Medical and health insurance products have been available in Malaysia since the 1970s. However, back then, most people relied heavily on government’s general hospitals, which provide healthcare at a much cheaper cost. Hence, to cater to the public, health insurance then were limited to personal accident, workmen’s compensation and motor (third party bodily injury) insurances.
However, according to a publication by Bank Negara Malaysia (BNM), titled “Developments in the Medical and Health Insurance Sector”, in the mid-1990s, sales of health insurance in Malaysia surged due to the introduction of personal tax relief for health insurance purchases (1996) and the loosening of restrictions on life insurers to sell health insurance (1997).
In recent years, a greater number of Malaysians have also been turning to private healthcare, to get quicker service and greater healthcare options, but it doesn’t come cheap. With the total expenditure on healthcare by Malaysians increasing steadily, it makes sense that more and more Malaysian residents are turning to health insurance for financial cover in the event of heavy medical expenses, if the need arises.
If you do not have a health insurance policy yet, it is time to consider getting one. Nobody wants to be stuck in a situation where he or she has to exhaust the savings to pay for medical treatment.
Which type of health insurance do you need?
There are 4 major types of medical policies:
- Medical Card/Health Card – covers hospitalisation and surgical benefits
- 36 Critical Illness or Dread Diseases Insurance – a lump sum benefit
- Disability Income Insurance – stream of income when you are unable to work
- Hospital Income Insurance – provides a specified sum of money on a daily, weekly or monthly basis if you are being treated in a hospital.
It is always recommended to have all four types to ensure better protection. However, for starters, if you are in the low risk age leading a low risk lifestyle, you can probably opt for basic coverage, such as a medical card, which provides allowance for hospitalisation, treatment, surgery and even ICU, in the event of illness. Depending on the policy you purchase, some medical cards provide insurance on death of total permanent disability, accidental death and disablement as well.
You can also choose not to purchase a disability income insurance or hospital income insurance, especially if you do not have dependents (i.e. children, aging parents).
What to do when purchasing a policy?
1) Do your research and find out what policies are available out there.
2) Shortlist a few policies from different insurance companies and ask your agents to compare the differences in the policies.
3) Once you have decided on a policy, decide on the sum insured and make sure the premium amount is a figure you are comfortable with.
4) Read and understand the terms and conditions of your policy before signing on the dotted line. To help policyholders better understand the policies, Bank Negara Malaysia has directed a move towards standardisation of terms used in policies to reduce confusion among policyholders.
Things to look out for
- definitions and limitations to payment of benefits
- how a disability is defined
- how soon after a claim can one claim again
- special provisions (succeeding policyholder after the first policyholder dies to avoid the hassle of declaring their health again)
- does the policy have guaranteed renewability – to ensure protection is available throughout and premiums are maintained despite recent diagnosis of illness.
Purchasing a health insurance policy has become more of a need than a want in today’s society. Yet, a fraction of people are still skeptical about buying medical insurance after hearing stories of people who face difficulties claiming against a policy after a surgery or medical treatment.
That is why it helps to understand what your health insurance policy covers and how you can make the most of it. Choosing the right insurance company will also help ensure smooth claim process, when the need arises.
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