Life is Precious

What is Insurance

noreply@blogger.com (Unknown) — Mon, 13 Jul 2009 10:45:00 +0000

Insurance is the transfer of risk by an individual, such as yourself, or an organisation, such as your business, to the insurance company. You or your organisation will thus be known as the policy owner. The insurance company receives payment in the form of premium and will compensate you in the event of losses or damages sustained by you.

Takaful is a protection plan based on Shariah principles. By contributing a sum of money to a common takaful fund in the form of participative contribution (tabarru’), you undertake a contract (aqad) to become one of the participants by agreeing to mutually help each other, should any of the participants suffer a defined loss. Both insurance and takaful have similar basic principles. For instance, the insured, such as yourself, must have a legitimate financial interest in the risk you are insuring, meaning you must suffer a financial loss when the insured event occurs.You can also buy more than one policy or plan to protect a particular risk but in the event of loss or damage, you can only make one claim. The amount payable will then be contributed by the insurance companies involved. As such, you cannot profit from your general insurance policy or takaful plan. If you suffer a loss, you will be compensated accordingly and no more than that. You will be paid or ‘indemnified’ to the position you were in before the loss. However, if you wish to cover your life, you can buy more than one policy.Your insurance or takaful contract is a contract of utmost good faith (trust). Thus, you as the policy owner need to disclose all material information required. If any of the relevant material facts are not disclosed, the policy may be invalid and you will not be protected against any loss or damage.In addition, under the takaful plan, you can enjoy a share of the surplus from the takaful fund, based on a pre-agreed ratio if you have not made any claim during the year.

Tax relief for Insurance

noreply@blogger.com (Unknown) — Mon, 12 May 2008 12:56:00 +0000

A taxpayer can enjoy a tax relied of up to RM6,000 for his combined contribution to EPF and life insurance, and a total of RM3,000 for medical and child education policy.

Life insurance

Examples of life insurance are whole life insurance and investment-linked insurance which give protection up to age 80, 90 or 100, endowment insurance which matures after certain year like 20 years, 25 years or at age 50, 55 or 60.

Tax relief for an individual’s life insurance is very clear cut. You pay the premium and you enjoy the tax relief.

But tax relief for life insurance bought by husband for wife, or wife for husband is quite confusing for many policy holders. If the husband is the payer, the insurance premium paid is qualified for tax relief under the husband’s name and vice verse.

The insurance premium paid by the husband or wife is commonly termed as payer benefit rider, payer benefit rider or spouse benefit rider.

In the situation where a husband doesn’t have any income, he can opt for combined assessment. In this case, whatever takaful or life insurance premium paid by the husband is considered paid by the wife. He is entitled for RM3, 000 of spouse relief.

Life Insurance

noreply@blogger.com (Unknown) — Mon, 12 May 2008 02:50:00 +0000

Buying life insurance for you and your loved ones helps provide some financial security in times of hardship. The money from your policy will be paid to your loved ones when you pass away or to you should you suffer a total and permanent disability or loss.

WHY SHOULD I BUY LIFE INSURANCE?

-To ensure that your immediate family has some financial support after your demise
-To finance your children’s education
-To have a savings plan for the future so that you have a constant source of income after retirement
-To ensure that you have extra income when your earnings are reduced due to serious illness or accident