Group Term Life Presentation

Group Term Life

Always Listening Always Understanding

1 Updated as 21/12/2006 by ely

W hat is Group Term Life ? • Prudential offers an insurance schem e specifically designed to cater for the welfare of your em ployees • This cover is provided at a nom inal cost to your com pany. • This coverage is classified as an Employee Benefit . • This benefit is tax deductible. 2 Updated as 21/12/2006 by ely

• Although we can never predict our future, all of us hope to have a healthier

and longer live. However life is fragile and we must plan for the unexpected. • Therefore, for the ones that we care and love, Prudential offers an

comprehensive insurance scheme which is recognized as an Employee Benefit and is, designed to care for the welfare of employees at a nominal cost to the company. •Premium paid classified as expenses and therefore it is tax deductible.

Group Term Life Cover on death and total & permanent disability (TPD) due to all causes Covers extends to many lives but falls within one single contract As an employer you become the policyholder and your employees become the insured members.

Policy and premium renewable annually As an employer you are able to provide insurance benefits to your employees at affordable rates

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• This scheme covers death and total & permanent disability (TPD) due to all causes whether by accident or by illness/sickness or by natural death. • A company is able to provide coverage for it’s employees at an affordable cost where many lives are covered under one single contract. The employer is the policyholder and employees become the insured member. • This scheme is renewable yearly and invited for renewal after 12 months. • Worldwide cover is provided 24 hours a day, 7 days a week, 365 days a year.

Group Term Life Eligibility A m inim um of only 5 em ployees needed to com m ence cover

Your com pany is registered as a legal entity

Insurability

Your business has not been form ed for the sole purpose to buy insurance

There m ust be an em ployer/em ployee relationship

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• No matter how large or small a business running, as long as the company is a registered legal entity (Form 9) with at least 5 members/employees who are insurable, the scheme can commence. • There must be an insurable interest between the member and the policyholder i. e the policyholder is an employer and the members are the employees. • The company cannot be purposely formed to purchase insurance.

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W hat is in it for m e? The benefits of Group Term Life from an Em ployer’s perspective Increases loyalty, productivity and the efficiency of em ployees Able to establish the expenses in advance Contributions m ade are eligible for tax relief

Supports staff retention & recruitm ent initiatives

Em ployer’s Perceptive

Financial support for em ployees and fam ily

High protection at m inim al cost

Risk m anagem ent Protection for com pany sponsored personal and car loans

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Increases loyalty, productivity and the efficiency of employees • Employees under GTL coverage work with the peace of mind and sense of security since their mind will be more focus on the job rather than of financial consequences of the uninsurable events. In addition, it creates greater loyalty. Supports staff retention & recruitment initiatives • Employee Benefits helps reduce staff turnover and attracts recruitment by providing additional benefits to the staff in addition to the core benefits. High protection at minimal cost • Lower premium rates due to economies of scale and all staffs enjoy same unit rate with better coverage. Risk management • Serves as a risk management tool for the company as the risk is transferred to the insurance company. Protection for company sponsored personal and car loans • Employee’s personal loans and car loans with the employer can be settle from the insurance proceeds in the event that employee passes away. Financial support for employees and family • Provides financial support for employees and their families in the event of TPD or Death. As the cost living increases with inflation, employee are able to increase their insurance coverage to meet the income needs of their families. Contributions made are eligible for tax relief • Premium paid are classified as expenses and are therefore tax deductible. Able to establish the expenses in advance • Employer can systemically budget their insurance premium rather than be faced with the social responsibility of making large expenditure when misfortune strikes.

Death Cover Cover extended to death due to ALL causes whether work related or not. Includes: ¾ Illnesses/Sickness ¾ Accidents ¾ Natural

death

A lum p sum death benefit paym ent is provided to the policyholder (the com pany) who distribute the proceeds based on the com pany’s discretion to the insured m em ber (the em ployee).

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Death (All causes) • The members/employees are insured against death due to all causes such as illness/sickness, accident or natural causes. • Even though the employer is the policyholder, the employees are covered whether the cover is work related or not. • The policy entry age is 16-60 years old. Upon renewal, death cover is extended up to age 65 for existing members in the scheme. • A lump sum death benefit will be paid to the employer who is the policyholder and then on the discretion of the employer to distribute the proceeds accordingly to the employee’s next to kin.

Total & Perm anent Disability (TPD)

their lifetim e Irrecoverable loss of sight in both eyes Irrecoverable loss of both hands or both legs

Definition

1 2 3 4

Unable to earn any incom e throughout

Irrecoverable loss of an eye and either one hand or leg 7

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Total & Permanent Disability (TPD) (All causes) • In the event of the employee complete unable to engage in any occupation and to perform any work for remuneration or profit throughout their life time. •The loss of two limbs at or above wrist or ankle, both eye sight or a combination of a limb and an eye will also constitute as total & permanent disability.

Exclusions to TPD 1

Self-inflicted injuries or illnesses

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Flying other than as a fare paying passenger on a scheduled flight

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Racing on a horse or on/in a vehicle with wheels

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War, revolution or warlike operations

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Riot, civil commotion, strike & terrorism activities

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Violation of any law

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Pre-existing conditions within 90 days from effective date of coverage 8

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This benefit is not payable if the disability results directly or indirectly, wholly or partly, by any one of the following occurrences: suicide, self-inflicted injuries or any attempt there at, while sane or insane; war, declared or undeclared, revolution or any warlike operations; riot and civil commotion, strikes or terrorist activities; violation or attempted violation of the law or resistance to arrest; entering, operating or servicing, riding in or on, ascending or descending from or with any aerial device, or conveyance except while the Insured Member is in an aircraft operated by a commercial passenger airline on a regular scheduled passenger trip over its established passenger route; racing on horse or wheels; and pre-existing conditions for which the Insured Member received medical treatment, diagnosis, consultation or prescribed drugs during the ninety (90) days preceding the effective date of coverage unless the Insured Member affected by these conditions has been insured under the Basic Policy for twelve (12) months.

Sum Assured (SA) Derivation 3 methods m ethods to derive the sum assured Flat sum assured

Multiple of m onthly basis salary Fixed sum assured

All em ployees covered with the sam e sum assured am ount 12 x or 24 x or 36 x etc. of basic m onthly salary. Different m ultiple of m onthly basis salary can be applied for different job category in the sam e com pany Em ployees classified into various job categories/level of m anagem ent

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There are 3 ways to derive the sum assured of Group Term Life (GTL): Flat Sum Assured : All employees under one company can be covered with same sum assured amount. For e.g. A company with 10 employees will be covered RM50,000 each. There is no employee with lesser or more than RM50,000 coverage.

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Multiple of Salary : An employer can decide to use an income multiple (12,24,36,…) of every single employee’s monthly salary as employees’ sum assured. For e. g : An Executive monthly basic salary is RM2, 000, if employer chooses a multiple of 24 times their monthly basic salary, the sum assured will be RM48,000 for the Executive. In the same company, the employer may choose an income multiple of 36 times multiply salary for another higher level such as Manager provided the same basis is used for the same category or level subject to PRU’s approval.

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Fixed sum assured : Different levels of designation will apply different sum assured amounts. For e. g : Director’s sum assured is RM 500,000, Manager’s sum assured is RM 300,000, Executive’s sum assured is RM 100,000

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Non-Evidence Lim it (NEL) W hat is NEL? W hat is the NEL am ount? Free cover lim it w ithout m edical underw riting requirem ents Autom atic cover if SA w ithin N EL

The NEL w ill be stated in the proposal N EL is varied dependent on the total average SA & group participation size

How does it w ork? Applicable to m em bers aged 50 or below M em bers w ith SA w ithin N EL are covered im m ediately upon registration w ithout any underw riting requirem ents The excess of individual sum assured from the N EL are only accepted subject to satisfactory m edical evidence The total am ount of insurance cover and associated prem ium s are capped to the N EL unless otherw ise notified by Prudential 10

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For e.g. The NEL computed is RM100,000 for Company A. Therefore, those employees aged 50 or below will be accepted till RM100,000 from the effective date of the policy or the date of inclusion of the employee to the policy whichever later without undergo any medical requirement provided the applied sum assured for those employees equal or less than RM100,000. If the applied sum assured for employees is less than RM100,000, the accepted sum assured is up to the applied sum assured. However, if the applied sum assured more than RM100,000, PRU will only accept till RM100,000 and the remaining sum assured will be subject to underwriting and PRU’s acceptance. The policyholder will only be charged on the accepted sum assured only. The excess sum assured from the NEL will be charged after the satisfactory of medical evidence provided and acceptable by PRU and charged from the date of acceptance of the excess sum assured. Please be reminded that the NEL is only applied for those aged 50 or below and group participation more than 10 members. The company with less than 11 members will require the completion of personal statement and/or medical examination.

Non-Evidence Lim it (NEL) Case Study 1 Lets take 5 exam ples from a group of 11 m em bers. In this case, NEL is RM50,000: Em ployee Nam e

Age

Proposed sum assured (RM )

Sum assured accepted w ithout underw riting (RM )

Sum assured subject to underw riting

E1

45

E2

49

RM150,000

RM50,000

RM100,000 (excess)

RM100,000

RM50,000

RM50,000 (excess)

E3

51

RM100,000

Nil (> 50 years old)

RM100,000

E4

35

RM50,000

RM50,000

None

E5

53

RM50,000

Nil (> 50 years old)

RM50,000 11

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• E1 : age < 51, proposed sum assured RM150,000 but the NEL is only limited to RM50,000.

The excess sum assured (RM100,000) from the NEL will be subject to underwriting. Premium charged from effective date of the policy or the date of the inclusion to the policy whichever later will be on the sum assured RM50,000. The balance of RM100,000 will only be charged from the date of acceptance after satisfactory of medical evidence.

• E2 : age < 51, proposed sum assured RM100,000 but the NEL is only limited to RM50,000.

The excess sum assured (RM50,000) from the NEL will be subject to underwriting. Premium charged from effective date of the policy or the date of the inclusion to the policy whichever later will be on the sum assured RM50,000. The balance of RM50,000 will only be charged from the date of acceptance after satisfactory of medical evidence.

• E3 : age > 50, therefore the NEL is not applicable for E3. The proposed sum assured (RM100,000) will be subject to underwriting. The proposed sum assured (RM100,000) will only be charged from the date of acceptance after satisfactory of medical evidence. • E4 : age < 51, proposed sum assured RM50,000 and is within the NEL of RM50,000.

Premium charged from effective date of the policy or the date of the inclusion to the policy whichever later will be on the proposed sum assured RM50,000.

• E5 : age > 50, therefore the NEL is not applicable for E5. The proposed sum assured

(RM50,000) will be subject to underwriting. The proposed sum assured (RM50,000) will only be charged from the date of acceptance after satisfactory of medical evidence.

Frequently Asked Questions

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Frequently Asked Questions •

Q: Who is eligible to enroll? A: All full-time proprietors, directors, partners and employees working in the company are eligible to apply. The scheme only requires a minimum of 5 eligible lives to commence.

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Q: What is the duration of coverage? A: The scheme is renewable annually. The employee is insured the minute their enrolment is approved by Prudential.

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Q: What is the extent of coverage? A: Worldwide coverage is provided 24 hours-a-day, 7 days a week, 365 days a year. The insured is covered while they are at or away from work (e.g. on vacation).

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Frequently Asked Questions •

Q: At w hat age are individuals eligible for the schem e? A: Any full time perm anent em ployees who are actively working and aged between 16 and 60 years old are eligible. Death cover only is offered on renewal for existing schem e m em bers aged between 60 and 65.

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Q: W hat are the participation requirem ents? A: 100% em ployee participation is required if em ployer contributes the full prem ium . At least 75% em ployee participation is required if em ployees are contributing part or the entire prem ium .

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Q: W hat are the prem ium rates?

A: The prem ium rates are based on individual group census and one unit rate will apply to the whole com pany (the policy 22/12/2006holder). Updated as 21/12/2006 by ely

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Frequently Asked Questions •

Q: Does the em ployee need to undergo a m edical checkup? A: A No-Evidence-Lim it is calculated for each policy dependent on the aggregate sum assured and num ber of lives insured. For a sum assured greater than this lim it m edical evidence will be required.

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Q: W hat about em ployee below the No-EvidenceLim it? A: Em ployees aged 50 years or below and whose sum assured is below the No-Evidence-Lim it are autom atically covered in this policy, without the need to undergo m edical underwriting requirem ents.

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Q: Is there any case that the No-Evidence-Lim it is not applicable? A: For group size less than 11 m em bers, the m em bers are required to com plete a personal statem ent and/or undergo a m edical check-up (if any).

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Frequently Asked Questions •

Q: How do I pay? A: You may issue a cheque payable to Prudential Assurance Malaysia Berhad. The premiums are charged annually.

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Q: What should I do if there is any addition or deletion of member? A: You will have to inform us and the premiums will be calculated and charged on a pro-rata basis.

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Q: How long is the policy period? A: The benefits and rates are applicable for 12-month period.

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Q : How do I renew this scheme? A: Subject to our review, you will be invited to renew.

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Any Questions ? Thank you

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Contact •If you need further information about Group Term Life, please contact; Group Life Insurance (Sales & Marketing) Prudential Assurance Malaysia Berhad Level 2, Menara Prudential, Jalan Sultan Ismail, 50250, Kuala Lumpur Tel: 03-2031 8228 (General Line) Fax: 03-2072 8576 DID: 603-2076 3806 Direct Fax:603-2072 8576 Email Address: [email protected]

22/12/2006 Updated as 21/12/2006 by ely

"Always Listening. Always Understanding."

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