Types of Insurance in Malaysia

There are few types of insurance and each serves a different purpose. 

People buy insurance is for financial protection and for risk transference.

The risk transfer here means that by paying a fee to the insurer, the insurer in turn provides insurance cover for a particular event.

Basically the life insurance can be segmented to the life insurance, critical illness, medical insurance & accidental insurance.

Life insurance is meant to replace the income of the breadwinner of the family if sudden death were to occur.

Example if the family needs at least Rm5k per month to pay for bills, food, tuition fees, clothings, that translates to Rm60k per year or Rm600k for 10 years. 

This doesnt even take into account the education fees if he has a young 1 yo daughter nor does it take into account the inflation.

The purpose of the Critical Illness is to provide a lump sum of money if the person being covered is down with a critical illness.

Example Stroke, bedridden and unable to generate an income for the family.

This is even worse than death because on top of the daily family expenses, the family needs money for the medical bills.

This is where the medical insurance comes in. A 60 days ICU due to Stroke at a private hospital can costs Rm400k.

Of course the medical insurance is optional if you think the general hospital is goid enough for you. If you do buy the medical card, there is option to get treatment from second opinion. Choice is yours.

Accidental insurance pays in the event of death due to accident or lost of limbs die to accident. 

Example if a programmer lost both of his arms due to accident, will it impact his ability to generate an income?

Private Hospital ICU Costs

Many people does not know that for Intensive Care Unit (ICU) cases, the medical bills can be rather staggering, shocking even!

Spoken to a prospect that has a friend admitted to a private hospital due to Stroke, for 60 days in the ICU.

The hospital bill was well over Rm400,000!

Do check your health insurance on whether it is able to work in times of crisis.

You may also look at PruValue Med, which offers up to Rm2,000,000 medical coverage.

Leave a message if you need a quote.

Common problems when applying for Health Insurance

In this article, I would like to talk about the common problems people faced when applying for health insurance and it could be useful to determine which product to go for.

The most common problem faced is the health issue, especially at older age. Hypertension (high blood pressure), raised sugar level, raised cholesterol level are common for a person above 45 of age. 

For borderline cases and under control with medications, the application may be considered albeit with a loading (extra premium) applied.

Alternatively the applicant (for borderline hypertensive and under control with medication) may also consider PruSenior med health insurance which comes with RM3,000 co-insurance. 

Since it comes with a RM3,000 co-insurance (or commonly known as excess), there will not be a loading or exclusion. However the decision on whether to accept the case will be subjected to full Underwriting.

Another problem could be due to a "pre-existing illness". The pre-existing illness is specifically excluded in most of the Malaysian insurer. 

If a person has a pre-existing illness prior to inception of the policy, for example, a knee pain, the knee pain condition will be specifically excluded and/or with loading implied.

This is why where possible, get a medical card with high limit so that you do not need to 'upgrade' or buy a new policy as add-on in later years. Do checkout PruValue med with a RM1,000,000 ~ RM2,000,000 coverage.

Lastly as we get older the insurance charges increases may undermine our budget. Plan the insurance early (of course you pay longer but at least you are able to get insured without any loading/exclusions!)

Leave a comment if you need further information. Thank you for reading

Insurance Charges (Cost of Insurance)

To the readers of this blog, you may already know that insurance is a business of Risk Transfer or Risk Sharing (Takaful Concept).

The risks can be categorized into a few category:-

1. The age of the person (the older the person, the higher risk of claiming)

2. Smoking status (a smoker has higher chances of developing smoking related illness)  

3. Occupation (a construction worker posses different risk as compared to an office worker)

4. Gender (based on mortality rate)

5. Health Status of the person (a loading or extra charges may apply, for example mild hypertension)

By agreeing to pay a 'price' known as 'premium' the insurer in turn shall provide the financial assistance (coverage) in times of unexpected events such as untimely Death, Dread Disease (Critical Illness), Accidents, Total Disability & Hospitalization.

The coverage given comes with a costs based on the attained risk (as mentioned above) and not known to many, the costs (Insurance Charges) will INCREASE as we get older.

The next time you are given the Sales Illustration, do try to read and understand the associated charges and not only based on the 'flowery' sales talk by the agents.