' family members who reside with him or her.

This policy is intended to protect the man in the street. It does not cover professional liabilities of for examples medical practitioners or lawyers who are liable for loss or damage due to professional negligence. These liabilities are covered by more specialised insurance known as professional indemnity insurance.

Personal Valuables

An 'All Risks' insurance policy is available for items like jewellery, watches, antiques and works of art. This policy can be purchased to cover the valuables on an indemnification or more usually on an 'agreed value' basis against any loss or damage.

This 'All Risks' cover has a list of specified exclusions. Most insurers will demand a valuation before agreeing to insure any items of high value.
Interview with Sin Chew Jit Poh - Page 3

Tips on buying insurance for the individual

• When sourcing for an insurance company, look for one that provide good security, a reputable claims services, reasonable prices and prompt documentation

• If getting the assistance of an insurance agent, make sure that he/she is a PIAM registered agent. There are about 20,000 registered general insurance agents in the country. When selecting an agent, look for prompt, efficient and helpful service.

• Obtain and compare several quotations before committing to an insurance policy.

• After making a decision to purchase a particular policy, read the policy when your receive it. If any item in the document is not in order, the policy holder is advised to query this directly with the insurance company and request the necessary amendments to be made.

• The policy that is purchased is a legal contract and would be required in the event of a claim. Hence, it is preferable to keep this document which lists the insurance taken out and the risks cover in a secure place.

• Pay premiums promptly to avoid lapsing or non-renewal of the policy. Under the Premium Warranty clause, the insured is required to pay the premiums charged for the insurance within 60 days from the effective date of insurance cover (your insurance policy, cover note and/or renewal certificates will show the effective date of cover). If the premium is not paid by the 60th day, the insurance cover will be automatically cancelled from the 61st day.

<< Back to Consumer Education Information