Advertisement

Insurance Premium: Unfair contract term in Malaysia

497 Views  ⚫  Asked 1 Year Ago
asked on Jan 24, 2017 at 20:23
by   Ying27
edited on Feb 2, 2017 at 07:07
 
I have entered into an advance plan associated with a bank.  The plan required premium to be paid every half year and I failed to pay the another half. I asked to cancelled and refund by they told me they can only refund me 30% of the premium paid.  

The plan lapsed and I decided to take the 30% refund premium but they informed me it's not possible since the plan lapsed.  

Is there any other way to claim for the premium?  As I only entrust my fund for them to invest and now they're telling me I cannot get back a single cents because the plan is lapsed.  

Can I file for a small claims to magistrate court (the premium paid was less than RM5000) for the refund under unfair contract term?  
0 had this question
Me Too
1 favorites
Favorite
[ share ]
6 Answers
answered on Jan 24, 2017 at 21:28
by   Loius
The plan required premium to be paid every half year and I failed to pay the another half.
Which bank is this
What was stated in the T&C for premature termination?
0 found this helpful
Helpful

answered on Jan 24, 2017 at 22:36
by   Ying27
Dear Louis, 

AIA associated with Public Bank. The T&C stated the refund is subjected to their discretion. 
0 found this helpful
Helpful

answered on Jan 24, 2017 at 23:12
by   vkpc
Consumers Tribunal (small claims court ) in Putrajaya does not have jurisdiction over

a. financial services sector and
b. medical services sector

So, you cannot bring a insurance claim dispute to Consumers Tribunal.
0 found this helpful
Helpful

answered on Jan 25, 2017 at 03:23
by   Advocate
edited Feb 2, 2017 at 07:09
 
The plan lapsed and I decided to take the 30% refund premium but they informed me it's not possible since the plan lapsed.

Is there any other way to claim for the premium?  As I only entrust my fund for them to invest and now they're telling me I cannot get back a single cents because the plan is lapsed.

This is normally the case for life insurance policies with cash values. As you have stopped paying for 6months and the policy is now lapsed, it seems like Automatic Premium Loan has kicked. It basically utilises the cash value of your policy i.e. Premium paid to keep your policy active.

If no premium is paid after the grace period is over, a policy that has acquired a Cash Value will be kept active through the Automatic Premium Loan (APL) Provision.
This means that the Cash Value will be used as a temporary means to pay for the premiums in default and thus keep the policy active.

This will continue till either the Cash Value of your policy has been exhausted or you have paid the outstanding dues. After this period, you will lose coverage and have your cash value depleted. 

My two cents, insurance policies are meant to cover your future losses and should only be purchased once you have a stable current flow of income/cashflow. Otherwise, you may not only lose out on future coverage, you will also end up throwing away your hard-earned savings for nothing.
0 found this helpful
Helpful

answered on Jan 25, 2017 at 03:40
by   Ying27
I was told it is a life saving plan when they explained and I was not given the policy book when I signed the one-piece paper contract. The policy book was only posted to my hometown address much later. It was never ever presented to me as an insurance policy.

Before it lapsed, I wrote a letter to appeal for the refund as I only paid the first premium. They told me they would consider the appeal and get back to me. I have spoken my intention to surrender subject to the appeal decision prior the lapse period.

They also never explained to me that if I unable to pay the premium, my fund will be forfeited. Then, when I decided to follow up and surrender, the 30% surrender fees was unable to recover at all. 

In such situation, what else can I do to recover the premium paid?
0 found this helpful
Helpful

answered on Jan 25, 2017 at 15:47
by   Advocate
Hi there, 

These days insurance companies are pairing up with banks to distribute their products via a channel known as bancassurance. Banks receive fee-based incomes as incentives. You won't happen to have bought the famous banca product by AIA+PBB >> Empower Plan? 
https://www.aia.com.my/content/dam/my/en/docs/press-releases/2013/AIA_press_release_20130619.pdf

Anyway, if you sincerely believe that you have been mis-sold, you may try the following to recover the premium paid:
1. Write in a complaint to Public Bank that you have been misrepresented by the sales officer. 
- Provide evidence on your allegation e.g., you had wanted to purchase an investment savings plan and have no idea that this was actually a life insurance plan with long-term commitment
- Cite BNM's requirement on prohibited business conduct - refer to Part C, pg 5-6 (reference made below)

"8.4 In determining whether an FSP is engaging in misleading or deceptive conduct the Bank will consider, among others, the following factors: (a) whether the FSP has met standards issued by the Bank on product transparency and disclosure, and proper advice practices; or (b) the circumstances in which the alleged misconduct occurred, for example the manner in which information was communicated to financial consumers, and whether it was appropriate to the level of financial knowledge and understanding of the person receiving the information."
http://www.bnm.gov.my/index.php?ch=57&pg=140&ac=552&bb=file

Also, based on BNM's Guidelines on Product Transparency and Disclosure, you should have received a product disclosure sheet that looks like this. 
https://www.pbebank.com/pdf/Insurance/PDS_PB-Health-Care_English.aspx
*If you have not received the PDS, PBB has failed to comply to BNM's standards. And this is what you should also harp on to fight for your case. 

- Demand for a 100% refund of your premiums (don't settle for even 30%) > if this is clearly a case of mis-selling by the sales officer, it is possible for you to get a full refund. 

2. Should the above fail, write in to BNM Telelink. They will mediate your case and will take this forward with PBB if need be. 

If this works, write in to the Star under the commentaries section and have your story published so that other consumers will be aware and empowered to make a better decision. 

All the best, keep us posted. 
1 found this helpful
Helpful

Your Answer





By posting your answer, you agree to the privacy policy, cookie policy and terms of service.