LOCAL family takaful operators have started to offer commission-free pure protection products directly to consumers from this month, said Malaysian Takaful Association (MTA).

Its chairman Muhammad Fikri Mohamad Rawi (pic) said consumers can participate in an industry-endorsed takaful plan directly from takaful operator member companies.

“The product is now available via online through websites of the takaful operator member companies or accessible at any of the branches of the takaful operator depending on the direct channel distribution strategy adopted by the individual operators,” he said in a statement yesterday.

The first out in the series of industry endorsed products is a pure-protection term product, providing death, and total and permanent disability coverages with a sum covered of up to RM500,0000 depending on the entry age of an individual.

He said the introduction of the direct channel was timely against the backdrop of digitalisation and demands for convenient services.

“The way the world operates is evolving tremendously with digitalisation. People are now able to get their hands on almost anything online. Millions of online transactions are happening daily from purchasing of items, financial transactions to updating of personal information.

“It is imperative for the takaful industry to embrace the evolving environment and offer better services so as to remain relevant to its customers in this competitive and demanding landscape,” he said.

The introduction of direct channel is in line with Bank Negara Malaysia and the industry’s aspiration to diversify and create new cost-efficient distribution channels.

MTA hopes such accessibility will increase the penetration rate for family takaful, reach new market segments and address the protection gap faced by the majority of Malaysians.

“The majority of Malaysians do not have enough coverage even if they already have some sort of existing takaful protection.

“Based on a protection gap study issued by MTA back in 2014, the average protection gap for a Malaysian is approximately 8.7 times of their average annual income.

“The protection gap becomes more apparent for the younger working population below 30 years of age where the gap is at approximately 17 times of their annual income. We hope with the availability of the direct channel — online channel in particular, coupled with a simple product offering focused on providing adequate protection at an affordable price — it would make these products more appealing to the younger market segment,” said Muhammad Fikri. — TMR