Choosing the Right Medical Insurance

Medical insurance is extremely important as many private hospitals may not even allow hospital admission without a valid medical insurance. While Malaysian Government Hospital does provide highly subsidized healthcare, there are cases where you may not be able to get to the Government Hospitals in time.

Without a valid medical card, you may not be allowed admission unless you put up a credit card as a guarantee to the private hospital. Therefore, medical insurance is essential and the government encourages it by giving an income tax relief of up to RM 3,000 for medical insurance premium.

There are so many insurance companies offering medical insurance, so which is the best one? While there is no such thing as a best medical insurance but you can select one that best suits your needs, lifestyle and budget. This guide will help you compare and select medical insurance by pinpointing the important aspects to focus on.

Hospital Benefits

The most important is of course the total benefits allowed under the plan. Most policies have annual limits which is the total amount claimable within a year for hospitalisation. It is important to select one with limit of at least RM 150,000 or more as most serious illnesses can cost up to that amount or even higher if prolonged. Anything less than RM 150,000 is generally insufficient.

Some policies may also have a lifetime limit, which is the amount claimable for the policy within your lifetime. Of course it is better if there is no lifetime limit, but the costs may be higher for such policies. While you may think that you can always switch to another insurance company if you hit the lifetime limit for the current policy, but you probably hit the lifetime limit due to a serious illness which will likely be excluded if you switch to a new policy. So it may be better to get a policy with no lifetime limit so you are covered until the age limit of the policy even if you get inflicted with a serious illness later on.

Outpatient Treatment

Outpatient treatment is generally not covered unless it is due to accident, physiotherapy from discharge or possibly diagnostics before hospital confinement. The range of outpatient treatment covered and benefits vary from policy to policy.

Other standard outpatient treatments which are generally covered include kidney dialysis and cancer treatment.

Like the hospital benefits, the benefit limits can be annual or lifetime in nature. It is very important to read the fine print as a lifetime limit for kidney dialysis may not be ideal as kidney dialysis can carry on for many years while waiting for a suitable kidney transplant. Therefore, annual limit is better for dialysis treatment.

Panel of Hospitals Accepted

Not every medical card has access to the same panel of hospitals. It is important to ensure that the hospitals closest to your house are available to you in the event of emergency and that your hospital of choice is also listed within the panel of hospitals accepted.

Coverage of Existing Conditions

Depending on the policy, they may or may not cover existing conditions. It is important to check the policy exclusions if you do have any existing medical conditions which may cost you down the road. Of course the best scenario is that you sign up for your medical insurance when you are still healthy.

Deductible vs No Deductible

Certain plans may have a deductible policy, which tends to be cheaper than policies with no deductible policy. For example, an insurance policy with a RM 5,000 annual deductible means that the medical costs up to RM 5,000 in a single year will be fully borne by the policyholder, only expenses above RM 5,000 may be picked up by the insurance company.

If you do not have sufficient budget, a deductible policy may be useful to reduce premiums for the policy while still protecting you from catastrophic losses. This is assuming that you can foot the bill of the annual deductible with no problems.

Co-Insurance vs No Co-Insurance

Insurance policies may also contain a Co-Insurance feature, which also tends to be cheaper than policies with no Co-Insurance policies. If you are hospitalized at a Room & Board category which is better or cost more than your entitled benefit, you may also be required to co-pay for the excess amount.

Benefit Capped or Full Reimbursement

It is important to also look through each category to see if the benefits are capped or there is full reimbursement. If you see as charged, it is the same meaning as full reimbursement. Make sure that operating procedures are based on full reimbursement or as charged as operating procedures are usually very expensive.

There are usually benefit caps per day for room & board, so you can compare the benefits allocated per day to each plan. Ideally, you should also check how much it costs for the room at your ideal hospital to make sure that the benefit cap is not too far from the actual cost.

Entry Age and Renewal Policy up to Age Limit

It is important to note that most policies have an age limit at which they cover the insurance. For example, Zurich offers up to age 75, AXA up to age 80 and AIA up to the age of 100. In general, the older they can cover the better, but premiums rise very quickly at older ages.

Do take note that entry ages are much lower than the age limit. For example, the last age you can qualify for AXA medical insurance is age 59, ages above 59 is based on renewal basis only.

Different policies also differ in their policy on renewals. It is best to select policies which have guaranteed renewal without selective loading. What that means is that some policies may increase premium based on claims made earlier, which is known as selective loading.

Benefits outside Malaysia

Most policies do not pay out benefits outside Malaysia if you are overseas for more than 90 consecutive days. Some policies include Malaysia, Singapore and Brunei within the geographical plan of coverage. For those who travel overseas frequently, ensure the policy has international medical evacuation and repatriation. Also ensure that the policy does cover costs up to the equivalent of Malaysian treatment if you choose to be treated overseas.

If your current medical policy does not have adequate coverage for international hospitals, you may require an international health insurance to bridge the gap. However, such policies tend to be very expensive and it is best to convince your company to pay for the international medical policy if you are traveling for work.

Occupation Class

Some policies actually define occupation classes based on the type of jobs held, for example, office work versus manual work involving heavy machinery. There may be loading on certain occupation classes and certain classes may not be covered altogether. If you do fall under such job category, do make sure that the medical insurance which you select does not have additional loading.

Insurance Company

It is best to get your medical insurance from an established insurance company with strong financial footing. That is because once you sign up your medical insurance, ideally you want to renew it until the age limit. If you switch halfway, you may encounter issues with pre-existing conditions and also entry age. Check with your friends and relatives to see if they have any positive or negative experience dealing with the medical claims from the insurance company as policies differ from company to company.

Since most insurance companies only offer 1 or a few medical insurance policies, you have to compare across the different insurance companies instead of relying on just one insurance agent. However, that can be quite time consuming. Alternatively, you can seek advice from an independent financial advisor or insurance broker who will be able to give more objective advice.