Everything You Need to Know About Insurance
Understanding insurance can be a very scary task. However, we’ve done our best to simplify it in this blog and in the videos that accompany each section. Hopefully with this, you’ll have answers to the most common questions. And if not, feel free to leave your question in the facebook group
What does a medical card cover
Every insurance company has a list of things they will not cover. However in general, medical cards will not cover anything cosmetic such as:
- Plastic surgery
However, there are certain cases where your medical card will cover talking to a few different specialists before you decide to make any decisions as well as prescribed drugs for certain conditions. You can learn more about these coverages in our post about the most important aspects of a medical card.
Understanding standalone medical card insurability
If you were on a standalone medical card this year and had to claim it, you would still be able to continue having that policy same policy. The only reason an insurance company would be able to raise the premium is if they were planning to raise everyone's premium (in other words, they cannot discriminate against people who have had to claim the insurance).
That said, if you were to stop paying the premium, your insurance contract would be terminated and if you were to request for insurance again in the future, they will determine your eligibility and premium based off the new tests.
What is a non cashless medical card
Some insurance companies offer lower premiums for the sme benefit and the reason for that is because when you use any of the benefits, you will be expected to pay first from your own pockets and then make the claim after.
The difference between standalone medical cards and investment linked medical cards
This can be a whole blog post on its own, but the main difference is that standalone medical cards are perfect for those who believe they will not need medical insurance in the future. This is primarily true for expats who will be only here for a few years.
Investment linked medical cards are typically meant for people who will need medical insurance for the rest of their life. What investment linked medical cards do is they take the additional premium that you are paying and will help invest it for you. The idea is that they will then use that additional proceed in the future to pay for the medical insurance piece which would be higher than the premium that you are paying.
Can you recreate an investment linked policy
Because investment linked policies are more expensive than stand alone medical cards, a good question to explore is whether you can recreate the investment linked policy by taking the difference in the premium and invest it so that you can use that income in the future to supplement your stand alone premium.
The simple answer is yes; you can take that difference and recreate it yourself. However, it also means you must have the discipline to put that additional money aside, then you would also need to make sure not to touch that money in the future. Not to mention, that you would need to pay attention to the investments themselves.
This is a failing situation as now you're constantly testing willpower, and your mental health as you will always have to think about it, leaving you far less mind space to think and enjoy the rest of your life.
What determines the premium of an insurance policy
Some of the key criteria that determines your insurance premium are:
- What the benefits entails – the more benefits, the higher the premium
- How old you are – the older you are, the higher the premium
- Your health history – if you have had health issues in the past, your premium will be higher
- Your family's health history – if your family members have been shown to have health issues, your premiums will be higher
- Your lifestyle – if your job requires you to be in dangerous areas, your premiums will be higher
Should you get international health insurance
In most cases, having an annual travel insurance will be sufficient as it will be able to pay for any accidents and hospitalisations that may be needed. It is worth noting that most annual travel insurance will cover you for up to 90 days at once.
The difference between travel insurance and medical cards
One of the key differences between travel insurance and your benefits with medical cards is that with travel insurance you will have something called emergency expatriation. What this does is if you were to ever get hurt and require some sort of emergency vehicle to bring you to the nearest hospital for surgery. These vehicles can be a simple ambulance ride to getting a helicopter to get you in the forest.
Besides that, travel insurance will also cover a lot of other flight related delays.
Pre existing medical conditions
Depending on the severity your pre existing medical conditions, it is still possible for you to get medical insurance. What will most likely happen is that the insurance company will do an assessment of your current conditions and depending on what comes back, they may still be willing to insure you (at a higher premium) or be willing to insure everything else except the medical conditions.
An example would be high blood pressure. If you have high blood pressure and the insurance company sees that you are taking care of yourself, they may be willing to take you in.
There are insurance companies out there who are willing to take on different types of pre existing medical conditions so it's up to you to work with someone to find those insurance companies.
What is total Permanent Disability (TPD)
The definition of total permanent disability (also known as TPD) has changed throughout the years. In old insurance policies, total permanent disability might have required two of your limbs to be severed (ie losing as arm and a leg). So losing a finger or an eye would not be considered to be a permanent disability.
However, newer policies are a lot more humane. Now, you would be entitled to total permanent disability benefits if you cannot fulfill at least 3 activities of daily living. The activities of daily living are:
- Bathing/Washing – The ability to wash in the bath or shower (including getting in or out of the bath or shower) or wash by any other means.
- Dressing – Putting on and taking off all necessary items of clothing without requiring assistance of another person.
- Eating – All tasks of getting food into the body once it has been prepared.
- Mobility – The ability to move from room to room without requiring any physical assistance.
- Transfer – Getting in and out of a chair without requiring physical assistance.
- Continence – The ability to voluntarily control bowel and bladder functions such as to maintain personal hygiene.
If you have an old policy with old definitions of TPD, talk to your insurance advisor and see if there are any practical ways to improve your total permanent disability benefits.
What is critical illness early coverage
Because technology has improved significantly over the years, doctors are able to detect early stages of critical illnesses. That means, instead of having to wait for, say cancer, to spread throughout your body before you're able to detect and do something about it,
What critical illness early coverage will do is the insurance company will actually pay you a certain percentage right away if you are able to detect any of the critical illness early and take action to prevent it from getting worse.
Getting critical illness lump sum payment vs crisis cover income
A critical illness lump sum payment means that you would be paid the full amount stated by the policy the moment you have one of the critical illness. From there, it is up to you to properly manage the money to handle treatment and other life expenses. With crisis cover income, you would be paid a set amount each year for the rest of your life.
Family insurance in Malaysia
There are a few different family insurance packages in Malaysia. Most of them will give you insurance for the parents and for a set number of children. If you end up having a bigger family that they allow, you would have to pay an additional premium. However, by purchasing a family insurance package, you would typically get a small discount on the total premium.
One thing that you may have to be careful of is that your family will most likely be sharing the same limit. This means that if something were to happen to multiple people in the family that same year, you may run into issues with your limit.
The process of making a claim
Your insurance agent or financial planner plays more of a role than just helping you find the right insurance product. They can also help you with the claim process.
Because they work so closely with many of these providers, they know the insurance provider's processes quite well (not to mention that they probably have connections internally to speed up the process when needed)
Buying insurance for children
Although you do not know how your children will grow up, or what problems may arise in the future, there are a few things you can do to protect yourself and your children from the unknowns. First, you are able to buy medical insurance for your children typically when they pass their 1 month birthday.
The other things you can do is get some sort of insurance product that doubles as an education savings tool or buy different types of investments that can be used for your child's education in the future.
Medical insurance for foreigners in Malaysia
If you are a foreigner here in Malaysia for a short period of time (up to a few years), you should get a stand alone medical card as you would be able to stop paying your premium at any time, allowing you to stop the moment you leave.
If you are a foreigner but have the intention of staying in Malaysia through the Malaysia My Second Home (MM2H), you will need to get some sort of insurance coverage as part of your application process. And since you are looking to stay here for the long term, you should consider a longer term medical insurance plan such as an investment linked plan.
Buying insurance products from a part time person vs from a full time professional
Although the underlying product may be the same, a challenge that majority of part time insurance agents run into is that they are only representing one company and thus may not really know the difference between the products they sell compared to the other products available. This can lead to you having a safety net for life that may have holes.
Another issue is that many of these people tend to only do it for a set amount of time, and eventually they will stop. However, your life continues and when you do need to talk to them about your insurance needs, they may become unreachable. Or worse, if you did need to make a claim, you are on your own.
If however, you work with a full time professional, they will usually have some sort of succession plan to make sure that you will always be taken care of.
If you have already worked with someone in the past but cannot reach them anymore, feel free to contact us and we will connect you with one of the people we trust with our own insurance needs. They can help you identify your holes and find ways to patch them up.
Should you cancel your old policies and buy a new one?
In general, cancelling your old policies is a bad idea. In general, many policies have most of the fees paid in the front. What this means is that most of the money you pay in the first few years are going into expenses and not growing your policy.
Also, if you had bought your policy years (if not decades) in the past, you were probably a lot healthier than you are now. If you are going to buy a new policy now, the insurance companies will be a lot more diligent with you because they want to make sure that you do not have any illnesses that may end up costing the company a lot of money.
If you do decide to buy a new medical card, make sure you leave your other policy alone as the insurance company will take up to 6 months to determine if they want to insure you.
Why work with a professional agent instead of trying to figure it out yourself
No one likes to pay more for anything that's not worth it. However, most people do not know what to look for, what questions to ask, where to find the information and so when they end up buying their own insurance policy, and end up having to use it, they end up not being covered.
The other option is to take full advantage of the countless hours and conversations that the professional agent has had and have them work for you. That way, you won't have to spend the hundred of hours learning, researching and talking to the different companies and instead can focus on doing what you actually love doing.
Should you limit your agent options based off distance
With the way technology has expanded, working with an agent that's on the other side of the country is very simple. Most agents are willing to be called or are willing to communicate via WhatsApp. And being able to help you determine your needs or support you during a claim can all be done virtually (after all, they will still end up making a call to the insurance company regardless of where they are).
That said, don't limit yourself by who's around you and instead, try to find an agent that is knowledgeable, trustworthy and has a team around them to support you.
Why asking for an insurance quote puts you in a dangerous situation
Would you go up to a realtor and just tell them that you want the cheapest 2 bedroom condo that they have access to? Or tell a car salesperson that you want the cheapest car that seats 4 people?
Probably not. Afterall, with the condo, you would want to know about the neighbourhood, where the schools are, what shopping malls are around, the distance to work etc. And with the car, you would want to know about the safety of the car, the ability to drive long distances, the brand etc.
So why would you ask for the cheapest medical card? The last thing you want to do is get the cheapest medical card policy and find out that you're not insured for something in the future. Instead of simply asking for the cheapest policy, take a read about the top medical card criteria to learn about the main things you should pay attention to when making your decision.