Health Insurance Made Easy!

Here’s what you need to know.

Health is wealth. Most of us would have come across this famous old saying in one way or another, whether it be in the form of advertisements, wellness articles or an advice from a loved one. As cliché as it sounds, it is true. Maintaining good health enables us to live happy, productive lives. However, the opposite rings true as well. Health-related setbacks such as critical illnesses, hospitalisation and long-term medical treatments can throw a curve ball into our lives; often burning a hole through our finances if we are not prepared for it.

Health insurance is designed to safeguard us against the unexpected, and yet, it is also commonly misunderstood. Here is a brief guide for you to better understand what is available in the market and what type of plans would suit your needs.

Hospitalisation and surgical insurance

Generally known to many as ‘medical card’, this type of insurance covers medical and surgical related expenses such as the cost of hospitalisation, surgery and physician consultation. Premium rates are calculated based on your age, gender, occupation, current health condition and the selected plan. Typically, insurance companies offer plans with various annual and lifetime limits to cater to different needs and budget.

What you need to know:

While some hospitalisation and surgical plans are ‘cashless plans’, which means the eligible medical expenses are fully covered by the insurance company; some plans come with co-insurance and deductible options.

• Co-insurance – you pay a percentage of the eligible medical expenses, as spelled out in the terms and conditions under the policy. However, some plans have set a limit on the co-insurance payable; for example, 10% co-insurance on the total eligible expenses, up to a maximum of RM 500.
• Deductible – you pay a stipulated amount of the eligible medical expenses, the excess of which will be covered by the insurance company. For example, if your plan has a deductible of RM 2,000, it means you would have to pay the first RM 2,000 of the eligible medical expenses while the company covers the rest. If the eligible medical expenses are less than RM 2,000, the company does not bear any cost.

Plans with co-insurance and deductible options cost less as compared to ‘cashless plans’. It can serve as a supplement to the medical coverage that is provided by your employer.

Hospital income insurance

This type of insurance pays you a specified sum of cash on a daily, weekly or monthly basis when you are hospitalised due to a covered illness or injury.

What you need to know:

Hospital income insurance come with limits on the number of days/weeks claimable per year and throughout the coverage term. It is also important to note that these plans do not cover medical expenses incurred due to hospitalisation.

Hospital income insurance is affordable and especially useful for those of you who are self-employed and do not have a fixed monthly income. The cash can be used however you wish; for example, on household expenses such as groceries and utility bills, or financial commitments such as loans and insurance premiums. In simple terms, think of it as a form of income replacement while you are out of work due to hospitalisation.

Critical illness insurance

This type of insurance makes a lump sum cash payment to you upon diagnosis of a covered critical illness, total and permanent disability or death. Critical illness is a life-threatening health condition that affects your lifestyle as well as your ability to work.

What you need to know:

• Coverage – The risk of death or contracting critical illness is determined by factors such as age, gender, lifestyle habits, medical history, occupation and more. If you are deemed a higher risk as compared to the average healthy population, you would either have to pay additional premium (also known as premium loading) or agree for certain health conditions to be excluded in your policy.
• Definitions of Critical Illnesses – Critical illnesses are strictly defined in insurance policies to ensure fair treatment and payout to all policy owners. This means that the diagnosis of critical illness must meet the terms and conditions stipulated under the policy before a claim is approved. A number of insurance companies now offer critical illness plans that cover early stages of critical illnesses. Typically, these plans pay out a percentage of the insured amount for the early stages and the balance for the intermediate and advanced stages.

There are various types of critical illness plans in the market ranging from plans that offer comprehensive protection for 36 most common critical illnesses to basic plans that cover selected critical illnesses only (e.g. heart attack, stroke, cancer).

Critical illness insurance is designed to ease your financial burden by providing a lump sum cash payout. The cash can be used to meet any immediate or future needs; for example, paying off a house loan, seeking alternative healthcare and medicine, or setting up an education fund for your children.

The verdict

Different types of health insurance serve different purposes. What you choose for yourself and your loved ones ultimately depends on your needs and way of life. It is worthwhile to take the time to weigh your options before committing to a plan. Compare the different types of plans offered by insurance companies and determine the one that would best suit your needs and budget.

For more information about health insurance, click here.

The above article is brought to you by Zurich Malaysia. It is intended for educational and informational purposes only; the content of which does not form any statements of contract. For more information about Zurich Malaysia’s products and services, please contact the Company’s Call Centre or visit the Company’s website at www.zurich.com.my. Zurich Malaysia accepts no responsibility for any loss which may arise, directly or indirectly, as a result of reliance on information contained in the article.