I RECENTLY received a letter from my insurance company stating that my medical insurance premium would increase from RM540 per month to RM2,030 per month.
The reasons cited were the significant increase in the cost of medical treatments and my attaining the age of 65.
When I took out this policy in 2010, the insurance agent did not advise me that I should expect such an increase after I retired. It is ironic that when one stops receiving a salary, the premium would increase by 275%!
I was advised that if I did not agree to the increase, my premium would be buoyed for some months by the investment within the policy. After this, the policy would lapse and I would not have medical insurance anymore.
The customer service representative who attended to me was quite chirpy and blunt when she told me I should have taken out the policy at a much younger age. So, apparently the mistake was mine?
This week, I received an email from another insurance company, advising that the premium for my son will increase by 30% per month. The reason given was medical inflation.
I took out this policy for my son when he was 18 years old. Not young enough? It has only been two years and the insurance company is already making adjustments. What adjustments will be made in the next two years?
At the point when I am a retiree, I am facing a 30% increase for my son and a 275% increase for myself in premium rates.
These levels of increases are unfair. In fact, they are punitive. When we most need medical coverage and when we no longer have a regular stream of income, that is when the insurance company hits us. I wonder what Bank Negara Malaysia is doing to protect the public.
The excuse used by insurance companies is that they are facing significant increases in the value of claims. Yet, when I look at their profit and loss (P&L) accounts, they look very healthy. And I am not surprised. If customers have to face the increases that I have quoted, it is no wonder that the companies’ P&Ls look healthy – maybe too healthy.
I am disheartened that when the insurance agent was selling me the medical policy, no warning was given of premium changes in the very near future. In fact, the agent was applauding the wisdom of buying the policy when my son was young.
I recall asking about premium hikes, and the response was that insurance is a regulated industry and Bank Negara would not allow significant increases.
I now strongly believe that for every new policy sold, the insurance agent must disclose the potential for premium increases and how soon that could happen.
There must also be a sign-off by the customer that he/she has been informed of that clause and accepted it.
I took out my policy when I was younger, working, and when my medical coverage was provided by my employer.
During that period, I did not have to use my own policy, which was for my protection once I retired.
It is ironic that when one might most need medical insurance, the insurance company makes it unaffordable. In fact, it just might be their underlying business plan, drawn up by highly-paid actuaries, to make medical premiums more and more unfeasible as their customers grow older. It certainly makes lucrative sense for the industry.
Surely, Bank Negara as the regulator of insurance companies should be protecting the customers. The situation is already out of control and the government needs to get involved.
TONY PEREIRA
Petaling Jaya
https://www.thestar.com.my/opinion/letters/...surance-premiumAll this is true but I am not sure if there is any solution to it.
As a rule of thumb, there is around 12% to 15% medical inflation in Malaysia over the past 5 years.
When they priced investment-linked plans with medical riders at the point of purchase, they factor in some investment returns (2% or 5%) that in theory should cover medical inflation over time. But it does not, since the medical inflation we are actually experiencing is not at least 10%+ more than projection!
So the truth is, all medical plans (be it ILP riders or standalone) are "scams" if you look at it from a certain angle. You are lucky if you got 20% to 30% increase, mostly limited to well managed large companies like AIA and Great Eastern. Some of the smaller players are increasing by nearly 100%!!!
Also, I don't believe insurers are making bank from medical insurance. It's a very breakeven business. They make their money elsewhere, mainly from the life insurance policies that comes with savings plans, or the base ILPs (without the medical card rider).
Jul 26 2024, 10:19 AM
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maybe takda comission, thats why asking sifus here any recommendation, i see tokio marine got, just need submit form ourself lol
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