On November 2015, Bank Negara Malaysia issued the Life Insurance and Family Takaful Framework. This framework aims to promote innovation and a more competitive market for the insurance and takaful industry.
In this framework, Bank Negara wants insurance and takaful products to be accessible to the consumers through a wider range of delivery channels and at the same time lowering the cost of distribution amongst others. Hence, in the framework, all life insurers/family takaful operators are required to offer commission-free standalone pure protection products.
Term-life insurance was first introduced to the market in 2017, followed by critical-illness insurance and medical & health insurance in 2018. However, in this direct insurance series, I would like to start this series with the comparison of direct Medical Cards as I truly believe that besides a personal accident plan, medical card is the first insurance one should to get.
Direct Medical Cards
Not all the 14 Life Insurers in Malaysia provides direct medical cards. The companies that provide direct medical card are as follows:
- AIA – AIA Med Basic
- AXA Affin Life (AXA) – eMedic
- Etiqa Life (Etiqa) – E-medical pass
- Gibraltar BSN Life (Gibraltar) – i-Med
- Great Eastern Life (GE) – Great Health Direct
- Manulife – ManuEZ-Med
- Prudential (Pru) – PRUdirect med
The other companies provides hospital cash income plan, which I will not be including in this comparison as they a fundamentally different product altogether.
Having compared all direct medical cards from 7 insurers, the following are some points to help you determine which medical card is suitable for you.
Room and Board limit
Outpatient Kidney Dialysis and Cancer treatment
Pre- and Post- hospitalisation treatment
Annual and Lifetime limit
Is the Renewal of Policy Guaranteed?
(Note: These information are obtained directly from the insurer’s website. Best effort has been made to ensure the accuracy of these information. However, these information may change without notice. The purpose of this article is to provide a bird’s eye view on the direct insurance landscape, should you choose to purchase any of these plans, please read all the T&Cs and Product Disclosure Sheet from the respective insurers.)
1. Room and Board limit
With the high medical inflation rate in Malaysia, a medical card should at least cover RM 200 per day for room and board. This is especially true if you’re living within the Klang Valley.
Yes, you can still choose to stay in a quad-share room which has a lower rate, but from my experience, these rooms are usually limited and often full. The hospital will ask you to upgrade to a twin-sharing room or above. In these times of emergency, you or your family members will probably choose to upgrade the room instead of waiting for a quad-share room.
Fortunately, amongst the 7 insurer, 5 of them covers room and board of at least RM 200 per day.
AXA – RM 250 per day
Etiqa – RM 200 or RM 300 per day
Gilbraltar – RM 250 per day
GE – RM 200 per day
Manulife – RM 250 per day
2. Outpatient Kidney Dialysis and Cancer Treatment
Some of you may have experience a close friend or family member going through kidney dialysis treatment or outpatient cancer treatment. These treatments are very costly and it may put you in bad financial position. Therefore, it is very important to have these two outpatient treatments covered.
4 of the 7 insurers covers both outpatient kidney dialysis and cancer treatment:
3. Pre- and Post- hospitalisation treatment
Just like the above, sometimes, pre-hospitalisation consultation/test and post-hospitalisation treatment may cost a lot too. Hence it is important to have a medical card that covers this.
5 of the 7 insurers covers both pre- and post- hospitalisation treatment:
AXA – Pre: 31 days; Post: 60 days
Etiqa – Pre: 60 days; Post: 90 days
GE – Pre: 60 days; Post: 90 days
Manulife – Pre: 60 days; Post: 90 days
Pru – Pre: 30 days; Post: 90 days
4. Annual and Lifetime limit
This is one of the biggest disadvantage of getting a direct medical card. Non of these medical cards provides an annual limit of RM 1 million and above, which is the norm nowadays.
5. Deductible option
As direct medical card are meant to be affordable, some insurers provide their client with the option to include a deductible.
A deductible is an amount paid out of pocket by the client before the insurer will pay any expenses. By including a deductible, the client will enjoy a lower premium, but when it comes to claims, the client will have to pay a fixed amount first.
You should choose a deductible that you are comfortable with. Having a RM 1,000 deductible will result in a lower premium than a deductible of RM 300, but if RM 1,000 will cause a strain on your cash flow, it is not suitable for you.
The below are the list of insurer that provides a deductible options(s):
AIA – RM 300 (compulsory)
AXA – RM 1,000
Etiqa – RM 1,000; RM 3,000; RM 5,000
GE – RM 1,000 (compulsory)
Pru – RM 300 (compulsory)
As mentioned, the premium of direct medical cards are free from distribution cost and commission, therefore it is lower than the premium of medical cards that you can get from intermediaries.
In general, if you are below the age of 35, male or female, the premium of these direct medical card are below RM 1,000 per year.
Do note that these direct medical cards are renewable on a yearly basis, the premium is not guaranteed and will subject to increase.
(Side note: the cost of medical card in an ILP is also subject to change on a yearly basis, however the premium stays the same because investment units are sold to cover the shortfall.)
To have an overview of the premium, do scroll lower for the consolidated comparison table.
7. Is the Renewal of Policy Guaranteed?
Another disadvantage of getting a direct medical card is that most insurer do not guarantee your medical card will be renewed.
Meaning, if you make a substantial claim last year, the insurer may deem that you are unfit and they have the right to reject your renewal. In this case, you have lost the ability to own a medical card as other insurers will likely reject your submission altogether.
This may sound unfair to the client, but if we think a little deeper, insurers choose to reserve their right to reject any renewal because the underwriting process of a direct medical card is much less stringent.
However, there are 2 insurers that explicitly stated that they will guarantee your renewal, they are AXA and Manulife.
8. Final Verdict
With most plans priced below RM 1,000 per year (if you’re a non smoker, below the age of 35 and have a reasonably safe job), these are some of the lowest premium medical card you can find in the market right now. Without the need of agents or intermediaries, you’ll save some money on your annual premium.
Although you can’t get a comprehensive medical card it this price point, but you want to make sure the plan that you will be getting will tick most of the box for a basic medical card. To sum up, you want benefits that include at least RM 200 per day room & board; RM 100,000 annual limit and no lifetime limit; cover most inpatient treatment cost, and more importantly, the annual premium is within your means.
You also want to make sure that the medical card guarantees your renewal as you do not want to see your protection to be revoked when you need it the most!
That being said, if you’re a uni student, parents buying for the children or cash flow is really tight (or you really do not want to deal with a human intermediary), having direct medical card is your way to be protected.
I do not recommend anyone to hold on to this medical card for life.
This is only meant to be a basic medical card to cover the immediate need for hospitalisation cost in the near future. As the annual limit of these plans are relatively low, the cost of medical bill may exceed your annual limit very soon.
In some extreme cases, a medical card with an annual limit of RM 100,000 can’t cover the full bill from the hospital even in today’s terms.
If you can afford about RM 100 per month, it is possible get a more comprehensive standalone medical card with an annual limit of RM 1 million or more. This can better future-proof your protection.
Insurance planning is not about blindly getting what is the cheapest and have a false sense of security. Insurance planning is actually using the limited resources to stretch and prioritise which protection should come first.
If you want to know if these direct medical card suits you, hit me up.
I have helped many clients of mine to restructure and re-prioritise their insurance portfolio to stretch their Ringgit to get the highest possible coverage.
To see if we are a good planner/client fit, you may book my time here for a free discovery call. The purpose of this call is for you to understand my planning approach and also for me to see if I can actually provide value to you.
Let me know what you guys think about the direct Medical Card. In the following few days, I will be comparing direct Term Life, as well as direct Critical Care insurance. Stay tuned!