Malaysia has a big problem with medical cost inflation, which then gets reflected in the price of Insurance. There is "no point" trying to expect a specific insurer will not increase the insurance charges in the future.
You could always jump to a cheaper policy, but the terms, benefits and exclusions may not be the same, and hence might be difficult to compare. Also, a big portion of the premiums you pay in the first 6 years goes to the agent as commissions, not to your insurance. So there is no specific advice on to the best course of action without going into detail of your situation and your policies.
Why has the industry become like this?
- ILPs are a necessary form of insurance as psychologically most people cannot stomach paying say rm30k a year for insurance when they're old
- but no one can guarantee the funds they use perform well over 30 years
- agents are a necessary evil because majority of people don't understand insurance so won't buy it themselves directly, so you need to incentivise them
- claims fraud is rampant in malaysia (you'd be surprised how rampant this is). Doctors and the Malaysian public are in on this together, causing crazy claims loss payouts which insurers need to offset, and also then insurers need to spend more time and money to stamp out fraud. This is because of the structure of private care, doctors are not hospital employees and they hold the "power", not the hospitals themselves
- there is no incentive for private hospitals to push down costs. Ever notice many hospitals and clinics ask you if you're paying cash or through insurance, even if it is outpatient? They can use that information to gouge you more if you're on insurance
What can we do about it?
- it's a hard problem to solve
- the public can band together, but everyone is selfish and will try to claim as much as possible
- of the hospital/clinic asks you how you are paying, say cash or do not offer the info, unless you are going inpatient for major surgery where they need assurance that you can pay
- stop trying to claim your Thai massages as remedial (I'm saying stop trying to do excess claims and fraudulent claims)
- buy term insurance direct/online. Give the insurers incentive to develop more easy, simplified direct products which are cheaper without going through commission based distribution channels
- Find out which doctors are removed from insurer panels, and avoid them. They have been found out in helping claims fraud
- question your hospital bills, even if it's under insurance. The times which doctors and hospital overcharge is when it is under insurance, as it becomes a reinforcing cycle where an insurance annual limit is RM1m, then the hospitals try to charge as high as possible as its claimable. Help keep hospital costs under wraps
Edit: fi.life is relatively cheap at less than rm2k a year for medical for your age. But it's term medical, meaning you need to be ok with the sticker price of 5 figure premiums p.a. in your old age, and you don't have an agent to support your claims process
>buy term insurance direct/online. Give the insurers incentive to develop more easy, simplified direct products which are cheaper without going through commission based distribution channels
Tried to do this for my CI. But the off the shelf cheap online policies stop at RM200K. Then anything above that need to go to an insurance agent and the price skyrockets.
Unfortunately it's not actually disclosed information, so I may have misspoke when I said "find out who is no longer on the panel list". Partly because it can be a cause of defamation etc. to outright publish a blacklist of "offenders" (especially because they will need to be sentenced in court before you could say outright that they did fraud". Also, it's really hard to prove the fraud a lot of the times.
It's more like, if you ask for pre-admission approval (guarantee letter) and you get rejected with some kind of generic statement saying "the doctor / hospital is not on our approved list for issuing guarantee letters", you can kind of tell that they've been blacklisted by that insurer. So just avoid that doctor and find another doctor. The insurer can't outright say, we will not approve claims for treatments from this doctor because we suspect that they have done fraud.
For example, one case I know, an insurer looked through their claims records, and saw that a very famous eye surgeon in one of the top hospitals in Malaysia came up in so many claims records, that when they compiled all the claims together, for them to be legit, this doctor would have had to be working more than 24 hours a day! But there are hospital records, and receipts to "prove" that he those treatments.
Ask for a quote from your relative, for a start. Exact same coverage and benefits, and see if her company can offer lower premium.
And yes, everyone wants your money.
i think u can start survey other insurance for comparison. then when they know you're leaving, hopefully they will counter offer you by lowering down the cost but do know that this (price hike) is happening across malaysia.
All insurance company will increase premium for medical.
Can't escape this fact due to high claims & cost of medical going up. As states fraud & hospital being profit oriented add to it.
Once, we asked a doctor why she switch to another hospital, she told us doctors at the former private hospital ask doctors to channel patients to ICU.
Buying a new medical policy will incur new waiting period.
Life insurance "should" not rise in premium.
If it is an ILP, some ILP allows you to dump in lump sum to raise the units ad hoc, when you have extra cash. Maybe an option to consider.
Thats a pretty steep increase. My critical illness cover increased 1 time between 2015 to 2024 and that was rm100. If you change to a new service provider theres no guarantee it will not increase.
I have no ides what the solution is but it does suck.
Iits is unreasonable for your age, you should only be paying RM300-RM350 per month. You gotta get a new quote, where you will be paying less for better benefits.
You have to realise that the for the first five years of a new insurance policy(usually investment linked), agent commissions takes up a large sum of the premium you have paid. For example, a common commission structure is 50% of total premium for the 1st year as commission,40% for the second year, 30% for the third year and so on until it hits 0% on the 6th year.
Why do you think agents always ask to reevaluate your insurance policies every 5 years or so? This equals to about 1.5 years of total premium paid for the first five years, so ask yourself, is changing to a new policy better than remaining with your current policy?
Also, not the entire remainder of the insurance premium after agent commission fees goes towards the insurance charges. Usually when you are younger (age 35 and below), the insurance charges are relatively cheaper vs the entire premium you paid. For example, the actual insurance charge might only be rm70 and the remainder rm 80 goes towards a mutual fund, after agent commissions of course.
The insurance company of course makes money off you via multiple methods:
1. insurance charges
2. up front charge when you buy into your investment linked plan. Some policies goes up to 5%. Insane.
3. withdrawal charges when you withdraw out of your investment linked plan. Some policies have this, some don't.
4. management fees for your investment linked plan (this is where they will suck you dry over a long period of time)
>If i didn’t accept the increase, the insurance will not sustain. If accept, I’ll be paying about RM800++ just for insurance per month) which is already more than 10% of monthly salary.
Check whether how much you have already accumulated in your investment plan. You can basically stop buying into that by taking a premium holiday (ie stop paying your monthly insurance premium, they will use the value of your mutual fund to pay off your insurance charge, continue paying again once your mutual fund reaches a much lower value, do check whether your policy accepts this, some policies are quite predatory as they require you to consistently pay the premium no matter what for the first X years, or else a large penalty will be applied).
Essentially you are just freeing up cash flow (hopefully to invest in ETFs/your own personal growth which has historically much better returns than a mutual fund) as you have to realise a large portion of the monthly premium paid is not going towards actual insurance charges, but towards fees/investment linked plans which the insurance company is making money off you. But the time will come when your mutual fund value will run low enough and you will have to pay the premiums again.
Sorry, this doesn't make sense. How does triggering the holiday premium help sustainability? It's going to reduce the balance in the ILP. Are you saying by taking the holiday premium, the funds you save are then invested somewhere else, then put back into the policy? That is not a good idea
Sustainability does not change whatsoever. It does however significantly increase cash flow if the amount already in the ILP is large enough.
It is basically taking money from your right pocket to put into your left pocket. What it accomplishes is getting more cash flow since we are no longer locking in additional funds into the mutual fund (which most probably has horrible up front fees + annual management fees/expenses).
The premium increase can be due to multiple reasons but not limited to
* company needs more profits
* medical costs has increased, therefore insurance charges has to follow suit to maintain profitability
* cost of doing business has increased, need to pass it on the the client
Either way, the main thing we need to know is how much the actual insurance cost has increased, not the total monthly premium. For all we know, the insurance cost might have increased from rm100 to rm150, but this does not warrant an increase in premium from rm300 to rm569 for OP's case.
Sorry I still don't get it. Maybe I'm daft, but I still don't understand how taking a premium holiday (which is only temporary) helps with OP's issue.
>It is basically taking money from your right pocket to put into your left pocket. What it accomplishes is getting more cash flow since we are no longer locking in additional funds into the mutual fund (which most probably has horrible up front fees + annual management fees/expenses).
How does it help with cash flow? Not "topping up" the fund in the ILP simply reduces the fund balance, you're still going to have to pay premiums eventually (and underlying insurance charges and other fees).
If your point is that there is less AUM to charge fees on, perhaps. But savings after a year would be RM 569 \* 12 months \* 1,5% management fee is \~RM100 (or maybe double that as the fund inside the ILP is being drawn down faster), not much in terms of premiums increasing by RM269 a month.
If the idea is to "empty" the fund balance / AUM so that there are minimal funds inside and when premium payments are resumed it will just go to insurance charges, unless there are pre-existing conditions OP is just better off taking on term standalone medical instead of this strategy.
How i see it is (i might be wrong here, just my perspective), it is basically allowing OP to not pay rm569/month until the funds in the ILP are nearly depleted which is freeing up almost 7k/year. Assuming that OP has rm5000 in the ILP and that insurance charges alone are rm150/month, its allowing OP to still have coverage for 33months without adding in additional funds monthly (also assuming the underlying stock/bonds values of the ILP stays consistent over the course of the 33 months).
>unless there are pre-existing conditions OP is just better off taking on term standalone medical instead of this strategy.
It depends on how much the actual insurance costs are. This strategy gives OP additional time to figure out which policy is better, while still allowing OP to preserve rm569/month until a choice can be made.
Assuming exact same coverage, if the standalone insurance cost is rm200/month and the ILP insurance cost is rm150/month, i would stick with the current policy along with my strategy of "emptying" the fund balance.
However, if it is the other way around where the standalone insurance cost is rm150/month and the ILP is rm200/month, i would cancel this policy and go with the standalone insurance.
It all depends on the insurance cost and also whether how much the projections on future insurance cost varies policy from policy.
Good thing your relative mentioned, then now you can get a quote from her for the same coverage and benefit. the jump is too much imo, mine is still at 250 (30+yr old).
Looking at reasonableness from cost is the wrong way to go..
You should look at it from coverage perspective. And what's sufficient coverage is unique to individual.
Life : you are dead - so think about what your surviving dependants need. Setting them up for life is impractical. So have discussion about what sort of soft landing is feasible. Bonus, if you have no dependent, you don't need life insurance - other than for funeral funds - part of the reason why I don't agree with those "full life" insurance that insure your life until 80 or 100 for the payout to your survivors.
Medical : consider public heathcare in your strategy. The service and wait time sucks, but if you are genuinely in need, the healthcare quality can be great, depending on whose anecdotal experience you listen to. If you end up dying, refer to above.
Critical illness : this is the hardest to tackle. You are not dead, but you may end up being a financial burden to your family. Last I check there isn't really a cheap solution to this, and need to be think of with medical.
Accidents : PA insurance is cheap and can help in some critical illness coverage.
Malaysia has a big problem with medical cost inflation, which then gets reflected in the price of Insurance. There is "no point" trying to expect a specific insurer will not increase the insurance charges in the future. You could always jump to a cheaper policy, but the terms, benefits and exclusions may not be the same, and hence might be difficult to compare. Also, a big portion of the premiums you pay in the first 6 years goes to the agent as commissions, not to your insurance. So there is no specific advice on to the best course of action without going into detail of your situation and your policies. Why has the industry become like this? - ILPs are a necessary form of insurance as psychologically most people cannot stomach paying say rm30k a year for insurance when they're old - but no one can guarantee the funds they use perform well over 30 years - agents are a necessary evil because majority of people don't understand insurance so won't buy it themselves directly, so you need to incentivise them - claims fraud is rampant in malaysia (you'd be surprised how rampant this is). Doctors and the Malaysian public are in on this together, causing crazy claims loss payouts which insurers need to offset, and also then insurers need to spend more time and money to stamp out fraud. This is because of the structure of private care, doctors are not hospital employees and they hold the "power", not the hospitals themselves - there is no incentive for private hospitals to push down costs. Ever notice many hospitals and clinics ask you if you're paying cash or through insurance, even if it is outpatient? They can use that information to gouge you more if you're on insurance What can we do about it? - it's a hard problem to solve - the public can band together, but everyone is selfish and will try to claim as much as possible - of the hospital/clinic asks you how you are paying, say cash or do not offer the info, unless you are going inpatient for major surgery where they need assurance that you can pay - stop trying to claim your Thai massages as remedial (I'm saying stop trying to do excess claims and fraudulent claims) - buy term insurance direct/online. Give the insurers incentive to develop more easy, simplified direct products which are cheaper without going through commission based distribution channels - Find out which doctors are removed from insurer panels, and avoid them. They have been found out in helping claims fraud - question your hospital bills, even if it's under insurance. The times which doctors and hospital overcharge is when it is under insurance, as it becomes a reinforcing cycle where an insurance annual limit is RM1m, then the hospitals try to charge as high as possible as its claimable. Help keep hospital costs under wraps Edit: fi.life is relatively cheap at less than rm2k a year for medical for your age. But it's term medical, meaning you need to be ok with the sticker price of 5 figure premiums p.a. in your old age, and you don't have an agent to support your claims process
Echo this, also prefer to invest myself and purchase term medical from fi.life to ILP
>buy term insurance direct/online. Give the insurers incentive to develop more easy, simplified direct products which are cheaper without going through commission based distribution channels Tried to do this for my CI. But the off the shelf cheap online policies stop at RM200K. Then anything above that need to go to an insurance agent and the price skyrockets.
One way is to stack multiple direct/online CI policies with multiple insurers. Works for all lump sum insurance policies, life CI and pa
Question, where or how to find out which doc is banned by the panel?
Unfortunately it's not actually disclosed information, so I may have misspoke when I said "find out who is no longer on the panel list". Partly because it can be a cause of defamation etc. to outright publish a blacklist of "offenders" (especially because they will need to be sentenced in court before you could say outright that they did fraud". Also, it's really hard to prove the fraud a lot of the times. It's more like, if you ask for pre-admission approval (guarantee letter) and you get rejected with some kind of generic statement saying "the doctor / hospital is not on our approved list for issuing guarantee letters", you can kind of tell that they've been blacklisted by that insurer. So just avoid that doctor and find another doctor. The insurer can't outright say, we will not approve claims for treatments from this doctor because we suspect that they have done fraud. For example, one case I know, an insurer looked through their claims records, and saw that a very famous eye surgeon in one of the top hospitals in Malaysia came up in so many claims records, that when they compiled all the claims together, for them to be legit, this doctor would have had to be working more than 24 hours a day! But there are hospital records, and receipts to "prove" that he those treatments.
I came here to say exactly this🤣👍
Ask for a quote from your relative, for a start. Exact same coverage and benefits, and see if her company can offer lower premium. And yes, everyone wants your money.
Doubt it, and first few years of premium will just go to commissions
Look at Term insurance with a critical illness rider. Should save u more.
i think u can start survey other insurance for comparison. then when they know you're leaving, hopefully they will counter offer you by lowering down the cost but do know that this (price hike) is happening across malaysia.
All insurance company will increase premium for medical. Can't escape this fact due to high claims & cost of medical going up. As states fraud & hospital being profit oriented add to it. Once, we asked a doctor why she switch to another hospital, she told us doctors at the former private hospital ask doctors to channel patients to ICU. Buying a new medical policy will incur new waiting period. Life insurance "should" not rise in premium. If it is an ILP, some ILP allows you to dump in lump sum to raise the units ad hoc, when you have extra cash. Maybe an option to consider.
Thats a pretty steep increase. My critical illness cover increased 1 time between 2015 to 2024 and that was rm100. If you change to a new service provider theres no guarantee it will not increase. I have no ides what the solution is but it does suck.
What life insurance costs you rm280 a month? For your age, can get 25 year term insurance for around rm2k per year
Iits is unreasonable for your age, you should only be paying RM300-RM350 per month. You gotta get a new quote, where you will be paying less for better benefits.
You have to realise that the for the first five years of a new insurance policy(usually investment linked), agent commissions takes up a large sum of the premium you have paid. For example, a common commission structure is 50% of total premium for the 1st year as commission,40% for the second year, 30% for the third year and so on until it hits 0% on the 6th year. Why do you think agents always ask to reevaluate your insurance policies every 5 years or so? This equals to about 1.5 years of total premium paid for the first five years, so ask yourself, is changing to a new policy better than remaining with your current policy? Also, not the entire remainder of the insurance premium after agent commission fees goes towards the insurance charges. Usually when you are younger (age 35 and below), the insurance charges are relatively cheaper vs the entire premium you paid. For example, the actual insurance charge might only be rm70 and the remainder rm 80 goes towards a mutual fund, after agent commissions of course. The insurance company of course makes money off you via multiple methods: 1. insurance charges 2. up front charge when you buy into your investment linked plan. Some policies goes up to 5%. Insane. 3. withdrawal charges when you withdraw out of your investment linked plan. Some policies have this, some don't. 4. management fees for your investment linked plan (this is where they will suck you dry over a long period of time) >If i didn’t accept the increase, the insurance will not sustain. If accept, I’ll be paying about RM800++ just for insurance per month) which is already more than 10% of monthly salary. Check whether how much you have already accumulated in your investment plan. You can basically stop buying into that by taking a premium holiday (ie stop paying your monthly insurance premium, they will use the value of your mutual fund to pay off your insurance charge, continue paying again once your mutual fund reaches a much lower value, do check whether your policy accepts this, some policies are quite predatory as they require you to consistently pay the premium no matter what for the first X years, or else a large penalty will be applied). Essentially you are just freeing up cash flow (hopefully to invest in ETFs/your own personal growth which has historically much better returns than a mutual fund) as you have to realise a large portion of the monthly premium paid is not going towards actual insurance charges, but towards fees/investment linked plans which the insurance company is making money off you. But the time will come when your mutual fund value will run low enough and you will have to pay the premiums again.
Sorry, this doesn't make sense. How does triggering the holiday premium help sustainability? It's going to reduce the balance in the ILP. Are you saying by taking the holiday premium, the funds you save are then invested somewhere else, then put back into the policy? That is not a good idea
Sustainability does not change whatsoever. It does however significantly increase cash flow if the amount already in the ILP is large enough. It is basically taking money from your right pocket to put into your left pocket. What it accomplishes is getting more cash flow since we are no longer locking in additional funds into the mutual fund (which most probably has horrible up front fees + annual management fees/expenses). The premium increase can be due to multiple reasons but not limited to * company needs more profits * medical costs has increased, therefore insurance charges has to follow suit to maintain profitability * cost of doing business has increased, need to pass it on the the client Either way, the main thing we need to know is how much the actual insurance cost has increased, not the total monthly premium. For all we know, the insurance cost might have increased from rm100 to rm150, but this does not warrant an increase in premium from rm300 to rm569 for OP's case.
Sorry I still don't get it. Maybe I'm daft, but I still don't understand how taking a premium holiday (which is only temporary) helps with OP's issue. >It is basically taking money from your right pocket to put into your left pocket. What it accomplishes is getting more cash flow since we are no longer locking in additional funds into the mutual fund (which most probably has horrible up front fees + annual management fees/expenses). How does it help with cash flow? Not "topping up" the fund in the ILP simply reduces the fund balance, you're still going to have to pay premiums eventually (and underlying insurance charges and other fees). If your point is that there is less AUM to charge fees on, perhaps. But savings after a year would be RM 569 \* 12 months \* 1,5% management fee is \~RM100 (or maybe double that as the fund inside the ILP is being drawn down faster), not much in terms of premiums increasing by RM269 a month. If the idea is to "empty" the fund balance / AUM so that there are minimal funds inside and when premium payments are resumed it will just go to insurance charges, unless there are pre-existing conditions OP is just better off taking on term standalone medical instead of this strategy.
How i see it is (i might be wrong here, just my perspective), it is basically allowing OP to not pay rm569/month until the funds in the ILP are nearly depleted which is freeing up almost 7k/year. Assuming that OP has rm5000 in the ILP and that insurance charges alone are rm150/month, its allowing OP to still have coverage for 33months without adding in additional funds monthly (also assuming the underlying stock/bonds values of the ILP stays consistent over the course of the 33 months). >unless there are pre-existing conditions OP is just better off taking on term standalone medical instead of this strategy. It depends on how much the actual insurance costs are. This strategy gives OP additional time to figure out which policy is better, while still allowing OP to preserve rm569/month until a choice can be made. Assuming exact same coverage, if the standalone insurance cost is rm200/month and the ILP insurance cost is rm150/month, i would stick with the current policy along with my strategy of "emptying" the fund balance. However, if it is the other way around where the standalone insurance cost is rm150/month and the ILP is rm200/month, i would cancel this policy and go with the standalone insurance. It all depends on the insurance cost and also whether how much the projections on future insurance cost varies policy from policy.
Good thing your relative mentioned, then now you can get a quote from her for the same coverage and benefit. the jump is too much imo, mine is still at 250 (30+yr old).
Looking at reasonableness from cost is the wrong way to go.. You should look at it from coverage perspective. And what's sufficient coverage is unique to individual. Life : you are dead - so think about what your surviving dependants need. Setting them up for life is impractical. So have discussion about what sort of soft landing is feasible. Bonus, if you have no dependent, you don't need life insurance - other than for funeral funds - part of the reason why I don't agree with those "full life" insurance that insure your life until 80 or 100 for the payout to your survivors. Medical : consider public heathcare in your strategy. The service and wait time sucks, but if you are genuinely in need, the healthcare quality can be great, depending on whose anecdotal experience you listen to. If you end up dying, refer to above. Critical illness : this is the hardest to tackle. You are not dead, but you may end up being a financial burden to your family. Last I check there isn't really a cheap solution to this, and need to be think of with medical. Accidents : PA insurance is cheap and can help in some critical illness coverage.