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Types of Insurance in Malaysia You Should Know

Key Points

  1. Life insurance can protect you and your loved ones in the future.
  2. You never know when you’ll get sick. Your financial burden will be reduced if you have health insurance.
  3. Concerned about your home catching fire? Don’t worry, you’re covered by property insurance.
  4. Have peace of mind and enjoy your vacation knowing that you are covered by travel insurance.
  5. Auto insurance is required for all Malaysian drivers. Don’t drive your car unless you have it!

The typical insurance you hear about in Malaysia is life and car insurance, isn’t it? Well, to be honest, so do we. But did you know we have more insurance in Malaysia besides these two that are essential for us to learn and have for ourselves and our family?

As we know, insurance is crucial in our lives as the purpose of insurance is to protect us from any unwanted circumstances that we can’t predict. Selecting the right insurance and amount of insurance must always be based on your specific situation. But don’t worry, in this article, we will clarify the other types of insurance you can know and probably consider having in the future.

1. Life insurance

What exactly is life insurance? Are life and health insurance the same? e know this question is wandering across your mind. But don’t worry, we will explain it to you right away. Life insurance can be considered a contract between you and an insurance company to protect you from uncertainty. Not just that, you will pay the agreed premium regularly. If anything happens to you, such as sudden death, total permanent disability, critical illness, or terminal illness, your insurance company will provide you and your beneficiaries with a payout (called a benefit).

Life insurance is quite crucial because if something terrible happens to you in the future and you are the provider for your family, this life insurance can certainly help you to cover the cost and become your financial backer since you are no longer able to contribute.

There are two types of life insurance: Term life and whole life insurance.

Term life insurance Whole life insurance
Covers you for specific years, usually between 10, 15, or 20 years Covers your entire lifetime
Lower or the cheapest premium over the agreed period Higher premium over the agreed period
There is no cash value to what you will receive The cash value increases throughout the policy
The policy will expire after the plan is over The policy will not expire as long as you make a premium payment

2. Health insurance

As mentioned above, life and health insurance are totally different things. Health insurance can help in the case of an emergency, as it has coverage that pays for health and medical expenses.

If you have health insurance such as a medical card or critical illness coverage, if you are admitted to the hospital, the medical card that you have will be able to cover the cost of your treatment, or in other words, can insure you. Because we know that the cost of one treatment at a private hospital can be really costly. Thus, you should have health insurance like a medical card or critical illness coverage. Paying a lump sum from your end can lessen your financial burden.

3. Property insurance

Most of us, including myself, might not prioritize property insurance, and we do believe there are most of us who do not have this property insurance. A survey conducted by Zurich Malaysia stated that “50% of homes are not covered by insurance or takaful, 33% are not covered for home content loss, and 25% do not know what their existing home insurance or takaful cover”. Thus, in Malaysia, there are three types of property insurance: householder, homeowner, and fire.

  1. Householder policy
  2. Covers your house contents (inside the house) like household furniture and appliances, personal effects, and other moveable possessions.

  3. Homeowner policy
  4. Protects your house structure, including the walls, roof, fixtures and fittings, garages, gates, and fences.

  5. Fire policy
  6. Covers loss or damage to your residential property (excluding the contents) caused by fire or lightning.

Hence, you need to take property or home insurance because you wouldn’t know what will happen in the future. Let’s say your house is damaged due to unexpected events. At least you have the coverage for your property.

4. Travel insurance

Now the border is finally open, and we can all go to our favourite country and travel! But wait a minute, did you get travel insurance before departure? Well, if you haven’t, please do so. Travel insurance aims to protect you and your loved one against risks and financial losses that could happen while travelling.

Travel insurance covers you against many possibilities, from compensation for travel cancellation or interruption, baggage, overseas medical expenses, coverage for flight delays, and many more. As for us, we might think travel insurance is not necessary, but what if something unexpected happens when you are at the airport or at your arrival destination?

Several insurance companies in Malaysia offer travel insurance:

  • Allianz Travel Easy
  • Etiqa TripCare 360
  • AXA Affin Smart Traveler
  • Tune Protect Travel Easy
  • Zurich Z Travel

Click here to learn more about travel insurance providers in Malaysia.

5. Car insurance

This is the common or basic insurance most of us will have, especially if we own a vehicle or motorbike. Auto insurance, or what we usually call car insurance, is compulsory for all drivers in Malaysia. If caught driving without car insurance and valid road tax, you will get FINED!

As for auto insurance, we can split it into three (3) types: third-party, third-party, fire, and theft, and comprehensive insurance. Each of these insurance policies has different characteristics and benefits.

  1. Third-party
  2. Third-party insurance is a type of insurance that only covers a third party’s damage, injuries, or death and does not cover your vehicle. This insurance coverage is the bare minimum that all Malaysian drivers must have.

  3. Third-party, fire, and theft
  4. Third-party, fire, and theft insurance, on the other hand, is similar to third-party insurance. It protects you if you are responsible for the injury or death of a third party and any damage to their property. It will not, once again, cover your vehicle.

  5. Comprehensive
  6. Comprehensive insurance is the most comprehensive protection. It will not only cover injury and death to others, property loss, or damage to others, but it will also cover your vehicle. You can also purchase car insurance add-ons based on your needs, such as windscreen coverage, special peril inclusions, compensation for assessed repair time (CART), Legal Liability to Passenger, e-hailing, and more.

Verdict

You’re already aware of the different insurance in Malaysia that will be advantageous to you and your loved ones, aren’t you? Because we never know what will happen to ourselves or our families, getting one of these insurance policies is crucial. But don’t worry; several insurance providers will tailor your policy to your needs. By comparing several coverage options, you can choose the best insurance plan for you.

Related: Car Insurance 101: Things You Need to Know | Travel Insurance 101: Things You Need to Know | What is Home Insurance? Should I Get It?

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