including types of insurance policies and deciding on how much coverage you need.

1. All policies fall into one of two camps.

There are term policies, or pure insurance coverage. And there are the many variants of whole life, which combine an investment product with pure term insurance and build cash value.

2. Insurance is sold, not bought.

Agents sell the vast majority of life policies written in the U.S. because the life insurance industry has a vested interest in pushing high-commission (and high-profit) whole-life policies.

3. Whole life is expensive.

Policies with an investment component cost many times more than term policies. As a result, many people who buy whole life often can't afford an adequate face value, leaving themselves underinsured.

4. Whole-life policies are built on assumptions.

The returns quoted by the agent are simply guesses - not reality. And some companies keep these guesses of future returns on the high side to attract more buyers.

5. Keep your investing and insurance strictly separate.

There are better places to invest - and without the high commissions of whole-life policies.

6. Buy enough term coverage to fill your needs.

Life insurance is no place to skimp, especially with rates at historic lows.

7. Match the term of the policy to your needs.

You want the policy to last as long as it takes for your dependents to leave the nest - or for your retirement income to kick in.

8. Buy when you're healthy.

Older people and those not in the best of health pay steeply higher rates for life insurance - so buy as early as you can, but don't buy until you have dependents.

9. Tell the truth.

There's no sense in shading the facts on your application to get a lower rate. Be assured that if a large claim is made, the insurance company will investigate before paying.

10. Use the Web to shop.

Buying life insurance has never been easier, thanks to the Internet. You can get tons of quotes - and avoid the pushy salespeople.

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Insurance companies brace for global crisis

INSURANCE companies are strengthening their capabilities and adopting a prudent investment strategy to cushion the impact of the global financial turmoil.

Although the financial crisis has not hit the local insurance industry, insurers are not taking any chances in the event the crisis prolongs and begins to dent bottomline.

Allianz Malaysia Bhd (AMB), among others, is tapping on the group’s worldwide best practices to face the financial tsunami rocking credit markets.

Chief executive officer (CEO) Alexander Ankel said: “As part of an international group, AMB has access to numerous best global practices. These include underwriting, claims, investment, information technology and all other relevant operational processes, hence our risk management environment is very strong.

“This puts us in a position to master downward cycles and trends and to ensure we will continue to meet and exceed the expectations of agents, customers, distribution partners and business partners.”

According to Ankel, AMB also hopes to streamline both its general and life businesses within the next 20 months to further beef up its capabilities and competency.

This, he said, would create a more customer-centric organisation and help to convey the group’s best practice to the local market.

AMB, via subsidiary Allianz General Insurance Co (M) Bhd (AGIC), is now the country’s second largest general insurer with a market share of close to 10% after its consolidation with Commerce Assurance Bhd (CAB) last year.

Despite the challenging market environment, AGIC’s gross written premiums grew 33.2% to RM748.6mil in 2007 from RM561.9mil in 2006. Its life insurance operations, through subsidiary Allianz Life Insurance Malaysia Bhd, charted a 20.6% growth in written premiums to RM594.6mil last year.

AMB reported a group net loss of RM2.61mil last year mainly due to exceptional expenses and costs relating to the acquisition of CAB as compared with a net profit of about RM35mil in 2006.

The group currently has more than 9,000 agents (general and life), over 30 general insurance and 18 life insurance branches.

Manulife Insurance (M) Bhd president and CEO Peter Robertson said the key to cushion the impact of the credit crunch in the financial services sector was to have a good risk management system and practices.

“Our risk management practices cover three key areas: product design, investment management and asset liability management. For product design, we rigorously assess the pricing basis and the cost of any guarantees before launching products.

“Investment management pertains to the way we review credit and asset liability management is the combination of the above two practices,’’ he said.

Manulife’s new business premiums last year stood at RM71.3mil against RM50.2mil in 2006. Its net profit for the second quarter stood at RM30.5mil.

Last year, the company posted a net profit of RM85mil compared with RM50.7mil previously. Its total agency count as at September this year stood at 1,438.

Ankel said AMB has adopted a prudent investment strategy backed by well defined investment mandates, guidelines and limits in view of the current financial crisis.

The credit crunch had minimal impact on the company as its exposure in the local stock market had been reduced substantially and its foreign investment was only limited to its unit linked funds, Ankel noted.

Manulife, Robertson said, maintained very strict credit criteria for evaluating investments be it fixed income or equities. “In times like these the benefits of such conservatism comes to the fore.”

Hong Leong Assurance Bhd (HLA) group managing director and CEO Charlie E. Oropeza said the company’s investments were mainly in the local markets and did not have exposure to collateralised debt obligations and other exotic instruments.

Oropeza added HLA’s investments were well diversified and exposure to the equity market had been kept to a minimum and in sound dividend-yielding stocks.
Source from: The Star, 20 October 2008, By DALJIT DHESI

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Guide to Motorcycle Insurance

But wait!! There are some answers you’ll want to have ready once you’re talking insurance plans and rates with an agent. Here, a little preparation goes a long way in making the best impression (which results in an ideal rate) on an insurance agent. Know what they’ll ask before you pick up the phone.

1. Your Personal Liabilities
Just like with Auto insurance, your age and your driving record are key factors. Auto accidents do count when buying motorcycle insurance. If you’re older but a first-time rider, you will likely have a higher rate. However, you might be able to offset that by investing in special DMV or motorcycle classes – just be sure to hang on to your certification for proof.

2. They know where you live
Working or living in a high crime/ high accident area can affect your rate. Have a plan for how you’ll store the bike. A garage, an alarm, or any other form of security for your parked bike is necessary no matter where you live. A bike that spends most of it’s time in an open, unsecured area is clearly a risk for any insurance company to take on.

3. The Bike
Just like in auto insurance, that glitzy, brand-spankin’ new model is going to cost more to insure that an older stock bike.

4. How much you ride
If you live in the part of the country that has a definite riding ‘season’, make this apparent to your agent. By only using your bike for half the year, your mileage stays low and your rate usually will follow suit.

5. Lastly, avoid over-insuring, since you’ll never get more than the market value of your bike in the event of an accident.
Bear in mind that the rate is not based solely on your bike, but also your lifestyle, your riding habits, and your history. Once that is out of the way, you need to pick an insurance plan.

3rd Party Liability: Insurance that covers other people and their property in the event of an accident that is your fault. Instead of you personally paying for the damage to the other party’s property, your insurance pays the bill. It doesn’t cover damage to you or your property. Most states require you to have at least liability insurance on your bike.

Full Coverage Insurance: (also called “comprehensive”) is available in different amounts, and will cover you and your property in an accident, whether the event was your fault, someone else’s, or “no-fault”. Full coverage also extends to any passengers on your bike present in the accident.

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