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Travel Insurance Buying Guide

• Part 1: Need for Travel Insurance
• Part 2: Claims You Can Make
• Part 3: Not Covered
• Part 4: The Eligibility
• Part 5: Compensation and Satisfaction

Travel-savvy Malaysians today go all over the country to the various resorts as well as to other countries. There is nothing like visiting new places to broaden our minds and have fun at the same time.

But no matter how exciting travel may be, there are still certain precautions we should take as we will be stepping into new and unfamiliar places.

A good way to protect yourself should you encounter problems that crop up during your travels is to buy travel insurance.

Over the next five weeks, we will be giving you tips on travel insurance, from choosing a policy to making insurance claims. We start by telling you why you should purchase travel insurance and how to go about it.

Why Buy
While travel can be an exciting proposition, there could be situations where things may go wrong and travellers find themselves needing, for example, urgent medical assistance, help with replacing lost luggage or assistance with making an urgent trip home. Travel insurance is designed to protect you and your family against travel-related accidents, losses or interruptions. Always include travel insurance as part of your travel budget and enjoy peace of mind.

Insurance is essential. Not ensuring you are safely covered on your vacation is a matter of being penny wise, pound foolish. Do not think “it won’t happen to me” – especially if you are planning an adventure-filled vacation.

Choosing A Policy
First, make sure the policy you intend to buy covers those countries you plan to visit and that it is for the full period of travel. It also helps if the insurance is recognised internationally or at least in the countries you are visiting.

Make sure that your insurance company has a good network of foreign affiliates who can provide you with the assistance you may need. Many insurers provide worldwide assistance services. Check whether your insurance company provides you with a hotline number for emergency assistance in multiple languages in travel advice, emergency messages and medical referral.

If you are travelling with your family, make sure everyone is included in the policy. Most policies will specify who qualifies as a member of the family under the insurance cover.

If you have a medical history, it is important that you tell your insurer. You may invalidate your policy if you fail to disclose what is commonly known as a “pre-existing condition” to your insurer at the time of proposing for travel insurance.

Like all purchases, you usually get what you pay for, so do not compare the prices only; take into account the benefits and the exclusions of the cover.

If you intend to take part in extreme activities like winter sports, mountaineering, bungee jumping or scuba diving, check the policy as most standard policies will not provide such cover. You may want to discuss with your insurer on the possibility of extending the policy to cover such activities.

For more details, contact Persatuan Insurans Am Malaysia (Piam) at 03-2274 7395/9, fax 03-2274 5910

via NST Travel Online

by David Masters, InsuranceDaily.co.uk

Ed Liddy, CEO of embattled US insurer American International Group (AIG), is to receive an annual wage of $1 this year and next because of voluntary restrictions placed by the company on executive compensation.

AIG’s seven most senior executives will not receive bonuses for 2008, whilst fifty executives have had their salaries locked until the end of 2009.

AIG was rescued from the brink of collapse earlier this year by a $150 billion loan from the US government.

A funding structure is being developed to ensure that no taxpayer money is used to pay executive bonuses or cash performance awards.

The changes in executive pay structure follow a request earlier this month from New York Attorney General Andrew Cuomo for AIG to disclose its plans on executive bonuses and pay increases.

Cuomo called Liddy’s decision to freeze executive pay a ‘positive step’.

Executive salaries are a hot topic across America at the moment as banks are blamed for the financial crisis and the collapse of the global economy.

Cuomo said he will now press other Wall Street firms who have benefited from government bailout money to reveal their executive pay structure plans.

by Gill Montia, www.insurancedaily.co.uk

Prudential has announced that it is reducing final bonus rates on its with-profits policies by between 5% and 10%

The insurer says it is responding to the downturn in world markets and the continued poor investment environment.

However, Pru’s with-profits funds have been holding up relatively well during the credit crisis and some policyholders will see a 3% year-on-year rise in the value of their investments, while a fall of up to 2% is forecast for others.

According to the company’s chief actuary, David Belsham, Pru’s with-profits funds have been managed to provide fair bonus rates during a market downturn and policyholders will see only a small change in their year-on-year policy values.

Customers who need to surrender their policies before maturity will continue to pay exit penalties that are individually assessed. These are likely to average around 4%.

Policyholders with with-profits endowments, with-profits annuities and individual pensions taken out before May 1987 are not affected by any of the changes and investors who have held a policy for five years or more can still withdraw up to £25,000 during any 12 month period, without incurring an exit penalty.

Pru has one of the UK’s strongest with-profits funds which contained a surplus of £6.2 billion at the end of September.

by David Masters, www.insurancedaily.co.uk

American Life Insurance Co (Alico), an international life insurance branch of American International Group (AIG), may be acquired in part by a group of China-based investors.

AIG is currently on an asset selling spree to raise funds to pay off a $152 billion bailout loan from the US Federal Reserve.

However, AIG wants to keep boardroom control of Alico, meaning that it must retain at least a 51% stake in the company.

Selling a 49% stake in American Life Insurance Co (Alico) would raise between $5.3 billion and $10.6 billion for AIG.

AIG spokesperson Joe Norton refused to comment on the negotiations.

China Investment Corp (CIC), the wealth fund engaged in merger talks with AIG, believes that if China and other developing countries help to rescue the world’s financial system, they should be given more of a say in how the world’s economy functions.

Jin Liqun, chairman of CIC’s supervisory board, said the fund – which manages part of China’s $2 trillion foreign exchange reserves – will not be put off foreign investments by the current turmoil in global financial markets.

by Rupinder Singh, Business Times

Insurance group CIMB Aviva Malaysia has offered a voluntary lay-off scheme to its permanent employees, one of the earliest to do so since the economic slowdown.

An industry source said that about 200 of the group’s conventional insurance and takaful unit employees had accepted the voluntary separation scheme (VSS), offered last month.

It is learnt that CIMB Aviva has about 550 employees.

News of the VSS scheme is a worrying sign amid the global financial crisis. Already, there are rumours that a similar scheme may be offered at another local insurer as the slowing economy hurts business.

CIMB Aviva told Business Times that the VSS was part of a restructuring exercise. This will lead to its focusing on the life and family takaful business, distributed through a bancassurance partnership with CIMB Bank.

“This VSS is a a direct component of the business restructuring exercise, which will give CIMB Aviva much greater focus and efficiency in the future,” it said in an e-mail reply.

Effectively, its Islamic insurance unit, CIMB Aviva Takaful Bhd, will now stop all motor and commercial lines business.

“This will see CIMB Aviva focusing its general insurance business on personal accident and retail fire,” it said.

CIMB Aviva Takaful said that existing policyholders should not worry.

“Customers can rest assured that CIMB Aviva will continue providing coverage on existing policies until the end of their current contract period, and claims for covered services will continue to be processed according to the contract terms.”

CIMB Aviva is a partnership between CIMB Group, the country’s second biggest banking group, and Aviva plc, the UK’s largest insurer.

In July last year, Aviva paid RM500 million to buy a 49 per cent stake in CIMB Group’s subsidiaries, Commerce Takaful Bhd and Commerce Life Assurance Bhd.

It resulted in Aviva holding its first takaful unit, CIMB Aviva Takaful, along with a life unit, CIMB Aviva Assurance Bhd.

Since it started business in July last year, takaful has accounted for about two-thirds of CIMB Aviva’s total gross premium income.