Cash before Cover means that premium must be paid first before an insurance cover can take effect. Example of Cash before Cover insurance would be Motor (Car) Insurance, Travel Insurance, medical insurance, bond insurance etc. This is actually prescribed by law that these insurance cover can only be issued by insurers or their agents on a ‘cash before cover’ basis.
We will not issue the e-Cover Note if payment is not received in full and readily available in our account. Any payment by cheque will have to wait till the cheque is cleared and fund credit to our account. This is because, once the e-Cover Note is issued and updated to JPJ system, it is deem that premium has been made by the insured.
Thus, any subsequent request for cancellation of policy and refund of premium will and can only be made to the insured as named as the policyholder. No refund can be made to anyone else except special circumstances where the insured do not have a local bank account, or has deceased etc.
And because it is also an offend for insurance company to refund/payment to none other then the policyholder, so, if any agent issue your motor insurance before you actually make payment, the agent cannot request the insurance company to cancel the policy and refund premium to the agent, in the event they fail to collect premium from you.
Thus, for agent to offer credit terms for motor insurance would be very risky for agent as once the Cover Note is issued, it cannot be cancelled without the insured approval. Even if the policy get cancelled, refund will only be make available to the policyholder.