For the second time in 3 years, I’ve received a letter on the increase in cost of insurance for my ILP’s medical plan. The quantum of increase is rather steep at 35%! This has resulted in increases to my monthly premium.

From what I gather, this will likely continue happening every 3 years or so. The future quantum of increase might well be higher than 35% as the good risks depart the medical plan and the bad risks (with substandard health resulting in high claims) remain.

What’s the best way to deal with this issue? It seems like the sustainability projections at the start of the policy are a joke and wholly useless as in just a few short years, there have been multiple repricing exercises and the premiums have been increasing.



1. Launch insurance charges for SmartMedic Xtra in 2014:


2. After 1st repricing in June 2020:


3. After 2nd repricing in July 2023:


This post has been edited by contestchris: Jan 15 2024, 06:42 PM

How many years? I got this in 2016, then repricing in 2021, another in 2024.

This succinctly captures the vicious cycle! It's a death spiral I'm sure!

Cost of insurance deducted will increase every year simply due to age. That's different from medical repricing where there's a one off bump across the board for everyone.

If you look at the insurance charge rates for life, CI, medical card for ILPs....they are all SIGNIFICANTLY lower than the equivalent standalone traditional plans.

The catch is:

1. Frontloaded commissions and expenses in the form of lowered allocation rate (used to be first 6 years, now its the first 9 years but at a lower quantum). If you cancel early on, the company and agents make bank.
2. Your bear the investment risk
3. You pay around 1% to 1.5% of your gross investment returns as management fees to the company
4. In the event the policy is not sustainable, your top up premiums will only get 95% allocation
5. In the event you upgrade your riders, the differential increase in premiums will be resubjected to the Y1 allocation rates
6. RM6 policy fees to insurance company every month

Others can chip in.

For proof, you can compare the insurance charges for SmartMedic Shield (ILP) with GreatMedic Shield (standalone).

This post has been edited by contestchris: Jan 13 2024, 04:17 PM

Long run probably ILP is less, short run obviously standalone is less

Guys, I'm including the insurance charge tables for SmartMedic Extra so you can see for yourself the quantum of increases.

1. Launch in 2014


2. 1st repricing in June 2020


3. 2nd repricing in July 2023



This post has been edited by contestchris: Jan 15 2024, 06:42 PM

Please share more details. What's your medical card? How much is the quantum of increase?

First question, what is your medical card? You can check in the attachment on that page.


This post has been edited by contestchris: Jan 19 2024, 11:27 AM

From what I know, the quantum of increase for SmartMedic is 50% this time. In comparison, the quantum of increase for SmartMedic Xtra (which was launched after SmartMedic) is around 30%.

As to why the discrepancy, refer to the diagram in my first post. Your plan is older, hence it has more "bad risk". The average age would also be higher since it had closed to business earlier, and the healthier ones would've moved on to the newer (i.e. cheaper) plans.

Generally, if you are healthy and have nothing wrong with your health, you should move to the newest plan, SmartMedic Shield. The medical plan's cost of insurance will be significantly lower and the benefits will be significantly better. Plus, with a deductible of RM300, the expectation is medical claims experience will be somewhat better contained.

Can you share the quantum of increase from the PDF? At the bottom, they also share the % value in increase.

Age moving to costlier bracket is completely priced into the cost of insurance at inception.

Medical inflation is also somewhat priced in.

What is not priced in adequately at the point of purchase, is the loss of good risks and a higher proportion of bad risks within the pool.

This post has been edited by contestchris: Jan 19 2024, 12:04 PM

How many repricing have you experienced? Any chance you can share the latest repriced rates table?

In any case, if you have pre-existing, you have 2 options:

1) Play it safe and maintain existing cover. Will be more expensive (and exponentially so as you get older as more and more repricings are done), but you will have certainty of cover.
2) Upgrade the medical plan with clearly disclosing your pre-existing. At this point, pre-existing illnesses will not be covered but at least your premiums will be lower.

Under no circumstance should you upgrade your plan or buy a new plan without disclosing your pre-existing conditions, that's going to be a tough lesson to learn when they terminate your policy due to non-disclosure.

I believe these are the launch rates for SmartMedic:



Basically, for age band 36-40 for a Male for SM200 plan, the charges have increased from RM574 at inception to RM1,292 (after 2 repricing exercises). A 2.25x increase! Each repricing exercise has seen an increase of 50%.

Meanwhile, SmartMedic Xtra (SMX) has also seen 2 repricings. However, the quantum in % terms has been lower, increasing at 20% in 2020 and 30% in 2023.

Currently, for M36-40 on SM200, the insurance charge is RM1,292 while for M36-40 on SMX200 the insurance charge is RM1,139.

On the surface level, this doesn't make much sense as SMX is a superior product to SM. But when you consider the "health" of the insurance pool, then you start understanding why SM is more expensive than SMX despite offering inferior benefits.

Manulife already have a NCD based medical plan.

Hmmm, but that's how insurance works!

I believe one avenue that can be improved is doing more stringent medical underwriting. Too many frauds are getting medical cover without appropriate loadings and exclusion. Agents collude with customers to obfuscate this information.

Look, all those increases due to age...those have been fully factored in at the point of purchase. The insurance company has to suggest a premium that is sustainable till the end of your coverage period.

The increase in insurance charge due to medical repricing, sadly this is not factored into the premium. There might be some buffer priced in, but not enough to withstand a significant repricing.

All other things equal, coverage will lapse before the contractual term.

Yes they send a Sustainability letter to you every year.

Of course, you can do single premium top up in the future, just make sure your policy doesn't lapse in the mean time

Please don't buy because of that. AIAs repricing might just behind the corner