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Bankruptcy (Malaysia) - Can a Bankrupt buy new Insurance Coverage and/or continue with an existing policy purchased before bankruptcy?

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asked on Feb 10, 2019 at 21:23
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edited on Oct 8, 2019 at 16:14
 
Bankruptcy is not to deprive a human being from having insurance coverage. The condition attached is that once adjudicated a Bankrupt, he/she must report in to JIM (Jabatan Insolvensi Malaysia) to go through the Case Management Program. Then seek permission from the DGI (Director General Insolvency) to purchase a new Life Insurance Policy (with no cash out value) with the Nominees being the spouse and/or children. The spouse should be Policy Holder and the bankrupt's life is the person insured. However it also depends on the policy of the insuring company whether to accept applications from a Bankrupt. Declaration of the bankruptcy status is most important. Some companies may accept with additional loading of premiums.

For existing Life Insurance policies, the Bankrupt should assign the Policy to the spouse and/or children. This can be done with the written consent from the DGI. It is prudent to check with the insuring company on this assignment policy. The other condition is that there should be proof of the future premiums being paid by the spouse. After the case management period is over, then apply for a successful Discharge of Bankruptcy and things will go back to normal.

Any cash value, surrender value, maturity value of a Life Insurance Policy is regarded as an asset. If the cash value is substantial, the DGI can terminate and "cash out" to use it to repay Proof of Debts Creditors (case to case basis). The DGI can seek to recover from Life Insurance Policy so it would be prudent to seek permission from the DGI to continue with an existing policy purchased prior to bankruptcy. Assigned Life Policy is Creditor Proof, just like EPF and SOCSO (PERKESO) disability payments.
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answered on Feb 10, 2019 at 21:58
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edited Oct 8, 2019 at 16:07
 
What if a bankrupt doesn't have children and doesn't like the spouse?
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answered on Feb 10, 2019 at 23:30
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edited Oct 8, 2019 at 16:36
 
@Chris Lim,

If the Bankrupt is not happy with the spouse and does not want the spouse to gain anything from the death of the bankrupt, then terminate the Policy on his/her own accord. The insurance company would be glad to do it immediately.
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answered on Feb 11, 2019 at 10:35
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edited Oct 8, 2019 at 17:19
 
@Chris Lim,

Are you the same Chris Lim as in this user profile:
https://www.lawyerment.com/answers/users/3311/chris-lim 

Or there is another same name id?

Many thanks and appreciate your reply. If you give reply with your registered profile (must log in first), I can give you further comments via email.
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answered on Mar 16, 2019 at 16:11
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edited Oct 8, 2019 at 17:20
 
@jeff005,

I just realised someone did use same ID or stole my ID to post the above.... I didn't do that....
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answered on Mar 16, 2019 at 16:14
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edited Oct 8, 2019 at 17:21
 
So if I have insurance policy, I should assigned all now before bankruptcy? Sounds very scary that Jabatan Insolvensi Malaysia can just terminate my policy to take all the money.... I have both life + medical + investment insurance.... I can't terminate or else what will happen if I fall sick.... right? 
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answered on Mar 16, 2019 at 18:18
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edited Oct 9, 2019 at 23:47
 
@Chris Lim,

Read properly the above properly again starting from...

Bankruptcy is not to deprive a human being from having insurance coverage.

Get a Grip of yourself and read knowledge in a correct perspective before you mentally kill yourself by over-reading..!!
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answered on Mar 17, 2019 at 10:55
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I'm getting very confused.............
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answered on Aug 18, 2019 at 20:41
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New Related Topic of Discussion

https://www.lawyerment.com/answers/questions/13457/assign-life-insurance-policy-after-bankruptcy
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answered on Aug 20, 2019 at 18:56
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edited Aug 20, 2019 at 18:57
by   jeff005
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answered on Aug 20, 2019 at 18:57
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