Friday, October 31, 2014

Insurance 101 RELOADED!

Insurance is meant for protection, NEVER was it meant for investments. As the word suggest, the word Insurance means 'to insure'.

In the context of Insurance, even if the plan is called Investment Linked Policy (ILP), it does NOT mean that it is for investment!

The main purpose of ILP over the traditional plan is that the premiums being paid are subjected to the performance of the underlying funds and it in turn will generate cash values over time. 

Since the insurance charges will go up as we grow older, the cash values generated along the years can be utilized to pay off the higher insurance charges at older age in order to maintain the policy. Think of it as a form of financial planning for taking care of your insurance needs at older age.

That said, it does not perform like pure unit trust as the accumulated cash values are subjected to insurance charges when pure mutual fund is not.

If you read the proposal form you will see a very clear wording in bold that says that your insurance charges will go up by age. Even if your premium payment does not go up, your insurance charges will.

Insurance is a business of risk management. Based on the ascertain risk and the premium payment, the insurer agrees to 'underwrite' and provide the necessary coverage.

The risk here can be in the form of age (the older we get the higher the chances of us claiming), smoking statusgenderoccupation (a construction worker has the higher chance of being involved in work prone accident vs an office worker) & health status during the inception of the policy.

An example is the car insurance. For cars that are over 10 years and above a loading (extra premium) may be imposed and can be as high as 100%. In addition, do note that as long as you want to drive the car, the premium will need to be paid. 

On the health insurance, if the medical card is to cover a term of up to age 80, the insurance charges will also need to be paid till age 80.

Take note that I mention insurance charge, not the monthly premium.The projected insurance charges is outlined in the quotation together with the projected cash values (high and low).

As I said, the insurance charges goes up by age, for example when we are in our 30s, the insurance charges may be in the range of Rm 1500 per year. This means if we are paying a premium of Rm1800 year, it is sufficient to cover for the insurance charges. However, when we are 60-65 the insurance charges is now Rm3,000 per year!

This means our premium of RM1800 is not sufficient to cover for the insurance charges at later years. When that happens, the variance of the insurance charges will need to be deducted from your cash values accumulated throughout the years, or you will need to do a top up.

Otherwise your policy may be at risk of lapsing even before the end of the term even if you are still paying the premium.

Sure, some agents will say that you can opt to withdraw the accumulated cash values, this is pure sales talk, whereby clients always like to hear when they get money, who doesn't, right? If you were to withdraw the cash values and when the insurance charges goes up, the policy may lapse prematurely and you’ll lose the protection benefits even more earlier than expected.

Always buy insurance with PROTECTION in mind, NEVER for investments. There is no investments here in the context of insurance, only protection.

To the readers of this blog, it is sad when insurance product is being sold as investments, and it is not only being practice in insurance companies, but banks who sells insurance plans. Go up to any bank and ask for good savings plans. Most probably you’ll end up with an insurance plan that promise to give you an exorbitant returns but when you calculate the Returns Of Investments (ROI), it may even be worse than the bank Fixed Deposit Rate (FD)!.

However, if you had bought any insurance plans, my advise to you is that do not cancel the plan until you had the chance to do a review and understand what it was meant to cover for.

Whether you buy the insurance from Prudential or from other insurance company, no matter how good or bad the agent’s explanation is to you, one fact still remains, you buy it for its protection values.

Also the claims are being paid by Prudential or the insurance company, and not the agent. We are all humans, and cannot run away from serious illness. We will eventually need to seek treatment at the hospital using the medical card sooner or later. I frequent hospitals almost daily.

Having seen a sight of relieve for having a medical card cover for having a heart bypass that costs RM50k is very common. THIS IS WHAT INSURANCE IS ALL ABOUT.

Feel free to leave a questions if you have any :-
Email: stevenung1971@ 
Hand Phone/Whatsapp: 016-451 5957
Skype: roy.steven.ung

Wednesday, October 29, 2014

High Treatment Cost For Patients Using Insurance Cards Will Be Addressed

KUALA LUMPUR: The Health Ministry will discuss with the relevant quarters to address the problem of high medical charges on patients using insurance cards at private medical centres, the Dewan Rakyat was told today.
Health Minister Datuk Seri Dr S.Subramaniam (pix) said the relevant parties included insurance agents, private hospitals, managed care organisations and Bank Negara. He said patients should not be charged excessively as the government had set the maximum limit for professional fees, which covered for consultancy and procedures, for private medical practitioners.
"This rate has been agreed by all quarters, namely hospitals, patients and the insurance companies in line with Schedule 13 of the Private Healthcare Facilities and Services Regulation 2006," he added.
He said this in response to a question by Che Mohamad Zulkifly Jusoh (BN-Setiu) who wanted to know the high fees charge on patients using insurance cards at private hospitals and clinics compared with those who paid in cash.
Dr Subramaniam however said that the people should be aware of other charges and fees, like for accommodation, nursing procedures, equipment, laboratory tests and medicines, which were not regulated by the ministry.
He said it was the marketing power which determined the actual cost imposed on patients by medical practitioners. Therefore, he advised patients and their family members to make the necessary considerations before seeking treatment at private hospitals.
As such, he hoped a health consumer group could be set up to give view, as well as become the catalyst to monitor excessive charges by private hospitals and clinics.
– TheSunDaily/Bernama

Cost Of Private Healthcare Will Go Up

Cost Of Private Healthcare Will Go Up

PETALING JAYA: The Federation of Private Medical Practitioner's Associations Malaysia strongly disagreed with the statement from Deputy Finance Minister Datuk Ahmad Maslan that private hospitals and clinics have no reason to raise prices after implementation of Goods and Services Tax (GST) next year.
Its president, Dr Steven Chow, said operating expenses for private clinics will definitely increase with the GST implementation.
"While certain medicines and medical equipment are zero-rated, other parts of the supply chain for private healthcare facilities are not tax-exempt," he said in a statement.
He pointed out that private healthcare does not operate in silos and therefore it is also affected by the cost of items such as rental, water and electricity.
"Costs of medicines are only a small part of a clinic's operating costs and furthermore, only medicines on the government essential drug list are zero-rated, which does not cover the full range of medications used in private and public healthcare," he said.
Chow said while certain medical equipment are GST-exempt, they are not items that are purchased daily.
"Disposables, service and maintenance cost of these equipment and all items associated with the use of the equipment are items that are going to be affected by GST," he said.
"Despite doctor' professional fees remaining the same even after GST, the overall cost of providing the same service will go up.
"We estimate that this will be from 3% to 5%. Therefore, it is incorrect to project that cost will not go up in private clinics and hospitals," he added.
Chow said doctors are left with the option to either increase their fees or absorb any increment in their expenses following the rise in operating costs.
- TheSunDaily

Thursday, October 23, 2014

Introducing PRUcancer

"In Malaysia, medical costs for cancer treatment can go up to RM300,000 while kidney failure could cost you RM150,000 or more. Meanwhile, major organ transplants could amount up to RM100,000."

Introducing PRUcancer

A cancer diagnosis remains one of our greatest fears as it can affect not just us but also the people around us. However all is not lost.

Thanks to the advancement in medical science, the chances of patients recovering from the disease have increased significantly in recent years especially if they are treated early.

However the fight with cancer is by no means easy. It is often a long and painful battle and can wear you down emotionally and physically, not to mention the financial burden you have to cope with.

It is with this in mind that PRUcancer plan was conceived to give you and your family the hope and means to continue in your fight for recovery by concentrating on things that truly matter.

While we can’t stop cancer from happening, there is no reason why we should allow it to stop us from continuing with our lives. With PRUcancer plan, there is always hope after cancer.

» PRUcancer plan offers you

1. Comprehensive Cancer Coverage
PRUcancer plan is a Comprehensive Cancer Coverage plan covering Cancer and Early Stage Cancer up to age 80.

2. Sum Assured Bounce-back Feature for
Early Stage Cancer The Sum Assured bounces back to 100% after 6 months from claiming the Early Stage Cancer benefit. The Sum Assured will remain at 100% throughout the remaining tenure of the policy. Early Stage Cancer Benefit is payable once only.

3. Guaranteed Maturity Benefit
When your policy matures, you will receive a Maturity Benefit of 100% Sum Assured! Even if you have already made a claim on Early Stage Cancer, you will still receive maturity benefit when your policy matures.

4. Affordable Premium
The Premium is affordable!

5. Special Underwriting
Our underwriters have specially tailored the underwriting requirements just for PRUcancer plan.

PRUcancer plans

Number of Units
Sum Assured (RM)
Cancer Benefit
100% of Sum Assured or Total Premiums (See Note 1) that have been paid to date, whichever is higher.
Early Stage Cancer Benefit
i)  Carcinoma In-Situ;
ii)  Early Prostate Cancer
iii) Early Bladder Cancer; or
iv) Early Chronic Lymphocytic Leukemia
25% of Sum Assured
Compassionate Benefit upon death
10% of Sum Assured or Surrender Value, whichever is higher
Maturity Benefit
100% of Sum Assured 
  • Early Stage Cancer Benefit is payable once only.
  • If Cancer occurs within 6 months from the diagnosis date of Early Stage Cancer, the Cancer Benefit payout will be reduced by the amount paid for Early Stage Cancer Benefit. If Cancer occurs after 6 months from the diagnosis date of Early Stage Cancer, the Cancer Benefit payout will be the amount as described above.
  • This plan will terminate after a claim has been made for Cancer or Compassionate Benefit or upon maturity of the plan.
  • (1) Including extra premium charged on sub-standard life and excluding service tax, if applicable. Total premiums that have been paid to date refer to the actual premiums paid by for this policy.