Medical Insurance in Malaysia: What You Need to Know

Medical insurance is a funny thing. You pay every month, and for the most part, you hope you never have to use it. But the truth is, medical insurance is a crucial safety net to have in place.

What is medical insurance?

Medical insurance is a type of insurance coverage that pays for health and medical expenses. The medical expenses include some or all of the costs of hospitalisation, surgery, treatment for chronic illnesses, medical tests, and prescription drugs. The covered medical expenses may also include preventive care, such as vaccinations.

Many medical insurance plans are available, each with advantages and disadvantages. Some plans cover only basic medical expenses, while others provide more comprehensive coverage. The type of plan that is right for you will depend on your individual needs and budget. No matter what kind of plan you choose, medical insurance can help to protect you and your family from the high cost of medical care.

Importance of medical insurance

If you’ve ever been to the doctor, you are well acquainted with expensive medical care. Even a simple office visit can cost hundreds of ringgits, and more serious medical procedures can quickly run into the thousands. That’s why it is such a critical type of insurance coverage. Paying for medical insurance helps to protect both your finances and your health from medical inflation.

How it works

Medical insurance works like a contract between you and an insurance company. You agree to pay premiums upfront, and the company agrees to pay for your medical expenses should you need medical treatment.

Additionally, when you purchase medical insurance, you’re essentially sharing your risk with a large group of other people. If something happens to you, the insurance company can spread the cost across the entire pool of policyholders. In other words, medical insurance is a way of pooling resources so that we can all prepare for life’s surprises.

Types of medical insurance in Malaysia

If you’re considering getting it, you might be surprised to learn that 6 different types of medical insurance are available. From basic plans that cover your hospitalisation costs to more comprehensive coverage that includes outpatient benefits. Here’s a summary of each type:

    • Comprehensive medical insurance

Comprehensive medical insurance is a plan that bundles different types of insurance together to ensure that you’re fully protected against any untoward incidents. Whether you’re diagnosed with an illness, or you meet with an accident, comprehensive medical insurance will have you covered. It covers various risks, including hospitalisation, surgery, outpatient treatment, vaccination, cancer treatment, and more.

    • Hospitalisation and surgical insurance

This coverage protects you from the high cost of medical treatment and hospitalisation due to accidents and illnesses. When you’re covered, you can rest assured that your hospital and surgical bills will be taken care of.

    • Critical illness insurance

Critical illness insurance is a product designed to pay out a lump sum benefit if the policyholder is diagnosed with a critical illness. Most critical illness insurance policies cover various diseases, including cancer, heart attack, stroke, and other major health conditions. It can help ease the financial burden of a critical illness diagnosis.

    • Long-term care insurance

Perfect for individuals above 65 or with a condition which requires constant supervision. It is a type of coverage that helps pay for nursing-home care, home-health care, and personal or adult day care.

    • Disability allowance insurance

This type of insurance can be beneficial in covering your living expenses following a disability, as it can help to replace some of the income you would be losing out on. Disability allowance insurance mainly covers unanticipated events, such as a car accident or sudden illness. Disability allowance insurance can benefit those who are self-employed or do not have a lot of savings. It can help to ensure that you can still meet your financial obligations.

    • Hospital allowance insurance

Hospital income insurance can be a lifesaver for those earning daily wages. The way it works is that a specified sum of money is paid per day of hospitalisation for any covered illness, sickness or injury. Thus, if you are someone who earns a daily wage and you are hospitalised, this type of insurance can help to make up for lost wages. But note that this insurance only covers the loss of income due to hospitalisation and will not pay for any medical expenses incurred.

Steps to get it

  1. Decide on which type of medical insurance to purchase:
    1. Comprehensive
    2. Hospitalisation and surgical
    3. Critical illness
    4. Long-term care
    5. Disability allowance
    6. Hospital allowance
  2. Set a budget (ideally 10-15% of your income).
  3. Look at the plans offered by different medical insurance providers.
  4. Check the insurer’s reputation:
    1. Financial strength
    2. Claim process
    3. Ask for reviews from friends and family
    4. Value-added services
  5. Decide on which medical insurance provider to get quotations from.
  6. Compare price and coverage.
  7. Buy your medical insurance and be insured!

Where to get it

You can purchase medical insurance from an insurance company, or an employer can provide it. If you opt for the former, you should know that Malaysia has at least 15 medical insurance providers. It includes:

  • AIA
  • Allianz
  • AXA
  • Etiqa
  • Great Eastern
  • Manulife
  • MCIS
  • MSIG
  • Prudential
  • Tokio Marine

Cost of medical insurance in Malaysia

Anyone who has ever been medical insurance shopping knows that it is no walk in the park. There are so many different plans and options available at different prices. However, one general rule of thumb is always worth bearing: keeping your monthly premium at 10-15% of your income is highly advisable.

When shopping for medical insurance, you may wonder what factors affect premiums. In short, there are several things that insurers take into account when setting rates. Here are a few of the most critical factors:

  • Type of plan
  • Age
  • Gender
  • Geographical location
  • Medical history
  • Occupation
  • Body Mass Index (BMI)
  • Smoking habits
  • Co-insurance feature
  • Amount of deductible
  • Medical inflation
  • Network of insurance provider

Insurance companies use this information to calculate your risk of making a claim, which can significantly impact your premium rate.

Ways to save on premium

In these tough economic times, we’re all looking for ways to save a few ringgits. Take a close look at your medical insurance premium; chances are, you’re paying too much. Here’s how to fix that.

    • Stay healthy

That may seem like an obvious statement, but it’s true. If you’re in good health and a non-smoker, you may be eligible for discounts on your premium. The logic is that the healthier you are, the less likely you need medical care, which translates into lower rates.

    • Shop around

Don’t just accept the first premium quote you receive, as there’s a lot of competition in the medical insurance market. Get quotes from several different insurers and compare their rates. Understand the coverage offered to ensure you’re getting the best deal.

    • Consider a high-deductible plan

These plans have lower premiums, but you’ll need to make sure you can afford to pay the deductible if you need to make a claim. Suppose you’re healthy and don’t anticipate needing much medical care. In that case, a high-deductible plan could save you a lot of money.

    • Take advantage of discounts

Many companies offer discounts when you enrol in an automatic payment plan or complete a health screening.

    • Reassess your needs regularly

As your life changes, so too will your insurance needs. These steps ensure you get the best value for your medical insurance.

Additionally, it is vital to be aware that the premium of some insurance plans increases as well as your age, while others remain the same throughout the policy’s life. It is something to keep in mind when choosing a plan, as it could cost you more in the long run.


In short, don’t view medical insurance as unnecessary – it is crucial. It can be the only thing standing between you and a massive hospital bill. There are a few different types of medical insurance plans available on the market, so choose one that best suits your needs and budget.

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