So you are saying, assuming my health remains the same, ditching a medical card insurance is like ditching a car insurance? Unlike life whereby buying a new life insurance at 9 yrs older means higher premium?

I was thinking of changing from Prudential to AXA. The lifetime limit seems to be twice of Prudential at roughly the same premium.

yes assuming axa does not want to impose any loading or exclusions on you you can simply switch the policy. this is the advantage of a general insurance product. unlike like with rider you are not bound. the premiums are per age band and no old age savings to couchon the increasing premiums are beeing made that you might loose. so you loose absolutely nothing.

but: do make sure axa want you without exclusions and loadings first. also insist to treat the change as a takeover of the policy. if you dont get it as takeover, waiting periods apply that last up to 120 days for specific illnesses. if such periods apply you should make sure that your cover from prudential overlaps with the new axa plan so that prudential would have to pay when axa will not yet pay. always try to account for the worst

and i agree with you on axa. they're benefits are lot better than most other insurances in the market. but i think only the SmartCare Executive has a lifetime limit. and this plan has a major catch. they have a sublimit per disability! please be aware of this.

the SmartCare Optimum does not have any lifetime limit only an annual limit. i strongly suggest this plan over the executive plan despite the difference in cost. in the long run not having a lifetime limit is almost invaluable esp. if you intend to run the plan until old age.

Wow. You sure know this insurance thing. Thanks.

So now I know Medical card is just a form of general insurance product like car insurance, fire insurance or marine insurance. In that there is no advantage or reward for having stayed with the same insurance company for many years. Find a better offer and jumping ship is the name of the game. You lost nothing.

But can you clarify further what you meant by rider and old age saving thing?

And if I go to AXA, do I have to undergo all the medical examination thing even though I have never made any claim from Prudential?

Much appreciated.

This post has been edited by Optiplex330: Jul 18 2009, 08:49 PM

Optiplex330,

i just want to highlight one important difference when it comes to medical insurance:

if you are under a guaranteed / no loading / no exclusions plan there is a benefit to remain once sickness strikes. you still get the low premiums that everyone else gets while new companies will put loadings and / or exclusions upon you. also when you are in the renewal only part of the insurance you wont be able to switch anymore.

regarding your question of old age savings: this does not exist in malaysian policies. in europe many health plans work like this: despite the insurer beeing able to offer very low premiums for healthy people, they ask you to pay more. this extra is then saved and will be used to offset your premiums in old age. the catch: its not easy to move these savings from one company to another so they can effectively lock you in through this measure.

with respect to the rider and you beeing bound: what i mean is that if you buy an ILP product (i.e. life with medical rider) you are commiting to a significan savings plan. if you later decide to switch companies and you want to cancel the plan, you have to cancel the entire policy. this usually means you are loosing out. also you are commiting a larger part of resources this way which might be harder to come up with in old age when premiums might very well be 1000 RM per month or more for an adequate cover.

if you go to axa the medical info will depend on your age and wether it will be treated as a takeover or not. in most cases a health declaration will do. make sure to disclose any little detail you can think of. if you remain silent about it, the insurer might be able to cancel the entire policy at a later date due to misrepresentation of facts.
usually listing everything will mean no harm - they might just ask you to clarify in order to avoid an exclusion.

i suggest you call AXA and let them know you want tho switch under takeover from your current prudential plan. they will advise you further. please note that if the benefits are significantly better than your current plan, your switch might not be considerred a takeover and waiting periods will apply.

on a sidenote: the agent comission for health insurance is high. i believe its 15% of your annual premium every year. if you find an agent to split comission with or go as a walk-in you can save a significant part of the premiums. AXA does not offer a walk-in discount so you need to find an agent to split comission with. (i am still looking for an agent to split the comission with for my tokio marine plan!)

personally i always try to get the agent comission as a walk-in. if they refuse, i look for an alternative insurance. if none exists, i look for an agent to split comission with. otherwise i still go direct as this means the company is saving money and if everyone would do this this would mean that premiums can remain lower for a longer period of time. (no offence agents, i know some of you do a good job in helping with claims but not everyone needs this help. most insurers will also help you if you know your rights. if you are of the kind who accepts anything an insurer tells you, then its better to seek the help of an agent for claims....)

Thanks for answering my question and I am trying hard to understand all these. In the process, more questions and hope you wouldn't mind answering.

On rider you talked about. My present Prud is indeed investment linked. From what I understand, it composes of 3 parts, namely,
1. a life insurance of minimal value.
2. a saving in the form of investment in some unit trust
3. a medical insurance.

And I do understand the value allocated to the investment and medical insurance varies with time, with more toward med insurance as time goes by. And this is important---by continuing to stay with Prud, they are not going to give me discount on the medical insurance anyway (it being a General Insurance product), as we mentioned before. Right?

If the above is correct, do I have the following few options?
1. Continue to pay for the life insurance and investment BUT cancel the medical insurance. By doing so, the life insurance remains active until I die and the investment part will continue to grow because I am still putting new money into it.

2. Stop paying everything. The medical insurance will lapsed and automatically cancel by year end. But the life will remain active till I die. But because there is NO new money into it, the investment part will no longer grow but whatever had been invested in the past 9 years is still there either for me to withdraw right away or upon maturity.

Is my above understanding correct?

Thanks again.

This post has been edited by Optiplex330: Jul 19 2009, 02:52 PM

Optiplex330,

first of yes, you are in a bit of a problem. the good part is the minimal value of the life insurance. i understand it's already nine years old. i am not sure how much you have already saved but in the current situation its likely that the savings part is worth now only 60-40% of what you initially paid into. ending the entire policy would thus lead to a significant loss.

i am not sure if you can cancel just the rider. your agent should be able to help you there. what you are facing is the main reason why i suggest not to use ILP for medical cover.

from my point of view option one and two dont make a lot of difference since you are not forced to materialise paper-losses. i.e. you can wait until the funds rise in value again. if you deem the performance good then you can continue to invest further.

it is very hard to say what is the best solution for you right now. one would have to look into the contract to see where exactly the money is going to. we would also have to consider agent comissions when looking at options and what alternative investments are at your disposal. at the end of the day the question would be: how do you profit more - stop paying, just canceling the rider or even cancel the entire policy (most likely not a good idea). then we take into account moneys freed in the process and apply an alternative investment (you could for example buy the same funds through the bank). then you can make an unbiased decision just based on optimising your future funds.

how much are you paying right now for the plan and do you know the current distribution of the money into the three parts?

Last year, I checked and it was roughly RM1250 to medical, RM130 for life and RM400 for investment. What do you think?

Optiplex330,

alright. since the majority goes into medical, i would be very much biased to switching. this is the good news. 1250 annually should buy you very, very good cover (assuming you are below 35).

have a chat with prudential about canceling the medical rider. then you can decide if you want to keep the remaining insurance of get a new one alltogether. also get the current surrender value so you can see how big your loss (if any) is.

if you are unable to cancel the medical rider then you will have to consider two options:

a) cancel it all and cut the losses
b) use AXA and keep Pru as a top-up. considering the premium (how old are you btw?) this is a waste of resources though and you will probably be better of with a) and using a different insurance as a top up.

PJusa,

I thought both SCO and SCE has per-disability limition ?



And just to add on a comment for Optiplex330,

Your premium allocation seems weird. After serving this ILP policy for 9 years, your ILP should not just use RM400 for investment. Assuming your policy premium is RM2000 a year, RM2000 should be used to buy unit trust, and PRU will then deducts the life insurance cost, medical cost, as well as other riders' cost from the units... Or is this not an ILP?

Btw..Another consideration whether to drop the ILP entirely or to keep the live protection part of it (assuming Pru allows you to cut the medical rider), is to look at your age. Insurance cost for ILP increase significantly after age 40 (increase almost every year after this age).. So, if you are still below 30 or so (have another 5-10 years to reach 40!), i would say keep the ILP if financially allowed. AFter paying for 9 years, premium allocation % of your ILP has just started to allocate 100% of your premium into investment (buying units) after 7th or 8th years (pls check with your policy). And If Pru allows you to take away the MC rider, it would just means more $ are allocated into buying the funds of your choice and maintaining your high life coverage at the same time.

I hope I'm right, but pls anyone could jump in to correct my understanding if this is wrong.

FIrst of all, I would like to confirm with you, is your plan name is Prulink Assurance Plan? If yes the following answer is applicable for you.

1. You can adjust your benefits in your policy. So, you are able to take away the medical benefits. Premium is also adjustable.

2. From your annual limit, I believe you are having PMM3 as your medical card. Which lifetime limit is 3 times of the annual limit. If you plan to switch to AXA, you will need to consider another top up policy for the outpatient treatment.

3. You can also choose to upgrade your medical card from PMM3 to other Prudential newer medical card. Which is
- PMM5 - lifetime limit is 10 times of annual limit
- PruHealth - currently it does not support upgrade from existing plan yet.

4. You can always check with your agent for the amount of cash value/number of units in your policy. We have a system to view this.

5. If you plan to cancel the policy, now is not a good time as the unit price is low after the economy crisis.

If you need anymore explanation on Prudential product, feel free to ask here or PM me.

In my case, my priority is to find medical card for my son as both of the parents have already company medical card. I prefer to have takaful product however still uncertain whether to take the standalone medical card either from MAA Takaful or Takaful Ikhlas OR the medical card attach with the ILP. From what have been explained to me the ILP is like 'savings'. but is it a true saving? because if saving all money that we paid can be withdraw at later stage + the dividen (maybe after 5-7 years).

From what I understand what we pay to this ILP is burn however we might get the return (dividen) at later stage. Maybe after 10 years we might get back the return which equal or less than the amount we already paid. if what I thought is true, this is not a true saving. hope anyone can enlighten me

your worry is valid, ILP is not a true saving, its an investment. when market goes south, you lost in your investment and may lost so much that your coverage is affected. Like wise, it can go up more than other true saving products like the normal endowment.

one key good thing about ILP is you pay lower fee to the insurance company, ie. 20% vs traditional products at 40%

i believe there are also products like capital guarantee ILP, so you will never get less than your total premium paid if the market is bad when you withdraw, but if the market goes up you can get higher return.

some case studies here

http://malaysiapersonalfinance.blogspot.co...eed-saving.html

and its analysis here

http://malaysiapersonalfinance.blogspot.co...s-not-rate.html

Allianz ?
http://malaysiapersonalfinance.blogspot.co...teed-4-028.html

in ILP, one should choose monthly premium payment, unlike traditional products where annual payment should be choosen
http://malaysiapersonalfinance.blogspot.co...tment-link.html

TQ for your reply. I was thinking to stick to the priority so just getting the medical card first

yes, medical card is one of the most flexible standalone plans that you can change, add at a later date .... unless your health seriously degraded.

I keep mine out of any other plans too. But now during economy down turn and affected, paying the medical plans feel painful

do let us know which one you buy eventually and why, thanks !

numbertwo,

SCO does not have a sublimit per disability. hence the substancial difference in premium.

c.o.o.l,

from the premium that is allocated to Pru Medical benfits, it's not advisable to upgrade if he can cancel the medical rider. this would be ideal as it's then possible to use this money to buy a medical insurance that does not carry an additional life-time limit. it also frees Optiplex330 from the ILP medical card. wether 10x or 5x annual limit its still a major limit and most will regret this when they are old and stuck with the plan. change now while there still is time if the need only exists for outpatient cancer/dialysis there are cheaper plans that serve this purpose. and by cheaper i mean 5x or more.

cenkudu,
do get a standalone medical card that fits the budget. when it comes to medical i would not consider an ILP plan. dont try to kill two birds with one stone here. seperate them.

mtsen,
care to elaborate what you refer to by "one key good thing about ILP is you pay lower fee to the insurance company, ie. 20% vs traditional products at 40%" what do those numbers refer to?

PM me if you need to learn all about insurance + investment.

I'm from actuarial science background and will be delighted to offer you 2 hours lessons on basic of insurance and basic of investment for FREE! (You can buy me drink if you want to)

However, my location is in KL and subject to availability.

Drop me a message if you want to learn more.

serious ? which part of KL ?

---

Added on July 20, 2009, 2:40 pmfirst year agent commission in insurance products, it ranges from 10% to 40% for different type of products.

This post has been edited by mtsen: Jul 20 2009, 02:40 PM

PJ,
strange, did you buy this much earlier?

I'm seeing this in their current copy of their brochure .pdf .

Overall Annual Limit
(for Section A and Section B)
PLAN 1 PLAN 2 PLAN 3 PLAN 4
RM500,000 RM200,000 RM100,000 RM50,000
SECTION A IN-PATIENT & DAYCARE SURGICAL PROCEDURE (per disability)

Seriously.

Often in Cheras, KL Sentral Area, Damansara, and places around there.

---

Added on July 20, 2009, 3:11 pmJust read a few pages of this thread.

Seems interesting.

For you guys information, I work in reinsurance company and not aware that there is any standalone CI product out there.

In other words, CI must come with Life, and if you have agent to ask, the CI coverage must not exceed life coverage.(double confirm with them)

Hope that helps.

This post has been edited by Vitorbarbosa: Jul 20 2009, 03:11 PM

numbertwo,

you read correctly, the plan lists out per disability. but there are no special sublimits in SCO. inactual fact this even better for you because the limitation on "Total number of days" is per disability. so if you have several unfortunate events in a year, you can in theory be hospitalised 365 days and they still pay. the same holds for the sublimits on
Consultations & Diagnostic Procedures within 31 days before hospital
and
Post Hospitalisation Care and Physiotherapy Treatment within 31 days from hospital discharge
they are per disability and as such are much higher than a plain vanilla annual limit.

i hope this clarifies your question.

Vitorbarbosa,

thanks for the info. i thought so and it's a shame but it does make sense. however CI should be meant to cover for lost income due to CI anyway and not to cover medical bills. this would be almost always (not for AIDS and some others) be the case anyway.

since you are from the industry: is it possible to buy a minimal life insurance (i.e. sum insured 1k) and attach a significant CI plan along (i.e. 500k or higher)? due to the fact of beeing forced with life+CI i have insured myself outside malaysia but one never knows...