There are mainly two types of insurance for protection.
Term insurance and investment-linked insurance.
Term insurance increase in price according to your age and the increment is already fixed in a table. You can find this “increment table” in your policy book.
Investment linked does not increase in price according to your age. Like term insurance, the cost of insurance still increases according to the “increment table”. However, you pay extra now and this amount will offset future increments.
Does that mean investment linked insurance does not increase in price?
No, investment linked insurance still increase in price, not by age, but by inflation. The industry term we use is “medical repricing”. This increment is due to the claims exceeding the projected claims by the insurance company.
Hence everyone, has to pay more to maintain the pool of fund, so that in the future, customers can still claim from the medical card.
Term insurance is affected by medical repricing too. So instead of increasing it’s price according to the table, now the whole “increment table” increase in price.
So what can you do about it?
Upgrade your medical insurance
If you are still healthy you can upgrade your medical insurance to the latest medical card. New medical card is priced according to the latest inflation status of Malaysia. Hence you will be getting higher benefits at a lower cost.
Change your plan to a deductible plan / co-payment (If available for your plan)
This means you need to bear a part of your medical bill and the insurance company will not cover the whole medical bill. This means that your monthly premium will reduce as well.
Use regular investment top-up
Do understand that there are two types of premium paid to your policies, insurance premium and investment premium. Agents earn high commission from your insurance premium, so if you want your plan to have a reduced payment, you can top-up with investment premium that has a much lower commission compare to investment premium.
Medical repricing cannot be summarised in one post, we have merely scratched the surface. If you are facing medical repricing and you are not sure what to do, get a consultation with us. It is free.
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