The Malaysian family structure has constantly evolved, with some families practicing multi-generational households and some having extended family members who are not related by blood, either through adoption or blended families.
And despite the differences and uniqueness of each family structure, each one should be celebrated and protected.
If something happens to you and you can no longer support your loved ones financially, they will have to depend on your insurance benefits to support themselves.
But can your insurance plan cover everyone you love and care for?
Most plans don’t offer an easy way to cover immediate AND extended family
As a general rule, most insurances only allow you to add your spouse, children or parents as a dependent in your plan.
If you wanted to include your uncle, niece, cousin or other members of your household, you will have to go through a lengthy legal process to prove that they are of insurable interest to you.
Quick facts: What is insurable interest?
Under the Financial Services Act (FSA), an insurable interest is often defined as:
- Spouse and children
- Legal guardian
- Employer employee
- a person on whom he/she is totally or partially financially dependent for maintenance or education at the time the policy takes effect
An example would be if you and your spouse have a child and own a home. If one of you dies, it creates financial hardship for the spouse and child, which means that both spouses have an insurable interest in each other.
The problem, however, is that most insurance protection plans don’t offer a simple and easy way to add other family members beyond your child, spouse, or parents.
This is because their definition of what counts as a dependent tends to be limiting. Here’s how most insurance companies would define who can be added as dependents:
- Joint: Legally married spouses
- Child: Children up to 19 years old or up to 23 years old if they are full-time students.
If you want to cover other family members, for example a niece, you can use two legal processes: absolute assignment or appointment.
Below is an example of how you can do this today using these two available legal options:
|Choice||Definition||Insured status (uncle)||Dependent status (niece)||Disadvantages|
|This is when the policyholder transfers all of his rights to the policy to another person or organization.|
The policyholder does not have to provide reasons or set conditions for the transfer.
|As policyholder and assignor, he will continue to pay the insurance premiums.||Becomes the owner of the font and holds the rights to the font.||Need additional legal procedure to submit this declaration.|
Follow the steps to get it dabbed and Pay stamp duty depending on the value of the policy.
|By appointment||This is a legal and binding process that ensures that your nominees will receive the benefits of your insurance policy BUT only if they are immediate family (spouse, children, parent).|
Otherwise, the mandatary can only be the executor of the insurance benefits (such as a niece, an uncle).
|Policy rights and living benefits remain with the policyholder.||The named dependent (niece) can only be responsible for distributing the death benefit as an executor.||The executor distributes the death benefit according to the will of the policyholder or, if there is no will, according to the Distribution Act 1953.|
The dependent can not keep the death benefit for itself.
Under the Malaysian Financial Services Act, if an agent for an insurance policy is other than the spouse, child or parent (if there is no spouse or child) , the agent can only receive benefits payable on the death of the policyholder. as executor.
Although it is possible to extend your insurance to cover all the people you love and care for, you will need to go through additional legal procedures to provide them with protection.
Unless you are covered by a Prudential plan.
With Prudential, everyone you care about can be protected
Each family is unique and different. But what we all share is the need to protect our loved ones from unforeseen burdens, whether it’s the financial burdens of a medical injury or the loss of a loved one.
With a vision to protect everyone, Prudential has taken a new approach to defining insurable interest. Expand all of their plans to include extended family members, who are a provider, to be covered and protect their dependents if something goes wrong.
How does Prudential extended family coverage work? Here is a scenario involving a nephew and his uncle:
How Eric protects his uncle using his prudential police
Eric’s uncle, Tan, is 70 and retired with no income. He lives with and depends on Eric (his nephew) for care. Eric wanted to make sure that if anything happened to him, his uncle could still be taken care of and he wouldn’t have to deal with financial burdens.
He decides to take out an insurance plan with Prudential with his uncle as the insured (dependent), while Eric himself as the Life Assured (provider).
Quick facts: what is insured and what is life insured?
Insured is the owner/policyholder. He is essentially the holder of the insurance contract with an insurance company.
Insured life means the person whose life is protected by the insurance.
Example: If you are the insured and your spouse is the insured, if something happens to you, the insurance company will pay the benefits to your spouse.
Now Eric can have peace of mind knowing that the rights and benefits of his policy will go directly to his uncle, as the insured, and that he will be protected if anything happens.
Under Prudential’s extended family coverage, the process to make Eric’s uncle an insured is simple and can be completed at the application stage at no additional cost.
If you were to do the same for another family member, the only thing you would have to prove at the proposal stage would be:
- declare that the insured bears the daily living expenses of the insured; Where
- declare that Life Assured supports the education of the Insured
Prudential’s extended family coverage gives you peace of mind that anyone who is financially dependent on you, regardless of their blood ties, will be able to take care of themselves and that, regardless of your family structure, they will be celebrated and protected.
Prudential understands that every family is unique and wants you to celebrate it with the Famvatar ‘Made For Every Family’ contest, where you can show the world your unique family for a chance to win up to RM40,000* in ongoing prizes of road.
Here’s how you can have fun:
Step 1: Customize your family avatar via Prudential’s Famvatar platform. Submit your details and be the first 100 users to download the bonus stickers to win RM200 in travel vouchers.
2nd step: Download the Pulse by Prudential app. Go to “My communities” and join the “Live Happy” community. Post your bonus Famvatar stickers to the “Live Happy” community and include your response to “What does family mean to you?” in the caption plus the hashtag “#MadeForEveryFamily” in the title of your post. The first 100 submissions in the Pulse app will earn an additional RM100 travel voucher.
Step 3: Enter for a chance to also WIN the Grand Prize* (Family Portrait Photography worth RM10,000) when you share your bonus Famvatar stickers on Prudential’s Facebook (in the comments section) AND/OR on the feed Instagram and answer the following question in your caption, “What does family mean to you?”. Tag @prudentialmalaysia and include the hashtags #PRUFamvatarMY and #MadeForEveryFamily.
*Terms and conditions of application.
Find out how you can easily expand your insurance plan to cover your extended family with Prudential today!
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