Your Medical Card is Costing More – Here's What You Can Do About It
Your Medical Card is Costing More - Here's What You Can Do About It
Posted 30 Dec 2024, by Sam Ng
It has taken a lot of us by surprise, judging from the recent uproar over medical insurance price hiking issue. Some blame the insurance companies for being unfair, some acknowledge the underlying issue is the rising cost of medical treatments, and encourage the skeptical ones to reconsider terminating their policy.
I’m here to offer some insight on what you can do if the premium hike becomes burdening. Because let’s face it, this is probably not the first time that you get a notice from your insurance company about the increased premium. And very likely it will not be the last time either.
A Short-Term Solution
Whenever insurance companies inform you of a revised premium, you will be given the choices to opt in (increase the premium as suggested), partially opt in (increase the premium but at a lesser amount than suggested) or opt out (retain current premium). (This is of course, assuming you are using an investment linked policy, and not a standalone medical policy. For standalone policy, your premium hike will be immediate.)
If your cashflow is very tight for the time being, you can choose to opt out. However, this should only be a short-term solution and I’d strongly suggest you to increase your premium contribution when things start to get better. Delaying premium hike for a long time will put your policy at risk of getting terminated due to insufficient fund to pay for the insurance charges.
Medical Card with Large Deductible Amount
You may also consider a medical policy with large deductible amount. Deductible is the amount that you need to pay out of pockets before the insurance company starts paying for the expenses covered. However most medical insurance products in Malaysia do not give you the flexibility to adjust the deductible amount as you wish. Also bear in mind that the waiting period for your medical card might apply again due to such modification to the policy.
Insurance Riders Could Be Costly
A long-term solution for many people is likely to restructure the medical insurance policy. Key items to look out for are the unnecessary riders in your policy. Insurance riders are added benefits in your policy but also added costs to you. Riders such as income benefits due to accidental injury or hospitalization, accidental disability benefits, daily guardian benefits, maternity cover benefits, no claims benefits (that’s right, the rewards you get for not making claims have also been priced in), and extra rewards for your efforts to stay healthy, will all add up to the final premium charged by insurance companies. You should really consider removing some of these benefits to reduce nonessential costs.
Death/TPD Benefits and Critical Illness Benefits Could Be Costly
Large sum of death or Total Permanent Disability (TPD) benefits is another big contributor to cost. Some medical policies are also attached with large sum of critical illness benefits. If insurance premium becomes a concern, these benefits will become secondary and should be removed or reduced in the sum assured. And don’t get me wrong, I do think death, TPD and critical illness benefits are valuable tools to provide the much needed emergency funds when the unexpected happens. However, I’d rather have your medical policy trimmed down to the bare medical card rider so you’re able to continue paying, than for it to become hardly affordable for you.
I hope this post gives you some ideas on what you can do to keep your medical card affordable. Thank you for reading!
