Saturday, June 25, 2011

Back to Basic Series 2 - Medical Life Insurance

Medical Life Insurance (36 Critical Illnesses Policy)

What is Medical Life Insurance?
Medical Life Insurance is a policy that takes care of you when you are being diagnosed with any major critical illnesses and living with a lump sum cash payment payout from your critital illness policy.

Why Should I Buy Medical Life Insurance?
As medical technology improves, so too does our quality of life. While we enjoy longer life spans and a higher possibility of surviving critical illnesses, not all of us are prepared for the financial burden that comes with being diagnosed with one.

Having Medical Life Policy-
·    To ensure that you have enough money to go for medical treatment and able to maintain your lifestyle after you fall ill.
·    To ensure that your immediate family has a lump sum of cash and income after you fall ill or demise, so that they can easily pay bills, taxes and other obligations.
·    For your children to have money for education.
·    To ensure that you have extra income when your earnings are reduced due to critical illnesses or total permanent disability (TPD).
·    Can be another form of saving, if nothing happen to you, you may get back all the premium paid + bonus + interest.

I already have a Medical Card with high annual limit, why should I get a Medical Life Insurance?
A Medical Card is to cover your treatments and medical bills from the hospital, and Medical Life Insurance is a lump sum of payout to enable you to pay your monthly expenses, e.g. car loan, mortgage, education fees and also to maintain your lifestyle.

Example:
I have a client who had a stroke in year 2007. She was only 31 years old at that time. She was sent to the ICU in Gleneagles Hospital Ampang for 6 days, and transferred to a normal ward for another 2 weeks. Her medical bills from the hospital was about RM32,000.00. Luckily she had a Medical Card to settle her hospital bills.

After discharged, the doctor told her, she will not be able to work for the next 12 to 18 months or more, depends on her recovery speed. She was working as a retail promoter, with a monthly income of about RM2000 to RM2300. She had a car loan and a new mortgage to serve at that time, and her MRTA did not cover for critical illnesses. So she still had to serve the mortgage and car loan even though she has no more monthly income. Fortunately she had a Medical Life Insurance policy, which she had bought in year 2005. Her total claim payout was about RM80,000. That lump sum of money managed to settle her basic monthly expenses and seek for some extra treatment, such as acupuncture. The Medical Card continues to settle her post medical fees and payments for other treatments from the hospital.

According to the research of Dr. Mario Barnes from USA, 1 out of 4 will suffer critical illness before age 65, 1 out of 3 will suffer cancer before they die, and the ‘bad news’ is 77% who suffer illnesses will survive, BUT without enough insurance money to maintain their lifestyle or keep up with their necessary medical cost.

According to a market research and survey published by a international reinsurer, nearly 50% of mortgage foreclosure are due to insufficient critical illness insurance;only 3% are due to death (Best’s Review – Life/Health Insurance Edition). Do you rather lose your house to get the mortgage or get your house and lose out your mortgage?

“The probability of incurring a critical illness is more than twice as great as dying from any cause before age 65” ( Employee Benefits New and Views Magazine)

How much Medical Life coverage (Critical Illness coverage) is enough?
We were told that inflation rate is about 4 % to 6%. What about medical inflation?


According to the statistic, the medical inflation rate in Malaysia is estimated to be 10% to 15% every year. Meaning to say, a treatment that costs RM50,000 today would cost RM129,687.12 in a decade. (inflation of 10%)

I am sure everyone of us has a critical illness policy, but is the coverage adequate? Is it a flat coverage plan or ever increasing coverage plan? When was the last time you reviewed your critical illness coverage?

According to the rule of 5 in Registered Financial Consultant (RFC), our critical illness coverage should be at least 5 times your current annual income.
Example:
If your annual income is RM60,000.00, then your critical illness coverage should be RM60,000.00 x 5, and that will be RM300,000.00. But the coverage should be review from time to time according to the lifestyle, job change, life priority, etc. So how much is your current coverage?

Number of claims by age band(2009)
Medical Life Insurance is very expensive…
A Medical Life Insurance policy will definitely cost us money. But paying the 5% premium to protect the 95% of our hard earned money in the bank surely is a wiser decision. A 30 years old man would pay RM3,430 yearly for RM100,000 immediate coverage. Do you know how many years he has to save to create his own RM100,000 in the bank by saving the same amount every year?  The answer is almost 29 years. 

It’s a fact that our medical costs are getting higher and higher every year, should you be diagnosed with any critical illnesses, you will receive a lump sum payment of the basic sum assured. So you can have peace-of-mind doing what’s most important to you; getting back on your feet again. 

The client that I mentioned above, she finished her RM80,000 in about 2 years time. I remember she once told me, ‘I wish I’ve buy more Medical Life Insurance, RM80,000 is too little.’… Honestly, I really have no idea how to reply her statement, I can only smile away… 

She is still unable to work until today, living on the RM1,200 monthly income from SOCSO. Moved back to her hometown to reduce the living cost. And she is only 35 years old………..


We keep worrying the cost of having Medical Life Insurance, but what about the cost of not having one??? Which is more costly??

Don’t hesitate anymore!! Call me for policy review and upgrading NOW…


Why Great Eastern?
Great Eastern Life Assurance (M) BHD is poised for continued growth in its second century of existence. It is off to a good start at achieving its goal to continue its reign as the market leader in the industry. With more than 100 years of experience in solid financial foundation and innovative infrastructure. The Company was certified by the Malaysia Book of Records in 1998 as the "Oldest & Largest Life Insurer" in Malaysia. 
Great Eastern has assets in excess of 44 billion as at 31 December 2009. The head office, 21 operational branch offices nationwide and a network of 17,000 agents serve over 2.84 million policies in force. Great Eastern continue to remain true to our stand that health, wealth and meaningful relationship make life great. Great Eastern has earned our customers’ loyalty throughout the years and believe that this trust is cultivated from our excellent service.

Good Seeds Produce Good Tress
Good Company Always Provide Good Benefits

Sources:
www.insuranceinfo.com.my
www.bnm.gov.my/index.php?ch=12&pg=682&ac=84&yr=2010
http://www.creativeinsurancestrategies.com

1 comment:

  1. You may know that you need Life insurance over 50 , but they put it out because you think it is too complicated or too long. Let us help you make the right purchasing decision.

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