I really find it puzzling with the extra cheap annual premium of TM's Medical card as compare with other few local Life IP. Anyone know why? Really puzzle me.... Haha.. wish to find out more as i am holding two expensive medical card (2x more expensive with the same plan and benefit with the so-called Life Insurance Provider.

hi guys,

let me adress a few things raised here:

1. the tokio marine plan is guaranteed renewable after an initial period of 12 months without any claims. guaranteed renewable and renewable at the option of the policy holder are identical in this case.

the key phrase here is : "this policy will be renewable at the option of insured" i.e. wether renewal or not is solely up to the insured (i.e. if you decide to pay the current premium all is good). also no loading after the first year. it's legally binding - once they take you and you pass 12 months of continous cover you are in the game.

this is of course a catch and explains partially why the premium is low.

2. why is the premium so much lower than other policies?

because you have to pay 10,000 RM for each and every desease first. it's only meant as a top-up plan for people who actually already have a different plan as a basis. unlike for example the allianz plan with a deductable, with tokio marine room and board is not excluded.

3. renewal guarantee

any plan - no matter from which insurance company - has a clause that allows the insurance company to withdraw the plan entirely. you will not be able to escape this.
normally if you choose a reputable insurance company this will not happen. should is still happen, you will most often find that you will be offered a take-over into a plan close to your original plan though.

4. sihat malaysia

as chew_ronnie said: they dont guarantee renewal. in other words: their medical cover is worthless as your friend experienced. since they can refuse cover at renewal, their premium can be a lot lower than a guaranteed renewal plan. you basically pay a (high) loading for this feature that is build into the plans premiums by default.

5. i dont believe the statements made that life insurance companies are less likely to remove a plan from the portfolio is true. i believe that the risk assesment of the companies is equally good and will result in equal probability of withdrawal. if you look at the portfolio risk, probably general insurance portfolio is even less risky. ppl who buy med.insurance alone are probably the most health conscious ppl in the pool and thus pose the smallest risk. this is only a guess and i can very well be wrong there. of course it's true - the larger the group of insured (and the lower their individual risk) the better the insurance can cover for claims cases. thus its always desireable to be in a large group when it comes to insurances.

edit: one more thing to life insurance with med. cover: this is not really designed to be a medical cover to begin with. it's merely a rider. this should tell you a lot already. get the cover (i.e. medical cover) from a company that seriously covers this risk. i.e. by medical cover from a medical insurance and by life insurance (if you want to) from a life insurance company. those are entirely different things and i dont believe they should be combined to begin with. if you ever need to terminate the life plan (say cause you cant afford the premium) your med cover is gone too. if you have just life and just med... you can easily cancel life and dont have to worry about med. why risk such things in the first place?

This post has been edited by PJusa: Jul 16 2009, 03:32 PM

Thank you for the time spent on flipping thru the policy contract..

I hd a word with their underwriter.. The first query about "12 months non-claim" clause, you are correct. subsequent years will be 'guranteed renewal'.. However, the underwriter told me subsequent renewal, although it is guaranteed renewable, they will still have to look at the claim experience, and exclusion or loading is not impossible especially when 'cancer' claims happened , as he mentioned.. Just sharing.

Anyhow, I think this is still worth a consideration for cutepigy, who is holding two expensive cards, where she/he can take the option of one major(the card) and another being the 'deductible' policy.

thanks for the reply. i seriously doubt any loading or exclusion is legally possible under this contract - despite what their underwriter says. the wording is actually very precise. no individual loading after the 12 months period. of course they might try it but i would assume they would loose if i contest it in court. i double checked with my lawyer and they agreed - if they try contest it. they have no legal foundation to impose a loading upon any individual who is insured under this policy after the initial 12 months period has lapsed. i find the information however very relevant. it's bad if tokio marine does not honour their contracts. i will double check on this particular issue tomorrow with whoever is in charge of the operation. if they do this - it's an outrage and i will file a complaint with bank negara. not that i am affected but it's unethical.

The guaranteed renewal of the hospitalization & Surgical Insurance does not include premium. In other words, the policyholder can renew but the premium amount is not guaranteed. There is no way any insurer can guarantee the same premium rate given that the medical inflation and cost of health care is not static and unpredictable.

General insurer normally underwrites the risk on a yearly basis while the life insurers underwrites based on the long tenure of the policy bought. That explains why general insurer's premium is much lower as the risk to them is only one year. Thereafter , upon renewal it is being underwritten again, i.e. the risk is being assessed again and appropriate premium accorded

In the case of a life insurer, as long a the premium is paid on time, the policy will continue, but they can increase the premium as this is not guaranteed though the renewal of the contract can be guaranteed.


The other difference between general insurer and life insurer is, general insurer can increase the premium of an individual member based on the individual risk, while in life, the premium increase is done across the board to everyone based on the en bloc risk from time to time subject to approval from the Regulator.

Even there is guarantee renewal, the insurer has the option of not transacting the portfolio, however usually the existing policies can continue until its expiry at the next anniversary of the policy. There is another version of policy termed as non cancellable policy where the insurer cannot cancel the contract on its own as long as the member continue to pay the premium. However, the catch here is the insurer can continue to raise the premium given that the cost of claims continues to hike . This will eventually force the member to abandon the ship when the premium is no more affordable or make sense to continue.


As such , as I have mentioned in my earlier msg some where that we must take note of how the insurer manage their risk, as they have the moral responsibility to take care of the fund contributed by the people who do not claim as they are healthy.An insurer that is very liberally and freely paying claims can be a concern, as the fund of people who do not claim can be depleted fast and premium can go up. Always remember this, insurers are not prepared to lose money.

So friend, I hope I have not confused you

Justin1000,

it's totally clear that the premium is not guaranteed. that is the case for general insurance as well as a medical rider. how else could it be? there is no difference with this respect between life and general insurance at all. if i take up a guaranteed renewal contract from a general insurane the situation is the same as with a life insurance. premium might go (it surely will) but they have to take me. if you choose your policy properly your insurer will not have the right to increase an individual premium. this defies the purpose of the insurance. neither AXA nor TM can increase the individual premium after accepting a risk. this why they are interesting after all. many general insurance companies do reserve this particular right so you have to choose carefully but its not across board like that. with life insurance i believe only the life portion of the insurance is subject to regulatory approval for premium increases. the riders can to the best of my knowledge be increased merely on internal risk assessment.

for a guaranteed renewal (which is no longer offered in contracts) companies offer a renewal at the option of the insured. this does make a difference becauese it does not allow the insurer to refuse renewal as long as the product exists. and even if the portfolio would be withdrawn existing policies can lapse out first.

so i am a bit at a loss as to what point you are trying to make. with respect to your points there is no difference between life and general insurance with respect to change of premium and strategy to make you cancel. only with life you also loose the rest of your protection if they increase the rider premium for healthcare to a level you cant afford. so again you are better off just loosing one policy than a package or worse even beeing forced to let go of the investment part in a unfavourable economic environment.

the only points that matter imho are:

- large base
- good claims handling
- affordable premiums (to allow for large base)
- concentrating on a product at a time and not a set of products

Hi ya,
Not quite true as far as I know from reading several medical card brochures and getting explanation from the respective company... THere is a clause in the general insurer's (Note : not from all general insurers though, must find one that has it) medical product that says "..Portfolio Pricing of premium.." - Increase of premium will be on portfolio basis, person who has claimed on the policy will not be singled out to pay more premium than others.'' This is a direct quote from xxxx product brochure and I take it that it has a legal binding too.

numbertwo,

you are absolutely correct

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Added on July 17, 2009, 12:04 pmnumbertwo,

i had a word with bank negara regarding what the underwriter told you. they were very nice (and free as it seems). they told me that based upon the policy wording it is impossible for TM to impose any kind of individual loading. this is further confirmed by this statement:

"15. [..]
On each such anniversary, this Policy is renewable at the premium rates in effect at that time as notified by the company.
"

the problem they and i now see is that they reserve the right to alterations of the policy. TM reserves the right to ammendments only. which in fact means that the whole portfolio can be changed. the question is: since it only covers ammendments, the renewal most likely cant be changed but the list of exlusions might be ammended. so your underwriter might be right about this. the grounds for this are however very shaky. i will let my lawyer skim through the contract again as mine is due for renewal soon and i dont want to make any mistakes there. my lawyer seems to be of the (current) opinion that ammendments to the contract should only be legal if made to the portfolio contract but its a lot to read so there might be a loophole hidden for TM.

This post has been edited by PJusa: Jul 17 2009, 12:04 PM

You are truely a respected consumer

Don't we all used to screw by this term : "xxxxx reserves the right to change the policy/contract" in all kind of contracts in M'sia... *SIGH*
I guess the minimum requirement we must filter or insists on the policy is the amendment/introduction to the exclusion list must not be made on individual's past claim records, it must be on portfolio basis.

numbertwo,

yes i am afraid so. at least TM only reserves the right to ammend the policy. big difference there. still it's bad for the customer. as a consumer who is looking for a healthcare policy you need to be 110% sure you can rely upon the insurance company even if you cost them a bomb as an individual. otherwise you dont an insurance right?

i will get in touch with tokio marine and will try to get an official statement from them. this will probably be very hard but it's worth a shot. also if we can obtain a guarantee of some sort that the right to ammend will not be exercised to impose exclusions that are not portfolio based things would be clear for everyone who uses their insurance.

lesson: tripple read policy wordings bit by bit. it's not enough to read it once (sigh).

i know that AXA is commiting to this. they will not impose any kind of loading nor individual loading and they guarantee the renewal after they accepted your proposal. that is a good plan - it does come at a price though - if you are 80 your premium for 500k annual limit exceeds 10,000 if i am not mistaken. but at least they are honest with the insured about costs and terms. simple annual limit, no life-time limit on top of this only the one implied by the annual limit. i like that very much

if i get anything out of tokio marine i will report back. i am still convinced that their plan _can_ be the ideal top up when u need just a little extra buffer and a good outpatient dialysis / cancer cover.

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Added on July 17, 2009, 1:54 pmi am very surprised. i just spoke the TM HQ: they checked for me and ammendments are only on a portfolio basis. they suggested i write in and will get an official reply on the matter. i will do this as this will leave no further room for interpretation. this is very good news for me and i do hope they will confirm their reply in writing and not change their reply in the meantime

should they commit in writing to only ammend on a portfolio basis, their insurance should be ideal as a top-up and meet the strictest and most demanding consumer

i have to say i am really glad we are having this discussion and are getting into the details. i creates awareness among all of us and we all learn a lot dont we? i always thought i was safe by the no loading part but seriously overlooked the trap of ammendment until now.

This post has been edited by PJusa: Jul 17 2009, 01:54 PM

Wow, spend some time reading the post. PJusa you really spend alot of time in getting to know what you actually buying. Thumbs up on you. There is still alot of people who dono what they have bought.

PJusa,
yes pls do update us when you get their official reply.. But instead of replying you on individual basis, I do wish that they could publish this 'advantage' in their product brochures, or even their online web.. This will surely attract lots more buying interests.

Actually i met up with a ''financial planner'' - (who could represent several insurers instead of bias to only one), he only recommended the TM's PA to me but not their Medic plans, but instead he recommended Pacific's for the same reason we have been discussing - the exclusions/loading bit, becoz TM has never specifically lay this 'advantage' down in any of their brochures.. And because of this, I am quite close to pen down the Pacific top-up plan, as they are the only one putting down black n white on their brochures on no loading/exclusions on personal basis.. But like you said, their premium is not the cheapest after knowing that TM has the similar top-up plan. So, let's hope things turn brighter soon..

tc

numbertwo,

i will post their reply here. i was also draw between pacific and TM - in the end i didnt deem pacific's plan worth it. our basic cover is relatively high so we only need minimal additional coverage mainly TM's outpatient benefits. this is why i am reluctant to spend a lot there (esp. when you get old).

i am surprised your financial planner suggested TM for PA. is the dollar to dollar ratio for cover vs. premium that good? dont forget the PA comission is 25% so if you go directly to a different insurance you will be able to reduce the premium substantially. i tried many times to get a walk-in rebate from TM (=pay me the agent comission) and they always refused. same with MSIG. other companies do pay you the agent comission...

This post has been edited by PJusa: Jul 17 2009, 06:17 PM

Life policy (other than term plan)does not increase the premium once it is locked in, that is why it is always good to buy young. However the mrdical rider or plan, the insurers can increase the premium subject to approval from Regulator.
From what I understand, traditionally general insurer's H&S plan is priced on a year to year basis, if there is some thing new , share with me.

Justin1000,

as you just said - its the same thing. the rider is not guaranteed premium wise. non of the life insurance plans i have seen (AIA and some others) have a fixed premium for the medical rider. this would not make sense anyway unless the premium is set waaaay to high to begin with. they dont want to make a loss on the rider after all. all the life plan proposals i have seen (have an AIA in front of me) highlight the very fact that the medical rider's premium is not guaranteed and will increase with age.

if this would not be true, life+medical rider would be the secret recipe to low healthcare premiums. just buy for the newborn and be safe. it's just not like that at all.

Some said this is correct.

Furthermore, some people also said medical card (MC) insurance is similar to car insurance. Whereby if you do not make any claim, at the end of the year you do not get any money back either. This is very unlike life insurance whereby it is usually not advisable to surrender a policy because you had bought it when you are younger.

Assuming these 2 facts are correct (please correct me if I am wrong), then there is nothing to lose if we cancel off a present MC policy (originally bought 9 years ago) and opt for others that we think is better. Am I correct?

Thanks in advance for any help here.

hi Optiplex330,

this is not entirely true at all. if you buy a medical insurance early (as early as you can actually!) and you have a guaranteed renewal, no loading, no exlcusions policy you have made the best possible choice. if sickness strikes, no matter how hard, you will have an insurance to cover for you. this is the principle of insurance. if you wait until something happens, such risks are becoming bad risks - noone will insure them and you will have to fork it out for yourself.

insurance is not about getting money back. dont confuse this please. it's a common misconception in malaysia that an insurance should make you money. this not at all the case! let me explain to you what the purpose of an insurance is:

a group of people realise that they are all exposed to some risk (sickness for example) which can potentially be very very expensive. so expensive indeed that they would not be able to pay for the costs themselfes. but there is an advantage: the risk that such a risk materialises is very very small. if however it occurs it will ruin the individual. now say the costs would be 250,000 for a specific event. the risk that it will materialise is 0.001% annually. so on average anyone of this group will face an _expected_ loss of 250,000 * 0.001% = 2,5. this is very little indeed! so if a large number of people agree to pay 2,5 every year (plus some admin fees etc. so maybe make it 3,00) into a large pool and if one of them faces the loss the losss shall be absorbed from the pool then this is an insurance.
for the individual the loss is now know: i have to pay 3,00 annually to be covered. that is that. i will have to pay no matter what but if something happens, the group will save me.

its not the group's pool purpose to invest 3,00 annually and return profits to you. that is what investments are for. dont mix insurance and investment as they are entirely different things. this is also why i do not support ILP life insurances with medical riders. they dont make sense from an economical and risk assesment point. probably the main reason why people buy them anyway is because you are promised some kind of profit. that is not what insurance is about though.

if you cancel your present medical policy to switch to a new one, the new policy will asses your risk at the current situation - not at the situation when you first signed up and were (possible) more healthy. so when age increases, you will find it harder to find an insurer willing to take over your risk without loadings / exclusions etc. esp. if you made claims in the past. if you are still healthy, there is no problem with switching at all - you can even apply for a takeover so the waiting periods will be mostly or entirely waived. i have switchted three times in the past without any hassle but this is because we were and are still in good health and young.
if you wait until you are 55 you might get yourself into trouble. it wont be as easy to get cover as with age 1. for that reason you should stay away from lifetime limits and only seek annual limits (with an implied lifetime limit of limit*years of insurance possible). otherwise once your limit is eaten up, you are in trouble too. such life time limit policies are only usefull as top-up for extra expensive risks.

hope i was clear and not too confusing

Thank you for your detailed explanation. Yes, I already knew that insurance is not for profit and if you have disease, the premium are no longer the same etc.

What I wanted to know is, assuming our health remains the same as 9 yrs ago when we bought our 1st medical insurance, and now another company offers a better deal, is there any reason not to switch? If it is a life insurance, I don't think it is wise to do so. But if Medical insurance is like car insurance, I don't see why not?

The insurance cpg that I first bought from 9 yrs ago has a lifetime limit of RM225K. Annual limit of RM75K.

But another company seems to offer better benefit for roughly the same premium. Hence my thought of switching.

This post has been edited by Optiplex330: Jul 18 2009, 05:04 PM

Yes, H&S plan's premium goes up for different age band. THis applies to all whether it is life or general insurer.

In life policy, a basic policy which pays for death or disability, while the medical rider is for other benefits such H&S, Accident etc. One has the option to buy just a basic policy with or without riders, and there is another option of buying a package plan i.e. basic plus rider say H&S, if this is how the insurer markets its product.

For both the instances, the rider plan will go up per the age band while the basic plan premium stays still. However depending on the insurers, for the package plan, there could be a breakdown on the rise while for some companies, it may just show as a total increase.

On top of the periodic increase due to age band, insurer has the option to increase premium ,if the claim cost is too high to make the product sustainable.

Optiplex330,

in that case apply for the new company and request a take over. take overs are "encouraged" by bank negara. take over means your waiting period will be waived. otherwise you need to account for an initial overlap between the policies to ensure you are covered. for example a take over might be refused if the benefits are significantly better. in that case get the waiting periods from the company. for this duration you will need your old policy so you need to time the purchase properly.

other than that you dont loose anything as you would with life. you are perfectly save to switch assuming your health is the same. i would get the approval from new insurer first before i decide not to renew the old insurance.

mind sharing what company you want to switch to?

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Added on July 18, 2009, 6:12 pmJustin1000,

this is exactly my point. there is and cannot be a difference in the way the medical cover works be it from life or general insurer. and this is the reason why it's not advisable to choose life + rider to cover for health. if you want to cover health - take a health policy.

This post has been edited by PJusa: Jul 18 2009, 06:12 PM