Malaysia My Second Home (MM2H) is a program that allows people from all over the world who fulfill the requirements to stay in Malaysia. A 10-year visa and unlimited entries are given to those qualified for this program. It is supervised by the Ministry of Tourism Malaysia.
One of the criteria for applicants and their dependents including spouse and children to fulfill is they MUST purchase medical insurance policy from any insurance companies in Malaysia. The objective of this requirement is to make sure the hospitalization expenses and surgical fees of applicants and their dependents are well taken care of.
There are various types of medical insurance in Malaysia, namely medical card insurance (also known as hospitalization & surgical insurance), 36 critical illnesses protection and hospitalization income benefit which are common in Malaysia.
In this blog, I will focus on medical card insurance. In general, the major items covered under medical card insurance are hospitalization expenses like Room & Board charges for a bed or intensive care unit; surgical related fees due to diseases and accidents while you are in the hospital; surgical fees without hospitalization; pre-hospitalization treatment; post-hospitalization treatment; and outpatient cancer and kidney dialysis treatments.
A plastic card with the size of a credit card will be issued to the medical card insurance holder once the insurance application is approved by the insurance company.
There are three types of medical card insurance:
a) Standalone medical card insurance
b) Medical card insurance attached to term life insurance
c) Medical card insurance attached to whole life or investment-linked insurance
I will discuss standalone and medical card insurance attached to term life insurance here because these two types are more suitable to expatriates in Malaysia.
a) Standalone medical card insurance
Like its name, this type of medical card is an independent insurance and does not attach to other types of insurance. Almost all general insurance companies and a few life insurance companies offer this type of medical card insurance.
From policy contract’s point of view, some policies are guaranteed renewable, some are conditional guaranteed renewable and the rest are yearly renewable. The details on renewable issue will be discussed later.
Advantage: No other insurance premium like death or total & permanent disability premium will be incurred. Therefore, your insurance premium commitment is lesser.
Disadvantage: You will have to continue paying the annual premium even when you are diagnosed to have one of the 36 critical illnesses or become total & permanent disabled.
b) Medical card insurance attached to term life insurance
This type of medical card insurance is offered only by life insurance companies. It is attached to a term life insurance policy as a rider. Term insurance is also known as temporary life insurance.
A term insurance usually covers a minimal amount of sum assured like RM5,000, RM10,000 or RM20,000. The period of coverage is typically 10 years, 20 years, until age 60, 65 or 70.
Advantage: You get certain amount of life insurance coverage while you are staying in Malaysia.
Disadvantage: When the period of coverage expires, the medical card insurance expires too. The insurance charges for the term insurance are borne by policy holders.
Things to watch out when purchasing medical card insurance in Malaysia
1) Policy renewal condition
From policy contract’s point of view, some policies are guaranteed renewable, some are conditional guaranteed renewable and the rest are yearly renewable. Besides life insurance companies, more and more general insurance companies are offering guaranteed renewable type of medical card insurance in Malaysia.
Guaranteed renewable means your medical insurance can be renewed when it is due for renewal. Of course you can’t renew it anymore if your life time limit is used up.
Conditional guaranteed renewable means your policy must be claims free (never make a claim before) and in force for a period of TWO consecutive years in order to enjoy this guaranteed renewable advantage.
Yearly renewable means the renewal of your policy is subject to the approval of the insurer. You have no control at this.
My opinion: Make sure the policy you buy is guaranteed renewable. Otherwise, you may not be allowed to renew if you contract a critical illness or your medical bill reaches the annual limit; and it is very difficult to purchase another health insurance policy in Malaysia.
Therefore, always go for guaranteed renewable medical card.
2) As charged or preset amount based on surgical schedule
As charged means whatever costs incurred under an operation, subject to the annual limit or per disability limit.
Preset amount means the maximum pay-out from the insurer for each benefit, for example, some insurers pay surgical fees but only up to a preset amount of RM10, 000.
My opinion: You get what you pay for in this type of insurance. Although medical insurance with preset amount is cheaper compared to as charged type, still go for as charged type because surgical fees always chalk up a big portion of a medical bill.
We will continue to discuss other areas which you must pay attention to when purchasing medical insurance in Malaysia in our next blog session including co-payment, pre-existing conditions, specified illnesses exclusions, waiting period, etc. Do check it out!
Saturday, September 09, 2006
Tuesday, September 05, 2006
Malaysia: Snatch theft attack: Is your insurance covered?
Malaysia: Snatch theft attack: Is your insurance covered?
Recently a friend of mine asked me a few questions about insurance claims related to snatch theft attack. I hereby used his questions together with a few case studies to share with you what I told him.
Case study I:
A saleslady was snatched. she was pushed down a staircase by the thief. She landed head first. She was rushed to a government hospital and warded in a serious condition. She passed away later. The police had classified this case as murder.
What types of insurance are payable?
1) Death benefit under Personal Accident insurance: Payable*
2) Death benefit under Group Personal Accident insurance: Payable*
3) Death benefit under Whole Life insurance: Payable
4) Death benefit under Endowment insurance: Payable
5) Death benefit under Investment-linked insurance: Payable
*Death benefit on all Personal Accident policies is payable regardless of number of policies the deceased have.
Case study II:
A 25-year-old administrative executive was seen struggling with two snatch thieves on a motorcycle who had grabbed her handbag. She clung on the bag and was dragged about 4m. She is now warded at a private hospital with injuries to her spine and paralysed from the waist down.
What types of insurance are payable?
1) Hospitalisation expenses & Surgical fees benefits under Medical & Health insurance (Commonly known as medical card insurance): Payable**
2) Medical expenses benefit under Personal Accident insurance: Payable**
3) Temporary total / partial disablement weekly benefit under Personal Accident insurance: Payable**
4) Emergency accidental out-patient treatment benefit under Medical & Health insurance: Payable**
**All the above benefits claim are based on reimbursement basic. Reimbursement means you get back what you lost or you can’t claim more than your actual expenses.
Total & Permanent Disablement (TPD) benefit under Personal Accident insurance: Payable***
TPD benefit under Life insurance: Payable***
TPD benefit under Endowment insurance: Payable***
TPD benefit under Investment-linked insurance: Payable***
***The definition of TPD among insurance companies may vary, but it is commonly defined as:
i) Totally and permanently for the insured person to earn any wages; or
ii) Loss of two limbs (example: both arms, both legs, or one arm and one leg, totally loss of sight of both eyes) by amputation; or
iii) Loss of use of two limbs; or
iv) Totally and permanently cannot perform activities of daily living like dressing, bathing, eating, walking, etc.
Case study III:
A 58-year-old senior citizen was riding her motorcycle to a community hall in an early morning about 5am. She was said to have been waylaid by a group of four young men. She fell off her motorcycle and injured her face and died in hospital later. Her purse and jewellery were missing. Police reported that she died of a heart attack.
What types of insurance are payable?
Death benefit under Life insurance: Payable
Death benefit under Endowment insurance: Payable
Death benefit under Investment-linked insurance: Payable
Death benefit under Personal Accident insurance: NOT PAYABLE****
****Death benefit under Personal accident insurance is only claimable when the cause of death is due to accident. In this case, police report says the victim is died of heart attack.
Recently a friend of mine asked me a few questions about insurance claims related to snatch theft attack. I hereby used his questions together with a few case studies to share with you what I told him.
Case study I:
A saleslady was snatched. she was pushed down a staircase by the thief. She landed head first. She was rushed to a government hospital and warded in a serious condition. She passed away later. The police had classified this case as murder.
What types of insurance are payable?
1) Death benefit under Personal Accident insurance: Payable*
2) Death benefit under Group Personal Accident insurance: Payable*
3) Death benefit under Whole Life insurance: Payable
4) Death benefit under Endowment insurance: Payable
5) Death benefit under Investment-linked insurance: Payable
*Death benefit on all Personal Accident policies is payable regardless of number of policies the deceased have.
Case study II:
A 25-year-old administrative executive was seen struggling with two snatch thieves on a motorcycle who had grabbed her handbag. She clung on the bag and was dragged about 4m. She is now warded at a private hospital with injuries to her spine and paralysed from the waist down.
What types of insurance are payable?
1) Hospitalisation expenses & Surgical fees benefits under Medical & Health insurance (Commonly known as medical card insurance): Payable**
2) Medical expenses benefit under Personal Accident insurance: Payable**
3) Temporary total / partial disablement weekly benefit under Personal Accident insurance: Payable**
4) Emergency accidental out-patient treatment benefit under Medical & Health insurance: Payable**
**All the above benefits claim are based on reimbursement basic. Reimbursement means you get back what you lost or you can’t claim more than your actual expenses.
Total & Permanent Disablement (TPD) benefit under Personal Accident insurance: Payable***
TPD benefit under Life insurance: Payable***
TPD benefit under Endowment insurance: Payable***
TPD benefit under Investment-linked insurance: Payable***
***The definition of TPD among insurance companies may vary, but it is commonly defined as:
i) Totally and permanently for the insured person to earn any wages; or
ii) Loss of two limbs (example: both arms, both legs, or one arm and one leg, totally loss of sight of both eyes) by amputation; or
iii) Loss of use of two limbs; or
iv) Totally and permanently cannot perform activities of daily living like dressing, bathing, eating, walking, etc.
Case study III:
A 58-year-old senior citizen was riding her motorcycle to a community hall in an early morning about 5am. She was said to have been waylaid by a group of four young men. She fell off her motorcycle and injured her face and died in hospital later. Her purse and jewellery were missing. Police reported that she died of a heart attack.
What types of insurance are payable?
Death benefit under Life insurance: Payable
Death benefit under Endowment insurance: Payable
Death benefit under Investment-linked insurance: Payable
Death benefit under Personal Accident insurance: NOT PAYABLE****
****Death benefit under Personal accident insurance is only claimable when the cause of death is due to accident. In this case, police report says the victim is died of heart attack.
Monday, September 04, 2006
Malaysia: The truth about life insurance
Malaysia: The truth about life insurance
Life insurance is the foundation of total financial planning. Without it, whatever types of planning are baseless.
The basic purpose of life insurance is to create cash. Nothing more, nothing less.
Life insurance is a “contract for delivery of money”.
Life insurance is like a charity money changer, you give her 3 cent, she will give you RM1. You are buying discounted Ringgit.
Whether you buy life insurance or not, you already have it. Either you are insured by a insurance company or self-insured by your own pocket.
Life insurance is a contract for time and money. If you ran out of time, the contract will give your loved one money. If you have time, the contract will give you money.
When you save money in a bank that is call accumulation. But, if you save money in life insurance, you create an instant estate when you need it most.
Life insurance is sold because people understand the fact of life. Human beings either lives too long, die too soon or become disabled due to accident or sickness. Money is needed in all these events.
You can’t buy insurance when you need it, you must buy it before your need it. No life insurance companies are going to insure someone who is disabled or has critical illness.
Life insurance is not purchased because someone might die but because someone else has to live.
Life insurance is a concept of risk sharing.
Life insurance provides you financial support in times of emergency but should not view it as an investment vehicle to make profits.
If you intend to grow your wealth, it makes sense that you protect the most important investment – you, by using life insurance.
Life insurance is the foundation of total financial planning. Without it, whatever types of planning are baseless.
The basic purpose of life insurance is to create cash. Nothing more, nothing less.
Life insurance is a “contract for delivery of money”.
Life insurance is like a charity money changer, you give her 3 cent, she will give you RM1. You are buying discounted Ringgit.
Whether you buy life insurance or not, you already have it. Either you are insured by a insurance company or self-insured by your own pocket.
Life insurance is a contract for time and money. If you ran out of time, the contract will give your loved one money. If you have time, the contract will give you money.
When you save money in a bank that is call accumulation. But, if you save money in life insurance, you create an instant estate when you need it most.
Life insurance is sold because people understand the fact of life. Human beings either lives too long, die too soon or become disabled due to accident or sickness. Money is needed in all these events.
You can’t buy insurance when you need it, you must buy it before your need it. No life insurance companies are going to insure someone who is disabled or has critical illness.
Life insurance is not purchased because someone might die but because someone else has to live.
Life insurance is a concept of risk sharing.
Life insurance provides you financial support in times of emergency but should not view it as an investment vehicle to make profits.
If you intend to grow your wealth, it makes sense that you protect the most important investment – you, by using life insurance.
Subscribe to:
Posts (Atom)