Choosing the right type of insurance can be overwhelming, especially with so many options available. To help clear up the confusion, we spoke to Adeline, an experienced insurance expert who specializes in medical insurance (Adeline’s directory page on iBanding). With her deep knowledge, Adeline explains the key differences between standalone medical insurance and life insurance with riders, who benefits most from each, and what to look for when selecting a plan. In this interview, she offers practical insights to help you make the best decision for your health and financial needs.
What is the difference between standalone medical insurance and life insurance with medical riders?
Adeline: Standalone medical insurance is designed specifically to cover healthcare costs, like hospital stays are medically necessary for surgeries and treatments. It focuses only on medical needs. However, some life insurance plans allow you to add medical coverage as a rider, which is like an extra feature on top of the main life insurance. Some insurers may give discounts on the cost of these riders, particularly if they are bundled with investment-linked policies (ILP), for a certain period of time. But standalone medical insurance is just for your medical expenses, while life insurance with riders includes other financial products like death benefits and investments.
What are Riders and Investment-linked policies (ILP)?
Riders are optional add-ons to your main policy that provide additional coverage for specific needs, like health insurance.
Investment-linked policies (ILP) are life insurance plans where part of your premium is invested in funds, and they include life insurance and investment benefits.
Who would benefit most from choosing standalone medical insurance?
Adeline: Standalone medical insurance is beneficial to anyone who is still healthy because it’s impossible to predict when or what kind of illness might occur. Medical expenses can come up unexpectedly, and this coverage ensures you are protected. Of course, each policy has waiting periods and exclusion clauses, which means some things aren’t covered right away or at all, but having medical insurance is an essential safety net for everyone. It’s better to be prepared, regardless of your age.
What are Waiting periods and Exclusion clauses?
Waiting periods refer to the time you must wait after buying the policy before certain benefits become available.
Exclusion clauses are conditions or treatments that your insurance policy won’t cover.
How do costs/prices compare between standalone medical insurance and life insurance with riders?
Adeline: Standalone medical insurance is often more affordable because it focuses solely on your medical needs and doesn’t include an investment element or death benefits, which can drive up the cost. The price difference between standalone medical insurance and combined life and medical plans can become significant for this reason. While some life insurance plans offer temporary discounts when adding medical riders, these discounts are usually short-term and vary by insurer.
What is the best standalone medical insurance in Malaysia?
Adeline: There isn’t a single “best” plan because everyone has different needs. The right plan for you depends on your health needs, financial situation, and how long you plan to keep the insurance. A good plan should be affordable enough for you to keep renewing over time and provide the coverage that matches your specific needs. Be cautious of policies that have “no claims years” clauses, which means unless you don’t make a claim for several years after your case is accepted, else it could affect whether your policy is offered for renewal. If your insurer refuses to renew, it may be difficult to get coverage elsewhere, as new insurers might impose exclusions, charge higher premiums, or postpone or deny your application altogether.
What is the “No claims years” clause?
The “No claims years” clause is a provision in some insurance policies that rewards policyholders for not filing any claims during a specific period of time. If you go without making a claim for one or more years, you may become eligible for certain benefits
Are there specific wellness benefits or additional features that come with standalone medical insurance?
Adeline: Yes, some insurers offer wellness benefits to make their plans more attractive. These benefits can include rewards like vouchers or points for using fitness apps, or free health screenings such as blood tests. After the COVID-19 pandemic, some insurers in Malaysia have also started offering coverage for psychological issues, such as anxiety or depression, as part of their standalone medical insurance plans. These extras add value and help promote overall health and wellness.
Key Takeaways
- Standalone Medical Insurance focuses purely on covering healthcare costs, such as hospital stays and treatments, while life insurance with riders bundles medical coverage with other financial products like death benefits.
- Anyone can benefit from standalone medical insurance since illness or injury can occur unexpectedly. It’s essential to have dedicated health coverage.
- Cost differences between standalone medical insurance and life insurance with riders are usually significant. Standalone plans are cheaper, because they only cover medical expenses, while life insurance with riders costs more due to the added life coverage.
- Choosing the right plan depends on individual needs, affordability, and long-term coverage, with attention to renewal terms and potential exclusions.
- Many standalone medical insurance plans now offer wellness benefits, such as fitness rewards and mental health coverage.
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