Medical And Health Insurance/Takaful
MHIT Made Simple – An initiative by FEN
What is medical and health insurance/takaful (MHIT)?
Cover medical expenses such as hospitalisation, medication, treatment, critical illness in the form of reimbursement, lump sum payment or hospitalisation allowance.
By paying premium*, your medical cost will be covered up to a certain limit, protecting you from high and unexpected medical expenses.
Premiums collected will be pooled together in a common pool to pay for policyholders’ medical expenses.
Your premium is not guaranteed and may be reviewed annually based on individual risk profile such as age, medical history, occupational risk and lifestyle factors and to reflect changes in the cost of medical treatment. Higher risk policyholders pay relatively higher premiums to reflect the likelihood and severity of potential claims. Hence, your premium will increase as you age.
* Also refers to contribution for takaful.
Risk pooling:
Your premiums will be pooled with other policyholders’ funds to pay claims. If the total claims paid out from the pool of fund is higher than expected, the premiums for all policyholders may increase, even if you did not make a claim.
Premium Setting
Low Risk:
RM200/month
Moderate Risk:
RM250/month
High Risk:
RM300/month
Risk pooling
Total RM10,000 in risk pool based on initial expectation for RM9,000 claims cost and RM1,000 for other expenses
Claims payment
Total claims payment from the pooled fund may exceed RM10,000
What should you do before buying MHIT products?
Introducing the ABC of buying MHIT policies/products:
What should I consider before buying MHIT?
Financial situation
- What is my budget?
- Will I be able to cope with the higher premiums over time?
- Do I have existing MHIT protection from my employer?
Personal circumstances
- Do I have dependents who rely on me?
- What are the expenses that I will not be able to pay on my own, hence needs to be covered by MHIT?
Medical history
- Do I have any pre-existing medical conditions?
- How about my family’s medical history?
What can I expect from my insurance/takaful agent?
Get enough information about my situation, needs, and priorities before giving advice or recommending products
Advise me to read and think about the information and explanations given carefully
Give me enough time to read and understand the information before making a purchase
What should I ask my insurance/takaful agent?
Is this the right MHIT product for me? Does it meet my needs?
- Types of MHIT products
- Key features such as coverage, claims process, limitations, etc.
How much insurance premium do I need to pay as I grow older?
- Age band premium increases
- Medical inflation
What else should I be aware of?
- Payment structure
- Waiting period
Get to know the 4 main types of MHIT products
Hospitalisation and surgical insurance/takaful
Covers your medical expenses for hospitalisation or surgeries and specified outpatient treatments for covered conditions
Critical illness insurance/takaful
Offers a specified lump sum benefit if you are diagnosed with any of the covered conditions. The covered conditions will differ for each product
Long-term care insurance/takaful
Covers extended care benefits such as nursing home cost as well as care for chronic illnesses and disabilities
Hospital income insurance/takaful
Pays a specified sum of money for each day that you are hospitalised for any covered illness, sickness or injury, up to a certain number of days
Heard of MHIT product with co-payment feature?
Why opt for a co-payment feature?
- MHIT products with co-payment features have relatively lower premiums than comparable products without co-payment.
- Potentially less frequent and lower premiums adjustment in the long-term as it encourages more responsible consumption and prescription of healthcare services.
- The ITO may waive your portion of the co-payment under specified circumstances. Keep informed of these conditions as they are beneficial to you.
When purchasing MHIT product with co-payment feature, it is important to consider whether you can afford to pay for co-payment amount and whether alternative coverage such as coverage provided by your employer. Your choice should be guided by your financial situation and your capacity to handle these expenses
Read and understand the product disclosure sheet (PDS)
When looking at MHIT products, it’s important to know exactly what you’re signing up for. The PDS is helpful because it gives you key information to help you choose the right MHIT products for your needs.
Remember, if you have any questions, don’t hesitate to ask your ITO or agent — they are there to help you understand the product better. Be sure to request for the PDS. The PDS is a step-by-step guide that contains key information you should consider to help you make an informed decision. Please take time to go through the PDS and choose a product that best suits your needs.
Practical steps and tips to assist your decision-making process
Shop around! Compare different MHIT products
Consider the key features offered including coverage limits, benefits payable, renewability, exclusion and waiting periods.
Know the costs and choose wisely
Other than premiums, you will also have to pay for a portion of your bills if you opted for product with co-payment feature. When comparing products, it is important to consider whether you can afford the premiums and co-payment over the long-term.
Check the network of medical providers
Review the list of hospitals partnered with your ITO and find out how to get a referral if needed – so you’re better prepared when seeking treatment.
Read the terms and conditions
Make sure to go over the terms and conditions carefully. Understand how long your policy lasts, what you need to do to renew it, and when it might be canceled or changed. Be sure to understand your coverage details and how ITOs evaluate claim eligibility, so you are fully informed about what to expect when filing a claim.
What information is included in the product disclosure sheet?
| Name | Product I | Product II | Product III |
|---|---|---|---|
| Annual Premium | RM2,400 | RM1,800 | RM2,000 |
| Payment type | Cashless facility | Cashless facility | Pay first, claim later |
| Coverage term | Until age 70 | Until age 70 | Until age 70 |
| Co-payment | No co-payment feature | RM500 deductible per policy/takaful year | 10% co-insurance/co-takaful per policy/takaful year |
| Hospital room and board limit | RM150 per day | RM200 per day | RM150 per day |
| Surgical expenses | As charged | ||
| Annual limit | RM100,000 | RM80,000 | RM100,000 |
| Lifetime limit | RM1,000,000 | RM800,000 | RM1,000,000 |
Note: This table only serves as a guide and does not capture all the features of the hospitalisation and surgical insurance/takaful products compared. Please ask your ITO or its agent for more information on the differences in features of products offered and refer to your policy/certificate contract.
