{"id":10711,"date":"2026-10-14T15:38:15","date_gmt":"2026-10-14T07:38:15","guid":{"rendered":"https:\/\/www.fmos.org.my\/?p=10711"},"modified":"2026-10-14T15:43:16","modified_gmt":"2026-10-14T07:43:16","slug":"buying-insurance-through-a-bank-an-fmos-guide-to-bancassurance","status":"publish","type":"post","link":"https:\/\/www.fmos.org.my\/bm\/buying-insurance-through-a-bank-an-fmos-guide-to-bancassurance\/","title":{"rendered":"Buying insurance through a bank? An FMOS guide to bancassurance"},"content":{"rendered":"
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Walking into a bank to place money in a fixed deposit or ask about savings and investment options may seem straightforward. But when an insurance product is offered through the bank, it is important to understand exactly what you are buying.<\/p>

Bancassurance refers to the distribution of insurance products through a bank. These products can range from traditional life insurance and savings plans to investment-linked policies (ILPs).\u00a0<\/p>

Although they are sold through the bank, they are insurance products underwritten by an insurance company and are not banking products, such as fixed deposits or savings accounts. Understanding this difference is important when deciding whether the product meets your needs.<\/p>

Disputes handled by the Financial Markets Ombudsman Service (FMOS) show why it is important to understand what you are buying, what you are agreeing to, and what you are signing, including the product\u2019s payment obligations and key terms.\u00a0<\/p>

Having a clear understanding from the outset can make a significant difference if a disagreement arises later.<\/p>

Traditional Policies vs Investment-linked Policies<\/strong><\/span><\/h4>

Traditional life insurance policies and investment-linked policies can both provide insurance protection, but their structures and risks differ.<\/p>

Traditional life insurance policies generally provide benefits according to the terms of the policy. Depending on the type of product, certain benefits may be guaranteed, while others, such as bonuses or dividends, are non-guaranteed and may vary based on the product’s performance and terms.\u00a0<\/p>

When considering such a policy, consumers should look beyond the headline benefit and understand the premium payment period, coverage, exclusions and what they would receive if they surrendered the policy early.<\/p>

An investment-linked policy combines insurance protection with investment features. Part of the premium is allocated to investment-linked funds, while policy charges and insurance costs are deducted in accordance with the policy terms.\u00a0<\/p>

The value of the investment component may increase or decrease depending on the performance of the selected funds. As insurance charges may change over time, the long-term sustainability of the policy depends on the value of the units and the funding arrangements under the policy.<\/p>

This means an ILP should not be automatically treated as a fixed-return savings product or as a substitute for a fixed deposit.<\/p>

The suitability of a policy depends on whether its features, risks, costs, and payment obligations align with the consumer’s needs and are consistent with the representations made and the consumer’s understanding at the point of sale.<\/p>

When can a bancassurance dispute arise?<\/strong><\/span><\/h4>

A bancassurance dispute may arise when a consumer subsequently discovers that the product purchased, the associated payment obligations, or the benefits provided differ significantly from the representations made during the sales process or from the consumer’s understanding and expectations at the time of purchase.<\/p>

For example, a consumer may believe that:<\/p>