NH_Emag_May-Jun2022

LIVING WELL
Financial Protection
4 Important
Health
Insurance
to Consider
Unforeseen circumstances like illnesses
and accidents can happen to anyone.
Thus, knowing you have something
to fall back on can be reassuring.
Here’s where health insurance plays an
important role to keep you and your
family protected. In this article, Annie
Wong, Managing Director of Annieway
96 Sdn Bhd, a professional financial
planning consultancy, talks about the
four types of health policies and how
they can benefit us.
When we talk about personal health insurance,
there are four different types, each offering
various aspects of health-related coverage.
If your budget allows it, it is recommended
to sign up for all of them to give you full and
comprehensive coverage.
FOUR TYPES OF HEALTH
INSURANCE
1. Life Insurance, which will pay out a sum
of money to our loved ones if there’s
a permanent disability or in the event
of death.
2. Medical Insurance, which will cover all
medical expenses when we are hospitalised,
in day-care or undergoing operation
or surgery.
3. Critical Illness Insurance, which will pay out
in cash if we are diagnosed with certain
diseases, to ease the burden of our daily
living expenses.
4. Personal Accident Insurance, which will pay
out in cash if we were to lose certain body
parts due to an accident.
Each type of insurance plays a role in
protecting our income loss or easing the
burden of medical expenses. Consider this
situation: if a person were to be diagnosed with
cancer and require treatment, they might struggle due to the high medical
costs. Moreover, most Malaysians depend only on a single-sourced
income, and a majority do not have enough savings. When an illness or an
accident happens, it would be a tragedy not only for the victims but also
for their family members. Health insurance can help mitigate some of these
hardships by providing financial assistance in times of need.
HOW MUCH DOES HEALTH INSURANCE COST?
For Life Insurance, Critical Illness, and Medical Insurance, the cost depends
on the plan and the insured’s entry age. Here is a simple comparison table
to visualise the cost differences between a 25-year-old young man and a
55-year-old senior citizen when purchasing a plan.
Plan 25-year-old 55-year-old
RM 500,000 Term Life Insurance
(price changes yearly according to age)
RM 500,000 Investment-Linked Life
Insurance (price levels until maturity)
Standalone Medical Card
(price changes yearly according to age)
Investment-Linked Medical Card
(price levels until maturity)
• Price estimation is just for illustration purposes. Policies from different
companies may vary in pricing.
• Price estimation is based on yearly premiums.
Estimated RM
720
Estimated RM
3,000
Estimated RM
920
Estimated RM
2,000
Estimated RM
7,500
Estimated RM
9,000
Estimated RM
3,200
Estimated RM
5,500
Overall, the cost of Critical Illness Insurance is constantly the highest,
followed by Medical Insurance and Life Insurance. The advice here is to
purchase insurance as early as possible. This is because when you are
young and healthy, you pose a lower risk of facing major medical issues
and, therefore, have the opportunity to pay insurance at a lower premium.
Personal accident insurance is determined by the entry age, but the risk level
is based on your occupation instead. For example, buying a RM 500,000
personal accident policy would require a 25-year-old logistic driver to pay
RM 1,800 while an executive-level 55-year-old man just needs to pay RM 800
as his personal accident policy would be smaller based on his needs.
Many people think that a single medical card is sufficient. Unfortunately,
that is not true. The four types of insurance highlighted above are all
equally important. Nevertheless, it’s a good idea to talk to a professional
financial advisor if you are unsure about what sort of insurance would suit
your needs best.
36 Natural Health * May 2022 VOL 127