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[UPDATED] 44 Thoughts While Buying Myself Insurance in Malaysia

 Insurance in Malaysia

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.

  1. (In 2014, upon seeing the millionth insurance advertisement) Alright alright I get it insurance is important I’ll get myself insured geez stop already.
  2. 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?
  3. HR team seem pissed that I’m asking so many questions about the company insurance coverage.
  4. 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.
  5. So… yup. I guess I do need to get additional insurance for myself. Yippie yay. But which one?
  6. 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?!?
  7. 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.
  8. 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.
  9. 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.
  10. 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.
  11. I hate that I’m limited to only Takaful products. Non-Muslims have so much more options 🙁 Cheaper options, too.
  12. 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.
  13. Process of elimination: START. My requirements: must be Takaful, must be well-known company, must have dedicated phone line for inquiries and claims.
  14. 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.
  15. *Contacts ~10 agents*
  16. *All of them got back to me damn fast* This is a very competitive industry it seems.
  17. 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.”
  18. 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.”
  19. 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?”
  20. In the end I went with the agent who was the least pushy about this issue.
  21. 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.
  22. 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”.
  23. 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.
  24. 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.
  25. (Even now, years later, my insurance agent still sends me Hari Raya cards 🙂 Really sweet guy.
  26. 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.
  27. 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.
  28. 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?
  29. 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.
  30. 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..
  31. 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.
  32. I have this card since 2014. So far I have not used it, and hopefully I’ll never get to use it.
  33. Fast-forward to 2016. More savings. I should get that PA insurance now.
  34. This time around it’s a bit easier! PA insurance is a lot easier to get than medical card! I can just apply online!
  35.  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.
  36. 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).
  37. Hmm the majority of insurance comparison websites assume that I want investment-linked plan.
  38. 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!
  39. So now I’m paying RM120.13 for the Medical Card + RM31.80 for the PA insurance = RM151.93 ‘burned’ every month.
  40. Are they enough though? Am I over or under-insured? How is my coverage?
  41. Have I named my family as beneficiaries to the insurance money? I should check that.
  42. Do I need any other types of insurance? I don’t know, still finding out. Maybe Critical Illness now?
  43. Do I need to re-compare and update my insurance for best rates? Also still trying to find out.
  44. 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.

 

 

 

Author

17 comments

  1. Hello Suraya, this is a very well written article about insurance, it probably gives a lot of insights to people who don’t understand insurance. I myself planned to write one similar topic as this too!

    Anyway, I guess the reason why agents push for investment-linked products is that it has by far the most complete insurance coverage. Life, PA, critical illness, TPD, hospitalization – all in one. On the other hand you have your returns compounding every year from the investment. The premium can be adjusted according to your budget.

    Its really good for you to have yourself covered for your medical expenses. Maybe you can consider insuring yourself against critical illness next. Thanks for your sharing!

    1. I still don’t understand insurance that well, if I’m honest. So I look forward to your post on that!

      Fair point about the ‘complete’ aspect. I just wish I wasn’t judged so much for choosing non-investment insurance. Some of the agents seem frustrated by that :/

      I guess now I have to look for CI!

  2. Hi Suraya, great article sharing your experience choosing a Takaful =)

    For me, as an employee with company group medical card coverage, I thus subscribed to an Income Protection Takaful / Life Takaful in case of my death and TPD (Coverage of RM400k) & 32 critical illnesses (Coverage of RM200k) with monthly waiver. Monthly premium is RM250. Basically to cover monthly expenses for my family for the next 8 years in case anything happened to me.

    I’m planning on getting a medical card rider on top of it & it will cost additional RM100 with unlimited annual limit & RM850k lifetime limit. Planning to resign & going elf employed later this year thus I will need a medical card in which upon resignation, obviously, I can no longer use current company group medical card.

    # I learned that it is more important to have unlimited annual limit over unlimited lifetime limit. This is simply because if one has to undergo a surgery that, for example, cost RM150k now but has a medical card with an annual limit of RM100k, then one has to fork out another RM50k cash. At the same time, one will used up the whole coverage for that year. Therefore, having medical card with unlimited lifetime limit but limited & low annual limit is quite risky. *An angiogram procedures with multiple stenting as a heart disease treatment can easily cost thousands! Or a pacemaker / ICD / CRT for heart can easily cost up to RM80k! Crazyyy…especially with limited annual limit!

    # For the push for investment-linked takaful, I learned that basically it is not the same as our other unit trust or stock market investment objective. The main purpose of it is, if there is any profit from the investment, that profit will actually be used to cover the price increased of the monthly premium. So, instead of you paying RM120.13 (an increased of RM6.80), you will keep paying RM113.33. That profit from the investment will actually pay that extra increased of RM6.80 monthly. And this will continue until the price of the premium increased is bigger than the profit & has depleted and THEN, you will need to pay the extra price increased. That’s how it works. *I stand corrected if there if I understand this wrongly*

    So, basically the objective is not for us to get back some cash by the end of the term. But, if there’s any profit and we get some cash anyway, then it’s a bonus. But its main purpose is to make sure our Takaful coverage is enforced as long as possible without us paying more. =) However, with inflation, in times, perhaps there is still inevitable price increase.

    # I also heard agents using example as follows :

    Takaful products are the Nasi Lemak and Plain Sambal.
    The riders are the Kacang, Timun, Telur Rebus, Telur Mata, Sambal Kerang, Ayam Goreng or even Paru!
    So we can basically have the basic Nasi Lemak with Plain Sambal only or top it up with Sambal Kerang & Paru. But, of course it will cost a little bit more! Hehe..

    # Better to engaged with good & licensed agents who doesn’t scare us with terrifying stories of accidents and death but, agents who really explain the terms of conditions in lay man term. Most importantly is to explain the exclusion criteria (when the medical card does not covers a specific situation example: injury from demonstration / war activity).

    1. This is awesome feedback, Shafiq!

      I like the point about unlimited annual limit vs lifetime limit. Mine looks quite low then! I do recall my agent saying there’s barely any that offer unlimited (annual or lifetime).

      Now super semangat actually to review my insurance policies. I (and other readers) super appreciate this. Your monthly premium after that medical card rider is RM350 per month then for TPD+CI+Medical card? That’s with investment too?

      1. #Most latest Takaful products available on the market now are quite competitive and good in terms of coverage. The only thing that is quite challenging today is to find a good agent to help us to get a medical card and life Takaful protection based on what we need & our cash flow. Because the bigger the monthly premium that we pay, the bigger the commission that an agent get. So it’s super important to find agents that focused on our income, cashflow & needs. Not on selling products only. Thank God I’ve met great agent who can guide me on this…syukurrr

        #The latest quotation that I received is RM350 for Death + TPD + CI + Medical Card. But if I’m not mistaken there must be some reduction in the CI coverage because of the new medical card rider. And yes, i opt for an investment-linked takaful product. *The monthly premium might be a little bit different for everyone because of age, health status & occupation risk etc.

        #Anyway, I have been reminded many times by my agent that Takaful or insurance main objective is for protection. A way for our family & waris to survive every day life if anything happened to us, the breadwinner. And also to care for us in case *mintak jauh* we are involved in an accident & somehow disabled for life.

        If we are looking for investment profit, it’s better to invest somewhere else and not in takaful / insurance because there are many other products in the market that can give better return than ‘investing’ in takaful or insurance =)

  3. 8 years on and less dumb with my finances, I can’t but felt cheated by the obscene amount that went towards the ‘investment’ that performed horribly relative to my current portfolio. Will peruse the policy and statement to see what options I have.

    I have shared your article with my friend who is in the midst of deciding. Do write more about this topic as it does eat into our spending. Cheers.

    1. Hi Mike,

      No one is not dumb with money. I know I did so many dumb mistakes, too. Even Warren Buffet made mistakes!

      I have updated this article with new info, find it in the edit section 🙂

      Thanks for sharing the article, appreciate it!

  4. I think AIA and Allianz Insurance offers unlimited overall medical coverage.
    You may check with the agents for more details.

  5. Dear Suraya,

    Would like to share with you my 2 cents view on insurance. Disclaimer: I am not an insurance agent but have few insurance policies in hand.

    The premium for medical card will increase according to age (normally will increase every 5 years). Example if the Premium for medical card (stand alone) at 30 years old is RM 100.00. You pay for that amount. But when the premium rise to RM 150.00 at the age of 35 years old, you have to increase the premium to RM 150.00 from RM 100.00. In other words, the premium for standalone medical card will increase from time to time. Remember, when we grow older, say example 60 years old, the premium can have a significant increase. The premium paid is not certain in future and subject to revision.

    Compared with investment-linked, the increase of the premium can be contra off with the value of investment you accumulated throughout the years. Investment-linked normally comes with package where part of your premium is placed in unit trust to generate income to cover the increased premium of medical card. In other words, the premium you pay now will be the same in 30-40 years later. This save a lot of $ compared to stand alone. Apart protection, we can safe & generate some income in this policy. As you know, medical card is for long terms especially for our golden age.

    I have bought one investment-linked medical card 11 years ago..The premium I pay now is still the same when i first bought i.e. RM 200.00 a month. It covers waiver (the insurance company will pay your premium in the event you or spouse are disabled) + life + disability + 36 illness + medical card + PA. Insurance’s investment is quite stable. My cash value in this investment-linked now is around RM 15,000.00. I can withdraw this sum whenever I want !!! But i choose to role the $ inside cause you will generate more $ there. I believe this sum can easily cover the increase of medical premium for atleast another 20 years. Imagine, the premium of RM 200 for 11 year ago and 20 years later. Isn’t it cheap and worth !!!

    I have 3 investment-linked policies and all the actual return for investment is far higher than the projected from the quotation. Bear in mine, all insurance company are governed by Bank Negara. So, I don’t think they can simply invest that will affect the public.

    Please also take note that in investment-linked, your policy continues until you don’t pay the premium or you attain the full age of 90 or 100. But in stand alone medical card, your renewal is on yearly basis and depends on your health condition. Example, if you are diagnosed with 36 critical illness last year (touch wood !!!) then most likely you will not be able to renew your medical card this year. Your protection ends when you sakit. No insurance company will insure a sick person. If they are generous to let you renew your medical card, I am sure a lot of exclusion clauses and high premium will be imposed on you. This is a realistic world !!!

    Of course, everything has it pros and cons. Buying insurance is a long terms and life time commitment. So, have to think carefully before enter into that contract. Once you commit to it, please continue and don’t simply terminate or cancel it. For me, you will see some unexpected income in your insurance in long terms (if you choose investment-linked product). This is really a bonus man..

    Please take note that I am no promoting investment-linked insurance but personally think that that is a good policy for long terms protection and value for $. So far, I don’t see any cons in investment linked…unless someone enlighten me here. Hehe.

    Whatever I said here is based on my understanding on the insurance policy I have. I prefer to read the terms myself rather than barely listen to the insurance agent.

    But, I stand to be corrected if there is any wrong info given.

    Cheers !!!!

    1. Dear Terence,

      Wow, thank you for the insight! Your comment seriously made me consider switching to investment-linked now. Like you said, it’s not great for one’s premium to keep increasing!

      Time to research more investment-linked insurance. I have a preference to get them from online distributors, but I don’t think any are available yet :/ If anyone knows, please add feedback here!

      Cheers!

  6. Hey Suraya,

    Unlimited in EVERYTHING always comes with a catch! Especially check for soft limits on certain illnesses such as Cancers and Kidney Dialysis, because we might still be alive for a long time with this illnesses given ongoing treatment. Ongoing treatment means ongoing costs. This is where higher annual limits with no lifetime limits will come in handy. Hope that helps somehow. 🙂

  7. Hi Suraya! I always read your article. However, maybe i missed out on this topic. I would like to throw my opinion as well. Insurance products are very competitive compared to takaful products. But i can see the potential growth for takaful. When the takaful pool of money become larger maybe they can offer great products just like insurance. There is takaful product (standalone) that offer unlimited lifetime limit (you dont have to renew every year. But please read on T&C first). Maybe you can consider to upgrade if you have extra cash OR just ask quotation for investment-linked BUT with the lowest sum covered, medical card + waiver. Thats all. Bear in mind, in investment-linked also you need to topup if needed. They stated in the policy something like this (i’m not quite remember) “it is possible that fund value is not enough…you may need to increase your premium/contribution…”. I’m not saying that dont buy this type, but they never promise. I just want to make sure everyone has informed decision. For me myself, just like you, i do not put everything in one product. I have medical card from company A, life and CI from company B, and others for company C etc. Hope this can help 🙂

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