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Wednesday, December 4, 2013

Is Medical Insurance important?

So, how many of you have a medical insurance? 

Probably it doesn't mean much to you when you are young but looking at the statistic above, I think there is every reasons for us to start planning while we are young. 

We are thankful that medical fees inflation is second to the college tuition and fees but it's still at a big figure....a forecast of 607% increase in comparison to 1978. Well, you probably argue that it's in so many years...but you may compare the increase in medical fees to the average income.

The increase of the medical cost is way more than the increase of household income. The data shown until year 2010. 

Well, for those of you who have no clue about medical insurance, here is a simple explanation of it.

Medical Insurance functions as a form of protection to cover unforeseen expenses arising from illness, injury or accidents – which can be very expensive, especially if hospitalisation and / or surgery is required. 

Getting the right 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/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

What to do when purchasing a policy?

1) Do your research and find out what policies are available out there.

2) Shortlist a few policies from different insurance companies and ask your agents to compare the differences in the policies. Don't worry about having to know a few different agents from different insurance companies. It is your right to find out what's best for you.

3) Once you have decided on a policy, decide on the sum insured and make sure the premium amount is a figure you are comfortable with.

4) Read and understand the terms and conditions of your policy before signing on the dotted line. To help policyholders better understand the policies, Bank Negara Malaysia has directed a move towards standardisation of terms used in policies to reduce confusion among policyholders.

Things to look out for

definitions and limitations to payment of benefits
how a disability is defined
how soon after a claim can one claim again
special provisions (succeeding policyholder after the first policyholder dies to avoid the hassle of declaring their health again)
does the policy have guaranteed renewability – to ensure protection is available throughout and premiums are maintained despite recent diagnosis of illness.

Purchasing a health insurance policy has become more of a need than a want in today’s society. Yet, a fraction of people are still skeptical about buying medical insurance after hearing stories of people who face difficulties claiming against a policy after a surgery or medical treatment.

That is why it helps to understand what your health insurance policy covers and how you can make the most of it. Choosing the right insurance company will also help ensure smooth claim process, when the need arises.

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