A beginner’s guide to medical insurance

November 18, 2013

There are several types of insurance available on the market, but what do they all cover?

 

By Eugene Chua
There are several types of insurance available on
 the market, but what do they all cover? SaveMoney.my explains medical insurance, which should be noted is separate from life insurance or personal insurance.

What is medical insurance?
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

Where can I get medical insurance?
Medical Insurance products can be found at insurance companies and banks. Pos Malaysia also provides Hospital Cash Income Plan too.

How much does it cost?
Insurance companies and banks provide a few plans for you to choose from, based on your budget and needs. Of course, the longer the list of medical coverage provided, the higher the premium (insurance fee) will be. Aside from this, the premium will also vary based on other factors such as your age, occupation, health record, gender, and whether you are a smoker or non-smoker, subject to underwriting. As expected, those with a higher risk potential will be charged with higher premiums. From our research, the premium for a medical card is basically charged based on the age of your next birthday and it will be increased with age upon renewal.

Medical card / Health card
Government 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. A medical card can also help you prepare for costly expenses and ensures comprehensive coverage in medical, surgical and hospital costs, ambulance fees, and other related medical charges.Things to be aware of:
Panel hospital A 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, as you will have more choices in the time of emergency.
 
Co-insurance
Some 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. guide on medical insurance in our next piece!
Eugene Chua is the Finance Editor at SaveMoney.my, an online consumer advice portal which aims to help Malaysians save money through smart (and most of the time painless) savings in their daily banking, technology, and lifestyle spending habits.