Key takeaways
- Only individuals registered with LIAM may sell life insurance in Malaysia, after passing the pre-contract exam (plus CEILLI for investment-linked plans).
- Since 1 January 2023, bank staff selling insurance must pass PCEIA (or TBE for takaful) under BNM's Bancassurance/Bancatakaful policy document.
- Through the bank, commissions on non-participating and medical plans must be shown in the product disclosure sheet, as an amount and a percentage.
- BNM requires life insurers and family takaful operators to offer commission-free pure protection products through direct channels: term since July 2017, critical illness and medical since July 2018.
- A new individual life or health policy usually has a free-look period of about 15 days, whichever channel you buy from.
- Mortgage insurance from the bank is one option: ask whether the bank accepts an MLTA or term plan bought elsewhere before you sign.
- Wherever you bought your policy, Lulu can review it for free, from any insurer, with no need to buy anything.
Agent, bank or online: the short comparison
I am a Great Eastern agent, so read this knowing which side I sit on. I will keep it fair: each channel suits a different kind of buyer, and the rules that protect you differ a little between them.
| Insurance agent | Bank (bancassurance) | Online or direct from the insurer | |
|---|---|---|---|
| Who sells it | An agent registered with LIAM (life) who sells one insurer's products | Bank staff selling the products of the insurer the bank partners with | The insurer itself, on its website or at its branch |
| Qualification | Must pass the pre-contract exam (and CEILLI for investment-linked plans) before registration | Must pass PCEIA (insurance) or TBE (takaful), and CEILLI for investment-linked plans | No adviser; you decide alone |
| Advice on your needs | Yes, usually face to face, over several meetings | Yes, often while you are at the bank for a loan or deposit | No; you pick the plan and the sum yourself |
| Product range | The full range of that insurer, from term to medical to savings | What the bank's partner insurer offers through the bank | Mainly simple pure protection plans |
| Commission | Paid by the insurer to the agent | Paid by the insurer to the bank; disclosed in the product disclosure sheet for non-participating and medical plans | Commission-free direct products are required by BNM for pure protection |
| Help at claim time | The agent helps you prepare and follow up | The bank and insurer must set out who handles complaints, after-sales and claims | You deal with the insurer directly |
Sources: LIAM, Know Your Agent; BNM's Bancassurance/Bancatakaful policy document as summarised by Skrine (July 2022); Bank Negara Malaysia, direct distribution channels (June 2017). This is general information, not legal advice.
Buying from an insurance agent: when it helps most
Only people registered with the Life Insurance Association of Malaysia (LIAM) may sell life insurance, and they must pass the pre-contract examination, plus the Certificate of Investment Linked examination for investment-linked plans, before they are registered. You can confirm an agent on LIAM's online Know Your Agent check, or call LIAM at 03 2691 6168 if you meet someone selling without registration (LIAM).
An agent is worth the time when the decision is not simple:
- Medical cards and critical illness, where health history, waiting periods and riders change what you get.
- A family plan covering parents and children, with life, medical and education needs to balance.
- Policies you already have: an agent can review them and tell you if you are paying twice for the same cover.
- Claims: forms, medical reports and follow-ups are where most people want a person on their side.
The trade-off is real: an agent sells one insurer's products, so ask how the plan compares with what you already hold, and take your time.
Buying insurance at the bank: what to know first
Banks sell insurance through partnerships with insurers, a channel called bancassurance. Since BNM's policy document took effect on 1 January 2023, bank staff who market or advise on insurance must pass PCEIA (or TBE for takaful), and CEILLI for investment-linked plans, and keep up yearly training (Skrine summary of the BNM policy document). Some protections are specific to this channel:
- After the sale you must be told you bought an insurance or takaful product, and from which company.
- For non-participating and medical plans, the commission must appear in the product disclosure sheet, as an amount and as a share of the premium.
- For savings plans sold to people earning up to RM5,000 a month, first-time buyers, students and retirees, a sales supervisor must approve the recommendation.
Where people go wrong is buying in a hurry while signing a home loan. Mortgage insurance from the bank is one choice, not the only one: ask whether the bank accepts an MLTA or term policy you buy elsewhere, and compare before you sign. My MLTA and MRTA page explains the difference.
Buying online or direct from the insurer
Bank Negara Malaysia requires life insurers and family takaful operators to offer commission-free standalone pure protection products through direct channels: term products from 1 July 2017, and critical illness and medical products from 1 July 2018 (BNM). In practice that means simple cover you can buy on an insurer's website or at its branch without an agent.
- Good for: people who already know the cover they want, for example a basic term plan to protect a home loan, and who are comfortable answering the health questions on their own.
- Watch for: plans are kept simple, so riders and options are fewer, and nobody checks whether the sum covers your real needs.
- Your answers matter. Whichever channel you use, the health and lifestyle questions on the proposal form are yours to answer accurately. A wrong answer is a common reason for claim disputes.
Which channel suits your situation?
| Your situation | Usually the better fit | Why |
|---|---|---|
| You want basic term cover and know the amount | Online or direct | Simple product, commission-free option exists |
| You need a medical card and have a health history | Agent | Disclosure, exclusions and riders need explaining |
| You are signing a home loan | Compare the bank's MRTA with an outside MLTA or term plan | The bank's package is one option, not the only one |
| You want cover for the whole family | Agent | Several plans to fit together without overlaps |
| You already have several policies | Agent policy review | Spot double cover and gaps before buying more |
| You mainly want a savings plan | Any channel, but read the guaranteed and non-guaranteed parts | Returns illustrations differ; ask what is guaranteed |
Five questions to ask whoever sells you insurance
- Are you registered, and with whom? For life insurance, check the agent on LIAM's site; bank staff must hold PCEIA or TBE.
- What exactly does it not cover? Ask for the exclusions and waiting periods, not only the benefits.
- Is any part of the return guaranteed? For savings plans, separate guaranteed values from illustrations.
- Who helps me when I claim? A named person, a bank desk or the insurer's hotline.
- How long is the free-look period? The industry glossary says a new individual life or health policy usually has about 15 days during which you can return it (InsuranceInfo glossary); check your own policy for the exact terms.
Talk it through with Lulu, no pressure
I help families and small business owners in Kuala Lumpur and Selangor work out what they actually need, review the policies they already have, and follow up on claims. If online or your bank is the better fit for you, I will tell you so. Ask in Mandarin, English or Cantonese on WhatsApp, and decide in your own time: no hard selling.
You can start with a free policy review, or read my guide to choosing a medical card.