Why and What to be Aware of When Considering Medical Insurance?

“The number one cause of bankruptcy in the US is healthcare costs.”
– Harvard University study

Why it is in your family’s best interest to consider medical insurance?

Working life is stressful enough – most people work not because they enjoy the work but to sustain their lifestyle.

For parents, their drive is to save for their children’s education.

Thinking ahead to get yourself covered in case of any unforeseen medical emergencies ensures that you and your loved ones have one less thing to worry about. This is not just smart but essential.

Your company would have a health plan but it might be inadequate when you suffer a prolonged illness. Most companies’ medical or hospitalisation-related leave is up to 6 months which means that if your illness is serious and prolonged you might lose your job after six months, and along with that your group insurance cover!

​​I would encourage you to think about getting private health insurance for yourself and also your family. There are a number of different medical insurance providers – life insurers, takaful providers and general insurers – as well as different medical products.

However most policies would cover similar basic benefits related to the cost of providing hospital room and board, surgical fees etc. Some offer extras for example cancer cover, nursing care at home, even traditional medicine! 


What to be aware of when considering medical insurance? 

Look out for a guaranteed renewal clause and check if your premiums will increase the year after you claim. Without guaranteed renewability your application to renew the medical policy following a major claim may be declined by the insurer or your premium may be significantly increased.

​Secondly be aware that premium rates are very rarely guaranteed for medical insurance. They normally increase with age and that’s normally communicated to you in the sales illustration. You should be aware that companies also adjust premiums to reflect their claim experience on a periodic basis. This would normally mean upward adjustment to allow, for example, for the effect of claim inflation. If the product has been priced inadequately or perhaps even too competitively, this may mean an upward revision is likely in future. You may want to ask about the company’s historical premium revisions. 

​​Life insurers and takaful operators also have versions of medical products where you pay more now to build up a fund to pay for later (when medical premium are usually more expensive). This may sometimes be bundled with a savings (via unit fund) and a term cover component. 

​​Most insurers offer a cashless card – this means you can obtain pre-approval upon hospital admission. Make sure that you know which hospitals are included in the cashless transaction as not all hospital may be on your insurers’ approved panel list for this facility. Panel hospital can also be removed from the list hence keeping yourself up-to-date with this information helps.

Check geographical coverage. If you travel a lot or spend a lot of time in another country, check that the plan covers medical costs incurred in a foreign country. Often where the plan covers medical costs incurred in foreign country it is likely that you have to pay cash first to the hospital and claim later. In addition, there is usually a limitation on cover if you spend a longer time than is specified in your policy conditions in that country for example, if you are a parent spending a few weeks holiday in Europe/US visiting your child who is studying there, you should be covered, but if you intend to spend months overseas babysitting your grandchild, you may not be covered beyond a specified period (for example one month). 

The next article will look into when is a good time to buy insurance. ​

Stay tuned for next article…

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