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~ Health : The Right Protection

Posted by faisalrenzo on June 1, 2011


Why do we need to get medical insurance? JENNIFER JACOBS finds out

WITH the rising cost of healthcare and the growing inaccessibility of public services, more and more people are buying their own medical cover in case of accidents, emergency or sudden illnesses. However, Malaysians remain largely uneducated about the matter.

Firstly, it is important to know what you want, says Prudential Assurance Malaysia Bhd chief product and marketing officer Heng Zee Wang. A cheaper plan may mean less cover. Or it may have hidden loopholes that will actually terminate the policy should the policyholder make a lot of claims. Look out for a “renewal clause” which states that the insurance company can terminate a particular policy at its own discretion.

Another thing to look out for is the “step premiums”. “For some policies, the premium will jump every five years. So before you sign the policy, make sure you know how much you will be paying each year and how long you will have to continue to make the payments for,” he says. Heng says there are three types of medical plans. The most basic is the Hospital Reimbursement Plan or medical card which covers expenses in case of hospitalisation. This includes room and board, laboratory fees, doctor’s fees, medication and surgical costs. Your medical card will not cover non-medical related expenses such as the Astro service link-up to your room, your daily newspaper and bed for your companion or your admission kit.

“People look at their bills and say ‘why do I have to pay this? Isn’t it covered by my medical insurance?’. It isn’t. None of these expenses relate to your treatment, so if you want them, you will have to foot the bill yourself,” he says.

If you have a medical card, your insurance company probably has a list of panel hospitals you can go to for treatment with the least amount of hassle. The policyholder simply needs to present the medical card during registration.

“Some people get stuck at this point as they don’t realise their policy has lapsed because they haven’t paid their premiums in a while. Most companies give you a grace period to do this before the policy lapses. You need to ensure you continue to pay your premiums so that your policy is in force when you need it.” It is possible to go to a non-panel hospital, but in these cases, the customer would have to pay first and then ensure they have all the necessary documents to make a claim.

“You need to get together all your original receipts and doctor’s reports. If there’s a mistake, it delays the claim.

“But if you go to a panel hospital, we deal with the hospital directly to get all the information and basically you don’t have to do anything.” Once you have the basic cover, you may add on a critical illness plan. This covers 36 major life-threatening illnesses such as heart disease, stroke and late-stage cancer (early stage cancer is no longer considered life-threatening). “So if you have a heart attack, a stroke or are diagnosed with any of the critical illnesses listed, you get a lump sum of money. The amount depends on what plan you have signed up for.” There are a few things to remember when purchasing a critical illness plan. Most importantly, if you have had any of the listed critical illnesses or if you have a family of a particular illness, it is better to disclose it upfront. “When you make a large claim we will usually ask for a doctor’s report. And if we find that a diagnosis was made in, say 2002, of the same illness, we have a right not to pay your claim.” He says disclosing a particular illness does not necessarily mean you will not be able to buy the critical illness plan. “The company may still find you insurable but you will have to pay a higher premium or alternatively, it may choose not to cover that particular risk. For instance, if you have been diagnosed with cancer before, but are in remission, we may not necessarily cover you for cancer. But we would cover you for say, a stroke or heart attack.” On top of the medical card and critical illness plan, the policyholder may want to get a disability income plan. This will provide them with a monthly income for up to two years if they are unable to work because of disability. Here too, it is important to read the fine print and find out how the insurance company defines “disability”. Some companies have been known to only allow claims on this particular policy when the policyholder has become totally immobilised.

Heng advises policyholders to sign up for the “payor benefit”. “This means if the policyholder is diagnosed with a critical illness and is unable to work, the insurance company will pay the premium for you going forward so your policy remains in force.” Many people seem to think that if their companies have a medical plan, they do not need to take out a personal one. “Your employer’s plan only covers you while you’re at work. And the cover will likely be limited according to your position. You never know when you may change jobs, get laid off or even move on to do your own business.

“And most importantly, if you depend on your company plan, it won’t be there after you retire and most need it. At that age it will be very difficult to start to buy your own policy because you will present a much higher risk. So it doesn’t matter if your company covers you. You need to cover yourself. The earlier, the better.”

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