Thoughts I’ve had while considering, purchasing, and getting insurance in Malaysia. The idea of this post came from several reader inquiries – how *does* one even start the process? How *do* you choose ‘the best insurance for you’?
Well, I’m sure it varies, but I have a Standalone Medical Card and Personal Accident Insurance. I’m not saying this is the perfect combo for protection (in fact, it’s probably not), but it works for me, as of right now, for a person like myself.
Note: Intentionally did not disclose which company I got my insurance from. Don’t want to seem promoting any one provider.
- (In 2014, upon seeing the millionth insurance advertisement) Alright alright I get it insurance is important I’ll get myself insured geez stop already.
- Wait don’t I already have insurance from my employer? I need to check my coverage there first. If it’s enough, I don’t have to get additional insurance, right?
- HR team seem pissed that I’m asking so many questions about the company insurance coverage.
- Alright. Good news is I *am* covered. Bad news is it’s not enough coverage for me, the company-provided insurance is very basic insurance. I think so, I wish I understand insurance better.
- So… yup. I guess I do need to get additional insurance for myself. Yippie yay. But which one?
- Life insurance… Personal Accident (PA) insurance… Medical card… Critical Illness… Oh my god this is impossible. There are so many types! Which one should I take?!?
- So according to advice received, someone like me (working professional, single) should give more priority to insurances providing coverage for nasty life events like sudden hospitalisation due to accidents and illnesses. Got it.
- So I guess what I’m looking for are Standalone Medical card and Personal Accident insurance? Medical card to cover cost of hospitalisation without upfront payment while PA to give a bit of money to my family in case I die or get disabled due to accident. Perggh morbid sial.
- So apparently I should have Critical Illness protection too in case I get any of these 36 health problems. Is Medical Card enough though? I still don’t know.
- Apparently it’s advisable for me to get Life insurance if I worry my family can’t get by financially if I’m gone. Well I don’t have a spouse, so this isn’t as important now. And my parents should have adequate retirement savings.
- I hate that I’m limited to only Takaful products. Non-Muslims have so much more options 🙁 Cheaper options, too.
- There are SO MANY insurance providers in Malaysia! Prudential, AIA, Allianz, Manulife, Zurich, Great Eastern, Berjaya, Tokio Marine. Banks like Maybank also offer insurance wtf.
- Process of elimination: START. My requirements: must be Takaful, must be well-known company, must have dedicated phone line for inquiries and claims.
- Ok, that was fairly easy. Not many insurance providers in Malaysia offer Takaful products, so I guess I’ll have to pick between a handful of options. Time to find insurance agents and find suitable insurance products.
- *Contacts ~10 agents*
- *All of them got back to me damn fast* This is a very competitive industry it seems.
- What I wrote: “Hi! I’m looking for insurance products focusing on hospitalisation and PA. Can you provide me a quote? I would like non-investment linked Takaful products, please.”
- What I received as replies: “Why you want non-investment linked when you can get money back with investment-linked product at the end of your term. Here are some investment-linked products suitable for you.”
- What I wrote back: “I prefer separating my insurance and my investments. Can you give a quote and coverage for non-investment linked insurance products, please?”
- In the end I went with the agent who was the least pushy about this issue.
- Difference between investment-linked and non-investment linked (as far as I know). Investment-linked products cost more. If I pick this one, I contribute a few hundred ringgits a month to an investment, usually long-term unit trust investment. The investment may or may not give me a decent profit rate, but usually they assure to give back at least the money deposited by the end of the term. During the whole time they give insurance coverage.
- On the other hand, non-investment linked gives me coverage for lesser monthly cost, but I won’t get the money back at all. Insurance agents like to say “so the money burn la”.
- I’m not promoting one over the other. I’m just saying I prefer to not mix my insurance and my investment. But now I know insurance agents prefer to sell investment-linked products.
- Meetup with insurance agent: Nice and polite guy. He showed me his agent license, then actively asked questions and tried hard to establish rapport. Super appreciate that. He asked me about my lifestyle habits and recommended this brand of frying pan that can fry fish with very low amount of oil.
- (Even now, years later, my insurance agent still sends me Hari Raya cards 🙂 Really sweet guy.
- We talked about what I want and the options available. I told him that my concern is more to not burden my family in case anything happens to me. I also don’t want to worry about upfront hospitalisation cost (which is why I lean towards medical card). He took out his tablet and asked questions about my age, smoking status, marital status, job and things like that.
- So apparently, the reason why insurance agents push for meetup is because it’s just easier to do it in person. My agent input all this info in his tablet, which automatically calculates the cost of the monthly premium.
- So for example, if I feel that the hospitalisation benefit is a bit on the lower side (say if I want RM200 per day instead of RM100 as cash benefit), he can tweak this for me and the software will give a new quotation. Although… I wonder what stops insurance service providers from putting this software online so people can check themselves?
- Then he also asked if I wanted any riders and OMG there are so many types of riders. Riders are like add-ons to the insurance, for better protection/additional coverage. There are women-specific ones, additional countries one, additional illnesses aside from the standard 36, etc. Agents will offer and can explain these in more detail during meetup as well.
- Wow some insurance plans are really complicated. Some offer all-in-one Medical Card+Investment+PA+TPD+Critical Illness. How much? RM6700 per year?? That’s more than RM500 per month, I can’t afford that..
- In the end, I choose a standalone medical card from a popular insurance provider. It costs RM113.33 per month (the price has since increased to RM120.13). This card can be used to get myself admitted to hospital, in case anything happens. They offer admission to a lot of private, well-known hospitals all over Malaysia. I have high annual and lifetime limit (this is good if suddenly need major operation that costs a lot; mine is RM190k), pre and post care, home nursing, guardian allowance, overseas coverage and reasonable room and board coverage (so I will be relatively comfortable during hospitalisation). There is no ‘payout’ for death or permanent disability, and no cashback incentive for no-claim. That sucks but that’s what you get for this price.
- I have this card since 2014. So far I have not used it, and hopefully I’ll never get to use it.
- Fast-forward to 2016. More savings. I should get that PA insurance now.
- This time around it’s a bit easier! PA insurance is a lot easier to get than medical card! I can just apply online!
- Browsed online for Takaful PA insurance products. This one is female specific. Wah can cover female-related illnesses and snatch theft. This one is for breadwinner. Wah can pay off selected outstanding debt.
- Like before, I don’t want investment-linked plans. My priority is to get one that can pay at least 5-10 years of my living expenses in case I get permanently disabled due to accident (or if I die, this amount goes to my family).
- Hmm the majority of insurance comparison websites assume that I want investment-linked plan.
- Found a suitable one that is not investment-linked! This PA insurance will give out RM300k for death or TPD for RM31.80 per month. I can afford that. I might need to increase this amount in the future, but it’ll do for now. Cool. Click click click, submit. One of the sales assistants called me to confirm auto-payments via credit card and I’m covered!
- So now I’m paying RM120.13 for the Medical Card + RM31.80 for the PA insurance = RM151.93 ‘burned’ every month.
- Are they enough though? Am I over or under-insured? How is my coverage?
- Have I named my family as beneficiaries to the insurance money? I should check that.
- Do I need any other types of insurance? I don’t know, still finding out. Maybe Critical Illness now?
- Do I need to re-compare and update my insurance for best rates? Also still trying to find out.
- I took the insurances while I was employed. I’m self-employed now. Will there be a difference? Do I need another plan? HELP ME
As you can see, I ended some thoughts with more questions. But I did learn a few things:
- There was a push for investment-linked insurance. I don’t know the reason. More commission kot.
- If you’re buying insurance for the first time, know that some insurance products are ‘set meals’ while some are ‘ala-carte’. Every insurance provider have different set meal combos, sometimes combining all (Life insurance + Critical Illness + PA + Investment). Then they also have ‘side dishes’ (additional riders).
- Agents must have licenses.
- Insurance premiums can be auto-deducted monthly with credit cards. Good, can earn points.
- The insurance comparison websites *can* help you compare insurances, but they are still too confusing to be useful. At least, that’s my view.
What insurance do you have? Was your process similar or different from mine? Have a question about insurance in Malaysia that I didn’t address? Share them too!
Enjoyed this thought-process-type posts? You might like my 44 thoughts I’ve had grocery shopping in Malaysia article 🙂
EDIT: Additional info
Thanks to everyone who offered more information! Please check below and the comment section for additional info about buying in insurance in Malaysia.
- Yes, agents do get a healthy commission from insurance premiums. They get a percentage of the premium (at least for the first year).
- You can definitely get PA insurance without agents. This is called the direct distribution channel: Insurance provider direct to you, without intermediary. I still suggest you to contact agents though, because (1) they offer more products, (2) they can explain terminologies in layman’s terms, and (3) they’re just trying to make an honest living, too.
- BNM recently released a concept paper about direct distribution channel for ‘Pure Protection Products’. We should expect the availability of more insurance products online in the future 🙂
- Premium for non-investment linked products will increase as you age. If you don’t like this, pick investment-linked products.
EDIT 2: An alternative to medical insurance: social sharing concept
1. Sharers (members) share inpatient hospitalisation costs of the community.
2. Sharers share the actual medical costs incurred. Pay RM 0 if no one falls sick in the month. RM 50* maximum a month
3. A sharer can put forth up to RM1 million medical costs for sharing in the first year of joining. Additional RM200,000 limit for each subsequent year.
4. RM5,000 bereavement payment in the event of untimely death, additional RM 1,000 for every subsequent year.
5. More than 200 panel hospitals in Malaysia-135 government hospitals, 86 private hospitals (https://www.lifeengineering.
6. Life Engineering pays for the hospitalization first only then crowd share
They are kind enough to offer Ringgit Oh Ringgit readers a lifetime waiver of annual participation fee worth RM100. Use the code ‘RINGGIT08A18‘ when you register – valid from 1st August to 31 August 2018 for the first 20 people between 8-40 years old. Sign up here.