Medical Insurance - Friend Or Foe

Medical Insurance functions as a form of protection to cover unforeseen expenses arising from illness, injury or accidents. Medical Insurance also ensures that you won’t have to fret about the cost of seeking treatment during an emergency. In addition, it also provides you with a stream of income while you undergo treatment.

There are 4 major types of medical policies:Medical Card are normally sold as a rider (supplementary benefits) to the main policy. The policy are yearly renewal (usually up to age 80) and premium rate is not guaranteed.
* Medical Card/Health Card – covers hospitalization 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

Medical card / Health cardGovernment hospitals offer emergency and essential medical care but there is usually a long waiting list. Possession of a medical card will be able to give you more choices to both government and private hospitals. The normal maximum expiry age for medical card is 80 - an age where you need insurance most - but will no longer entitle to the protection in a Catch 22 position.
Where can I get medical insurance?Medical Insurance products are mainly offered by insurance companies. You can purchase medical insurance from various distribution channels - agents, brokers, online, banks, Post Office etc

How Much does it cost? Insurance companies and banks provide a few plans for you to choose from, based on your budget and needs. The longer the list of medical benefits provided, the higher the premium (insurance fee) will be. Premiums will vary based on various factors like age, occupation, health record, gender, and whether you are a smoker or non-smoker. Those with a higher risk potential will be charged with higher premiums and/or limitations.

High Premiums
Medical Card premiums are not guaranteed. Premiums increases with age. A man age 70 pays as much as 10 x the premium rate of a man age 30 for the same plan/scheme (for example - age 30 pays RM1,000 compared with age 70 paying RM10,000 premium per year). Yearly renewal insurance plan (like Medical Card) is specially design to eliminate older age group from the insurer's portfolio (since the older age group possess higher risk and lower profit to insurer) by increasing the premium to the extend that the policyholder cannot afford to renew the policy.


Panel hospitalA panel hospital is the hospital collaborating with the insurance company. All the expenses incurred by the insured are directly payable to the hospital from the insurance company; you do not need to worry about preparing and submitting claims. Depending on the insurance company, the number of participating hospitals varies. Choosing a medical card with more participating hospitals benefits you better.

Higher Expenses Using Medical InsuranceHospital normally vary their charges based on the Room & Board you requested plus insured versus non-insured. For the same treatments, medicines, doctors and specialists etc - the general rule is to charge more on those insured as compared to non-insured patient (since insurer is paying the cost). In addition, the rate will increase if you are staying in single bedded room versus double (four or 6 bedded room).

Co-insuranceSome medical cards practice co-insurance, meaning that you’ll have to pay a certain amount of the medical fees, normally at 10% – 20% of the total medical fees incurred, while the balance will be paid by the insurance company. Another similar option is Deductible per disability, which is also the amount you have to bear before the insurance providers pay the claim for you. The difference is that deductible per disability is a stated amount (not a percentage), and only the amount exceeding this deductible amount will be payable by insurance providers.