Should a person spend on average RM200/mth on insurance, in 10 years of paying the premium he/she would have contributed RM 24K.
Assuming a person takes up insurance at the age of 25, at age 60 (retirement age) he/she would have paid RM 84,000!
Do note that the premium payment does not stop at age 60, as the client is required to pay, even after retirement if he/she wants to keep getting protected, especially the medical insurance.
So what are the ways to save on insurance premium? Well, first lets take a look at how insurance works.
Insurance is a business of risk transference. Whenever someone does not buy insurance, he/she is having 100% of the financial risk against human events such as hospitalization bills, death, total disability, critical illness.
By transferring the risk to the insurance company, and the client agrees to pay certain 'fee' called insurance charges, the insurance company in turn agrees to 'insure' the client against financial losses due to the said event as stipulated in the contract.
The first trick in order to save on premium is transfer 'lesser' risk to the insurer. In insurance term, it is called 'deductibles' or 'co-insurance'. Westerners call it 'excess'.
Also known as 'cost-sharing-concept' by the insurance company whereby the client agrees to share the bill, more often something that is 'affordable' to the client.
For co-insurance, there are various plans that offers different level of cost sharing.
By incorporating various cost sharing concept, the client is transferring lesser risk to the insurance. Plans with co-insurance or deductible is definitely much more cheaper than plans with full claims.
The thing is, most of us hate to go to hospitals. I would say that no sane person would want to go to the hospital (except for insurance agents because it is our job to do so!) and in our lifetime, we would only probably go 2-3 times for something major.
Hence plans that are offering full cover may sound nice but the fact is, you are already paying the higher premium of which the 'co-insurance' or 'deductible' has already been incorporated.
So guys, do take a look at the various deductible or co-insurance before inking on the lifetime insurance contract.
Assuming a person takes up insurance at the age of 25, at age 60 (retirement age) he/she would have paid RM 84,000!
Do note that the premium payment does not stop at age 60, as the client is required to pay, even after retirement if he/she wants to keep getting protected, especially the medical insurance.
So what are the ways to save on insurance premium? Well, first lets take a look at how insurance works.
Insurance is a business of risk transference. Whenever someone does not buy insurance, he/she is having 100% of the financial risk against human events such as hospitalization bills, death, total disability, critical illness.
By transferring the risk to the insurance company, and the client agrees to pay certain 'fee' called insurance charges, the insurance company in turn agrees to 'insure' the client against financial losses due to the said event as stipulated in the contract.
The first trick in order to save on premium is transfer 'lesser' risk to the insurer. In insurance term, it is called 'deductibles' or 'co-insurance'. Westerners call it 'excess'.
Also known as 'cost-sharing-concept' by the insurance company whereby the client agrees to share the bill, more often something that is 'affordable' to the client.
For co-insurance, there are various plans that offers different level of cost sharing.
- As inpatient (meaning if the client is admitted to the hospital): A minimum RM 300 or 10% and up to a maximum of RM 1,000 co-insurance shall apply.
- As outpatient (meaning if the client is not admitted to the hospital): A 10% and up to a maximum of RM 2,000 co-insurance shall apply.
For deductible, there are options of RM 3,000, RM 10,000, RM 300 deductible.
By incorporating various cost sharing concept, the client is transferring lesser risk to the insurance. Plans with co-insurance or deductible is definitely much more cheaper than plans with full claims.
The thing is, most of us hate to go to hospitals. I would say that no sane person would want to go to the hospital (except for insurance agents because it is our job to do so!) and in our lifetime, we would only probably go 2-3 times for something major.
Hence plans that are offering full cover may sound nice but the fact is, you are already paying the higher premium of which the 'co-insurance' or 'deductible' has already been incorporated.
So guys, do take a look at the various deductible or co-insurance before inking on the lifetime insurance contract.
