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Medical Insurance Guide for Malaysia My Second Home Program

Discussion forum for expats moving to or living in areas of Asia not listed above.

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Medical Insurance Guide for Malaysia My Second Home Program

Post Posted: Tue May 15, 2007 10:49 pm

Malaysia My Second Home (MM2H) is a program that allows people from all over the world who fulfill the requirements to stay in Malaysia. This program is supervised by the Ministry of Tourism Malaysia.

One of the criteria for applicants and their dependents including spouse and children to fulfill is they must purchase medical insurance policy from any insurance companies in Malaysia. The objective of this requirement is to make sure the hospitalization expenses and surgical fees of applicants and their dependents are well taken care of.

Medical insurance is also known as hospitalization & surgical insurance (H&S) or medical card insurance in Malaysia.The major items cover under H&S insurance in Malaysia are hospitalization expenses such as room & board charges for a bed or intensive care unit; surgical related fees due to diseases and accidents while you are in the hospital like hospital supplies & services, anaesthetist's fees, in hospital physician visits, etc; pre-hospitalization treatments; post-hospitalization treatments; outpatient cancer and kidney dialysis treatments and etc.

There are three major types of H&S insurance in Malaysia, namely:
I) Standalone H&S insurance
II) H&S insurance attached to investment-linked insurance
III) H&S insurance attached to whole life or term life insurance

I) Standalone H&S insurance


Like its name, this type of H&S insurance is an independent insurance and does not attach to other types of insurance. Almost all general insurance companies and a few life insurance companies in Malaysia offer this type of H&S insurance.

The advantages of standalone H&S insurance are:
a) No other insurance premium is involved
No other insurance premium like death or total & permanent disability premium will be incurred. Therefore, your insurance premium commitment is lesser.

b) Premium rates are transparent
Premium rate for H&S insurance can be easily found in the product booklets or brochures unlike H&S insurance attached to investment-linked or whole life insurance.

c) Long term service by insurance intermediary
The insurance intermediaries will continue to receive their commission once the policy holder renews his policy. Unlike standalone H&S insurance, no commission is given to an intermediary from year-7 onwards for H&S insurance attached to investment-linked, whole-life and term insurance. This will probably reduce the quality of service of the intermediary.

The disadvantage of standalone H&S insurance is:
Continue paying the premium:
You will have to continue paying the annual premium even when you are diagnosed to have one of the 36 critical illnesses covered or become totally & permanently disabled.


II) H&S insurance attached to investment-linked insurance


This type of H&S insurance is offered by only Malaysian life insurance companies. It is attached to a whole life investment-linked insurance policy as a supplementary benefit. The minimum annual premium for an investment-linked insurance is RM1,200 or RM1,800 depending on the practice of an insurance company.

The insurance premium for H&S insurance is included in the annual premium, but the investment value will be reduced. Many insurance buyers overlook this insurance premium. So please find out the insurance premium for the H&S insurance before putting your signature on the proposal form.

The advantages of H&S insurance attached to investment-linked insurance are:
a) Waiver of premium benefit
Some insurance companies will waive the future premium of H&S insurance if you are diagnosed to have one the 36 critical illnesses covered or become totally & permanently disabled.

b) Claim record
Unlike general insurance company, life insurance companies have been selling comprehensive H&S insurance for a long time, therefore their claim record can be traced. Hence, you are able to know which company provides good claim settlement.

The disadvantages of purchasing H&S insurance attached to investment-linked insurance are:
i) Policy lapse risk
For most of the insurance companies, if the main policy lapses, the H&S insurance will lapse too. Only a few companies allow the H&S insurance to be continued even the main policy is lapsed.

ii) Service quality of insurance intermediary in the long run
Unlike standalone H&S insurance, no commission will be given to an intermediary from year-7 onwards for H&S insurance attached to investment-linked, whole-life and term insurance. This will probably reduce the quality of service of the intermediaries.


III) H&S insurance attached to whole life or term life insurance


This type of H&S insurance is only offered by Malaysian life insurance companies. The H&S insurance benefits are attached to a term life insurance policy as a rider.

Term insurance is also known as temporary life insurance. A term insurance usually covers a minimal amount of sum assured like RM5, 000 or RM10, 000. It is payable when death occur. The annual insurance charges for RM5, 000 term assurance for a person at age 25 is about RM30 (1USD = RM3.50), whereas it is about RM90 for a person at age 50. Find out the annual insurance charges for the minimal amount of sum assured before making your decision.

The period of coverage, typically 10 years, 20 years or until age 60, 65 or 70.
The advantages of H&S insurance attached to investment-linked insurance are:
a) Life insurance coverage
If you need life insurance coverage, and at the same time looking for H&S insurance offered by life insurance companies, then you can go for H&S insurance which is attached to whole life or term life insurance.

The disadvantages of H&S insurance attached to investment-linked insurance are:
i) Policy lapse risk
When the period of coverage for life insurance expires, the H&S insurance expires too. For most of the insurance companies, if the main policy lapses, the H&S insurance will lapse too. Only a few companies allow the H&S insurance to continue even the main policy was lapsed.

ii) Service quality of insurance intermediary in the long run
Unlike standalone H&S insurance, no commission will be given to an intermediary from year-7 onwards for H&S insurance attached to investment-linked, whole-life and term insurance. This will probably reduce the quality of service of the intermediaries.

Conclusion
There are advantages and disadvantages for all the above H&S insurance . You have to discuss with your professional insurance agent in order to get yourself the most suitable product.

 

cheyong
Newbie
Newbie
 
 
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