Dealing with Intermediaries

An insurance intermediary is a person or a company that helps you in buying insurance. Insurance agents, insurance brokers and financial advisers are insurance intermediaries.

On the other hand, a takaful intermediary is someone who solicits takaful business or invites potential customers to enter into takaful contracts with operators. They are also known as takaful agents and takaful brokers.

An insurance or takaful agent represents an insurance company or takaful operator and primarily sells insurance policies or takaful plans issued by the insurance company or takaful operator it represents. An insurance or takaful broker on the other hand represents the customer and advises the customer on the most suitable insurance policy or takaful plan. A financial adviser is an independent party that provides financial planning services to the customer based on the customers’ financial needs.

These differences are illustrated in the table below:

Types of Intermediaries Representation / Registration / Licensing Insurance Agent Takaful Agent Insurance/ Takaful Broker Financial Adviser Represents Insurance Company Takaful Operator Customer Customer Licensed/Registered by: PIAM (general agents) or LIAM (life agents) Registrar of Takaful Intermediaries Bank Negara Malaysia Bank Negara Malaysia

Deal with an agent, broker or financial adviser with the following characteristics: Good knowledge of insurance and/or takaful products Understands your needs and interests Ensures you understand what you are buying Does not over-promise or over-sell Factual, not pushy or intimidating Delivers quality and timely service Protect your interests and rights: Deal only with registered/licensed intermediaries. Deal with intermediaries with proven track record or those with good referral from friends and relatives. Be truthful about yourself and declare material facts. Never be persuaded to sign on blank forms or anything you don’t understand. Never be persuaded to lapse an existing policy to buy a new life policy. Ensure that you understand the products you are buying. Read the policy benefits and terms carefully, and compare them with other similar products. Shop around to get value for money. Buy only what you need and what you can afford. Ask for sales materials, for example the sales illustrations, product pamphlets or customer fact find form (for life products only), and keep these documents safely. When in doubt, always ask for more information from the intermediaries or seek clarification from the insurance company or takaful operator that offers the insurance or takaful products. Ask for a receipt as the proof of premium payment and keep it safely.