Have you heard about Auto Life Insurance before? Say what it is for and how it differs from the usual car insurance you must get every year.
When you buy a new car, the bank that approves your car loan will typically try to offer you an insurance policy when signing the sale and purchase agreement or SPA. This particular type of takaful is what we call Autolife Insurance.
Auto life insurance for cars
Autolife Insurance is an insurance plan that protects car owners in the event of death or illness before the settlement of their car loan. It covers the remaining debt with banks without burdening them or their family members.
Like life insurance, this insurance offers coverage to car owners from illnesses that undermine their ability to perform work normally and repay their car loan. In such cases, the car insurance company will settle the remaining debt with banks and hand over the vehicle to owners if they can no longer earn a living or to their family members if they are dead.
When can you buy it?
This insurance is offered to car buyers when they sign the SPA. Usually, buyers only have to pay once to get the insurance, and it doesn’t need to be renewed annually like the regular auto insurance or road tax.
The price set for purchasing this insurance depends on factors such as age, loan amount, and financing period. Car buyers may be quoted a different price even if they buy the same car model, as banks look at several things to determine the price. Hence, it differs from person to person.
You can also purchase autolife insurance separately after buying the car. But in this case, you must visit the bank that approves your loan for assistance. As a buyer, you can purchase and make additional Autolife Insurance anytime if your car loan is still active.
The insurance quote is based on the market price of your car for that particular year. The bank will calculate the loan balance and repayment period to determine the final quote. Prices between banks also vary depending on their interest rates.
One of the main conditions to get this insurance is age. You must be between 19 to 60 years old to purchase this product. The bank will automatically reject your application if your age does not fall within this range. In addition, you also need to have an active loan with the bank you’re planning to purchase the insurance.
The table below highlights key differences between auto life and car insurance for easier understanding:
|Auto life insurance||Car insurance|
|Provides coverage for vehicle owners in case of death or illness that affects loan repayment||Covers car damage due to accidents, fire or theft (depending on policy type)|
|One-off payment only||Must be renewed annually|
|Does not affect the NCD||NCD will be forfeited if the claim is made under |
|Protects car owners and family members||Protects car owners and third parties|
As you can see, autolife insurance can be extremely beneficial to car owners in case of death or chronic illnesses. If you are worried about what will happen to your car and your family members if you fall sick or pass on unexpectedly, this can greatly help.
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